An employee at the Nike R&D facility in Fort Worth, Texas, checks a golf club's responsiveness. Bloomberg News
Shoe and apparel company Nike Inc said on Wednesday that, despite weak domestic sales, its profit grew 9 percent in the second quarter on strong sales overseas.
The Beaverton, Oregon-based company reported its net income rose to $391 million, or 80 cents per share, compared with net income of $359.4 million, or 71 cents per share, in the same quarter last year.
The company said its total revenue grew 6 percent to $4.6 billion, from $4.3 billion last year. Changes in currency exchange rates boosted revenue by 1 percentage point for the quarter.
The results slightly exceeded Wall Street's expectations. Analysts polled by Thomson Reuters expected the company to earn 79 cents per share on sales of $4.73 billion.
Nike President and CEO Mark Parker said the results demonstrate the strength of the brand. He said the current state of the industry and the world offer opportunities for Nike to become a stronger leader.
"In challenging times like these, it's especially important to stay focused on what we do best - delivering the most innovative and relevant product, strengthening our relationship with consumers and driving excellence into every area of our business," Parker said in a statement. "That's how we continue to lead the industry, take market share from competitors and grow our business."
The company saw strong sales growth in Asia and other foreign markets. Revenue in Asia jumped 22 percent for the quarter. But domestic sales were weak. Total revenue in the US decreased 1 percent, with significant drops in equipment sales.
Nike said sales at six of its top 10 accounts in the US were essentially flat. And comparable-store sales for Nike-owned stores dropped nearly 20 percent, because the company had little promotional activity compared to the rest of the marketplace and many of its stores are in tourist areas, which are among those hit hardest by the economic downturn. Comparable-store sales are considered a key indicator of a retailer's health.
Footwear and athletic goods analyst John Shanley at Susquehanna Financial Group said Nike is feeling pressure from the recession. But he is pleased with the company's ability to perform in tough times and said Nike's leadership is focused on how to cope with the uncertainty of the future.
"They are cautiously optimistic and rightly so," Shanley said.
Nike's orders for product to be delivered between December and April dropped 1 percent below the same period last year.
