Nike has announced its financial results first fiscal of 2013 ended August 31, 2012. Strong demand for Nike brands propelled first quarter revenues by 10 percent to 6.7 billion dollars, up 15 percent on a currency-neutral basis. Excluding the impacts of changes in foreign currency, Nike brand revenues rose 16 percent, with growth in all key categories and each region except Japan. Revenues on a currency-neutral basis for other businesses increased 9 percent, while businesses to be divested grew by 6 percent.
Commenting on the results Mark Parker, President and CEO, Nike said, “We had a strong first quarter and a great start to the fiscal year. Nike delivered an amazing array of innovation across some of the biggest moments in sport. We’ll continue to make strategic investments across our portfolio of businesses to capture our full potential over the long term and drive shareholder value.”
While revenues increased, gross margin declined 80 basis points to 43.5 percent. Gross margin continued to benefit from pricing actions and product cost reduction initiatives, however, this was more than offset by higher input costs, primarily materials and labor. In addition, gross margin was negatively impacted by a shift in the Company’s mix to lower margin businesses within the Nike Brand and the conversion of the China market to direct distribution for Converse.
Net income decreased 12 percent to 567 million dollars while diluted earnings per share decreased 10 percent to 1.23 dollars, reflecting a 3 percent decline in the weighted average diluted common shares outstanding. The company announced its intention to divest of the Cole Haan and Umbro businesses. During the first quarter, Nike, repurchased a total of 8.2 million shares for approximately 779 million dollars as part of its four-year, 5 billion dollars share repurchase program, approved by the Board of Directors in September 2008.