Nike Inc, the largest sporting goods business in the world, posted fiscal second quarter profit topping estimates of analysts as sales were boosted by higher priced footwear.
Net income for the three months ending on November 30 increased 40% to reach $537 million equivalent to 59 cents per share, from the $384 million or its equivalent of 42 cents per share for the same period one year ago. The company, based in Beaverton, Oregon released its figures for the quarter on Thursday. Profit excluding certain items was 59 cents per share, which beat the analyst’s estimate of 58 cents.
Mark Parker the CEO of Nike has introduced a number of premium products with price tags that are much higher than normal including Flyknit running wear for $160 per pair and Hypervenon soccer cleats that cost over $225 per pair. Nike has also increased its online business. The gross margin, which is the percentage of overall sales that remain after subtracting all cost of goods sold, grew by 1.4% to reach 43.9% at the end of November.
One analyst in Chicago said the Flyknit technology is very good and will be the next wave of new innovation, but remains in its infancy at the moment. He said Nike was the leader in that field and had the needed technology.
Nike was up by less than 1% in late Thursday trading after hours to $78.82. Shares of the sporting goods business have increased by 52% in 2013, compared to the average for the S&P 500 index of 27% for the year.
Sales at Nike were up overall by 8% to end the quarter at $6.43 billion. The projected sales by analysts had been $6.44 billion.
Orders for Nike brand products between December and April were higher by 13%, excluding the effects due to exchange rate fluctuations on foreign currency.
With the Olympics set for February and the World Cup for June in Brazil, future orders are being helped greatly which also helps the gross margin.