Nike Profit Jumps on Strong U.S. Demand

SAN FRANCISCO – Nike Inc. (NKE), the world's largest athletic shoe company, Monday reported a 25 percent rise in quarterly profit, beating analysts' estimates, on strong demand for high-end running and basketball shoes in the United States.

The Beaverton, Ore.-based company said orders for future delivery were strong, especially in the United States, its biggest market.

Fiscal first-quarter net income increased to $326.8 million, or $1.21 per share, from $261.2 million, or 98 cents per share, a year earlier.

Analysts on average were expecting $1.11 per share on revenue of $3.46 billion, according to Reuters Estimates.

Revenue rose 18 percent to $3.56 billion from $3.02 billion a year earlier, driven by double-digit gains in the United States, Europe and the Asia-Pacific region.

In the United States, revenue rose to $1.4 billion from $1.2 billion a year earlier on a 13 percent gain in footwear sales.

John Shanley, an analyst at Susquehanna Financial Group, said high-end Nike shoe sales in the United States and growing demand for these products in Europe helped the company top Wall Street forecasts. He predicted Nike would turn in another strong performance in its fiscal second quarter.

"The real driver in my estimation was the strong demand for the product in the athletic specialty stores," said Shanley, who owns no Nike shares. "They really had a huge home run with the Nike product with the just concluded back-to-school period."

Nike said worldwide orders for athletic footwear and apparel for delivery between September 2004 and January 2005, a key forward-looking indicator, increased nearly 10 percent from a year earlier, to $4.3 billion. Growth in the United States hit its highest level in more than seven years.

The company said revenue from its brands besides Nike, including Converse (search), Nike Golf (search), Bauer Nike Hockey (search) and Cole Haan (search), increased 64 percent to $434.5 million in the first quarter.