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Nike Reports 12% Increase in Q1 Net Income (NKE)

Oregon-based, largest Sporting goods company providing athletic footwear, apparel, equipment, and accessory products for men, women, and children, Nike Inc. (NYSE: NKE) reported results for the first quarter of 2013 ended Aug 31, 2012.

Revenues increased by 10% to $6669 million. Operating Income fell 14% to $750 million. Net income for the quarter fell 12% to $567 million.

NKE’s revenues increased in all geographic regions except Japan, where it fell 7%.

Gross margins fell from 44.3% to 43.5%. The company claimed the decline was mainly due to the increase in input costs, predominantly materials and labor. Lately, NKE shifted its businesses to lower margin products within NIKE Brand and Converse’s direct distribution of products in China market.

Operating expenses increased more than revenues. The company quoted that 29% increase in demand creation expenses was to support Olympics and European Football Championships and also to market new product initiatives.

As on Aug 31, 2012, NKE had total assets of $15,114 million including cash and its equivalents worth $3267 million. Total liabilities were $5067 million, of which 75% were current and the remaining was long term. Total Stockholders’ equity was $10047 million.

As of the end of the first quarter, the Company repurchased a total of 58.5 million shares for approximately $4.9 billion under its $5 billion share repurchase program approved by its Board of Directors.

NKE has an average of 452.8 million common shares for basic EPS calculation and 461.4 million common shares for diluted EPS calculation by adding stock options and restricted stock which makes Earning per share (basic) as $1.25 compared to $1.39 in August 2011 and Diluted EPS as $1.23 compared to $1.36 in 2011.

Nike’s shares have been quite volatile today. The stock has traded in the range of $92.79 and $95.37. At the last check, NKE was trading 0.76% lower at $95.2746, with volume up from its daily average of 2.82 million to 3.55 million.



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