MARCH 19, 2004 -- Nike's Q3 revenues increased 21% to $2.9 billion versus $2.4 billion for the same period last year. Q3 net income totaled $200.3 million, or $0.74 per diluted share, compared to $124.7 million, or $0.47 per diluted share, in the prior year.
Philip Knight, COB/CEO, said, "It was another great quarter for Nike. Top and bottom line results were again driven by healthy consumer demand for innovative products and the strength of Nike's diverse portfolio of businesses. For the first nine months of the year, Nike's revenue has grown 14% and EPS are up 29%. As we look ahead, we are optimistic about the significant long-term growth opportunities for our company."
Nike reported worldwide futures orders for athletic footwear and apparel scheduled for delivery from March 2004 through July 2004, of $4.7 billion, 9.9% higher than such orders reported for the same period last year. Approximately four points of this growth were due to changes in currency exchange rates.
By region, futures orders for the USA were up 4.5%; Europe grew by 11%; Asia Pacific increased 23%; and the Americas increased 11%. In Europe, eight points of the increase were due to changes in currency exchange rates. Currency exchange rate movements contributed approximately five points and two points, respectively, to futures growth in the Asia Pacific and Americas regions.
Knight continued, "Growing consumer demand for Nike footwear and apparel in our international markets helped drive the 9.9% increase in worldwide futures. Additionally, we are pleased by the continued strength of our US business, which recorded its strongest futures orders growth in eight quarters."
During the third quarter, US revenues increased 4% to $1.17 billion versus $1.13 billion for Q3 2003. US athletic footwear revenues increased 1% to $772.8 million. Apparel revenues increased 7% to $329.3 million. Equipment revenues increased 13% to $67.4 million.
Revenues for the European region (which includes the Middle East and Africa) grew 36% to $880.0 million, up from $645.8 million for the same period last year. Twenty-one points of this growth were the result of changes in currency exchange rates. Footwear revenues increased 48% to $537.7 million, apparel revenues increased 19% to $284.1 million and equipment revenues increased 34% to $58.2 million.
Revenues in the Asia Pacific region grew 21% to $402.4 million compared to $331.6 million a year ago. Ten points of this growth were the result of changes in currency exchange rates. Footwear revenues were up 15% to $214.2 million; apparel revenues increased 30% to $150.1 million and equipment grew 26% to $38.1 million.
Revenues in the Americas region increased 26% to $135.0 million, an improvement from $107.4 million in Q3 2003. This growth rate reflected an 11 point increase due to changes in currency exchange rates. Footwear revenues were up 29% to $89.2 million, apparel revenues increased 21% to $36.0 million and equipment improved 15% to $9.8 million.
Other revenues, which include Nike Golf, Converse, Inc., Bauer Nike Hockey Inc., Cole Haan, and Hurley International LLC, grew 68% to $317.1 million from $188.2 million last year. The acquisition of Converse accounted for 39 percentage points of this increase.
Gross margins were 42.1% compared to 40.7% last year. Selling and administrative expenses were 30.7% of third quarter revenues, compared to 31.6% last year. The effective tax rate was 34.8%.
At quarter end, global inventories stood at $1.7 billion, a 10% increase from February 28, 2003. Cash and short-term investments were $914.7 million at the end of the quarter, compared to $443.2 million last year.
During the quarter, Nike purchased a total of 754,900 shares for approximately $53.6 million in conjunction with the second four-year, $1 billion share repurchase program that was approved by the board of directors in June 2000.