Nike Nike Intends To Raise Prices Of Sportswear And Shoes Substantially

Due to rising cost pressures to damage profitability, Nike intends to substantially raise product prices in 2012, and expects profit margins to continue in 2011. It is not yet possible to determine the impact of Japan's disaster on its business.

Comprehensive media reported in March 18th that Nike (NikeInc) plans to substantially increase its sports shoes and sportswear prices in 2012 to cope with rising oil, cotton and pport costs, which are hurting the company's profitability.

The share price of the world's biggest sports shoe and garment maker plummeted by 7%, as investors feared that the company's already tight profit margins would be under greater pressure in 2011 and 2012.

Nike reported on 17 that quarterly profits were lower than expected due to rising production costs.

The company expects profit margins to continue in 2011 and intensify in the current quarter.

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In response to this, Nike officials said the company will increase and expand its price rises.

Nike's gross profit rate has been further damaged, attributable to the need to meet consumer demand, the company more than the use of air to pport goods.

The gross profit margin of the company in the third quarter fell by 1.1 percentage points to 45.8%.

The company says there is a shortage of products, and suppliers always improve their sales capabilities.

Nike expects its gross profit margin to be 3 percentage points lower in the quarter of March than the same period last year. However, with the start of the price increase measures, the profit margin pressure will ease in late 2011.

Blair, chief financial officer of Nike, said at a conference call that "from the spring of 2012, we will make more substantial price increases on a wider range of products."