Nike'S Greater China Profit Growth Slowed Down By &Nbsp; Sports Goods Industry Collectively Spent The Winter.

In the first quarter of fiscal year 2012, the income of footwear and sports equipment in Nike Greater China achieved a two digit growth, of which footwear income was $314 million, an increase of 28% compared with the same period last year, while sports equipment revenue increased by 37 million US dollars, an increase of 16% over the same period last year. However, clothing revenue decreased by 3% compared to the same period last year, only 177 million dollars, compared with 182 million dollars in the same period last fiscal year.

Nike's total revenue amounted to $528 million, an increase of 15% over the previous year, and the pre tax profit of $171 million, up only 4% from the same period last year. In the past four quarters, the growth of pre tax profits in Nike Greater China was 10%, 39%, 21%, 21%, respectively, and the growth rate of pre tax profit in the first quarter of Nike's 2012 fiscal year hit a new low.

Ma Gang, a market watchdog, told the first Financial Daily reporters that the income of Nike Greater China is still showing growth trend, that is, the number of new stores in Nike has increased a lot.

A large number of new stores can bring in the growth of business revenue, but the rising wage and rents in the country have increased the cost of Nike's sales, resulting in a slowdown in its pre tax profit growth.

Nike's gross profit margin in the first quarter of fiscal year 2012 was 44.3%, compared to 47% in the first quarter of last year, and 2.7 percentage points reduced. Nike explained that the overall gross margin decreased due to the increase in product costs and the increase in the proportion of discounted products in total revenue.

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Ma Gang pointed out that the Chinese market, for example, Nike recently raised the price of its products, about 8% of the increase, this increase is not large compared with domestic brands, but this will affect the enthusiasm of consumers to buy Nike products, and increase the number of stocks.

In addition, China's sporting goods industry has reached the critical level of adjustment over the past 10 years, with an average annual growth rate of about 30% per year.

Ma Gang said that the existence of a large number of stores, while increasing the brand revenue, will also increase a large number of stocks. Now Nike has seen a substantial increase in stock. If Nike is to clear up its stock in the form of a discount, it will inevitably encroach on the market of other brands. Other brands will have to follow the discount, and the whole market will have a chain reaction. Next year, the sporting goods market will have a bright future.