Strong demand in North America helped Nike post second-quarter net income that beat expectations, despite weaker sales in China and costs related to the sale of two brands.

The world's largest athletic gear maker yesterday reported its net income fell 18 per cent during the three months ended November 30, but revenue rose 7 per cent, fuelled by the popularity of its Nike brand.

Results reassured investors about the company's strength and shares rose 5 per cent in after-market trading.

Like most global companies Nike has been dealing with Europe's weak economy and a slowdown in growth in China. Nike said it is working to reduce its inventory in China and reworking its offerings there to adapt to the changing tastes of Chinese consumers.


"We know what needs to be done in China and we know we can do it because we've done it before," said chief executive Mark Parker.

Orders for Nike shoes and apparel to be delivered between December and April rose 6 per cent from the same period a year ago, to US$9.3 billion ($11.2 billion). That's down from a 13 per cent increase last year.

Meanwhile, a 14 per cent rise in inventory in North America was offset by a 6 per cent decline in greater China.

During the latest quarter, Nike completed the sale of its Umbro and Cole Haan brands to focus on its more profitable lines.

Net income for the three months ended November 30 fell to US$384 million, or US$1.14 per share. That compares with US$469 million, or US$1.03 per share, last year when it had about 3 per cent more shares outstanding. Analysts expected US$1 per share according to FactSet.

Revenue rose 7 per cent to US$5.96 billion from US$5.55 billion last year, slightly short of the US$6.01 billion analysts expected.

Sales in China were down 11 per cent and down 2 per cent in Western Europe. But they rose 17 per cent in North America, Nike's largest market. Emerging markets were also a strong point, with revenue up 11 per cent.

- AP