NIKE EARNINGS JUMP 22.2% IN FIRST QUARTER; DOMESTIC ATHLETIC APPAREL REVENUES FALL 11% AS FOOTWEAR REVENUES RISE 3%.

BEAVERTON, Ore. -- Although apparel volume lagged, better overall margins in Asia and Europe helped lift Nike Inc.'s first quarter earnings 22.2 percent to $200.2 million, or 70 cents a diluted share, from $163.8 million, or 56 cents a year earlier.

Sales were essentially flat at $2.5 billion. Global footwear revenues climbed 4 percent while global apparel sales fell 6 percent, Nike said.

Gross margins in the quarter improved to 38.6 percent of sales from 37.6 percent a year earlier. Nike saw sharply improved gross margins in Europe and Asia, Philip H. Knight, chairman and chief executive, said in a statement.

Selling, general and administrative expenses were cut to 25 percent of revenues from 26.1 percent as costs were trimmed through the organization, Knight said.

In the U.S., total Nike brand revenues slipped 2 percent to $1.3 billion. Athletic apparel revenues fell 11 percent to $332 million and athletic footwear revenues climbed 3 percent to $941 million.

"Our brand strength in the U.S. has been gaining momentum through the back-to-school period, particularly in our higher-end footwear," Knight said. "U.S. apparel is by no means `fixed' but we did see some signs that the revenue decrease is mitigating."

European revenues climbed 5 percent to $717.8 million, helped by a 9 percent sales jump in Italy. Improved gross margins drove European profits higher, even though the strong dollar negatively affected revenues, Knight said. The Nike brand in the U.K. is also benefitting from the company's new Nike Town store in London's Oxford Circus, Knight said.

In the Asia Pacific, revenue were flat at $191 million. On a constant dollar basis, revenues fell 8 percent overall, and 16 percent in Japan, Nike said.

"Our business in Asia Pacific continues to normalize as fewer close-outs and growing momentum for our footwear in Japan drive profitability," Knight said.

In the Americas region revenues fell 6 percent to $143.6 million. On a constant dollar basis revenues fell three percent, Nike said.

During the quarter Nike spent $141.8 million to buy back 2.7 million shares of its common stock. Since Feb. 1998, the company has bought back 11.4 million shares from $497.4 million.

Inventories at the end of the period were up six percent from the year-ago level at $1.2 billion.

Looking forward, orders for athletic footwear and apparel scheduled for delivery between Sept. 1999 and January 2000 are up 2 percent compared to the same period last year at $3.2 billion, Nike said. Strength appears to be centered in Asia, where orders are up 37 percent, and Europe, where orders are up 15 percent.

U.S. orders are down 7 percent and Americas orders are down 5 percent, Nike said.

Separately, Nike promoted eight mangers to the vice president level, affecting in its domestic, Internet, and overseas operations. The new vice presidents are Rick Anguilla, investor relations; Mary Kate Buckley, nike.com; Oscar Cardona, human resources, U.S. region; Trevor Edwards, European marketing; Joaquin Hidalgo, soccer; Eunan McLaughlin, European sales; Peter Ruppe, global footwear categories; Jim Tucker, Nike U.K.