After the sound of the closing bell on September 29, the world’s leading athletic shoe and apparel company, Nike Inc. (NKE) announced results from the company’s 1Q. Profits advanced marginally year-over-year, despite the sudden decrease in overall revenues. Quarterly sales were greatly affected by consumers, both domestically and globally, curtailing their spending habits amidst the current recession.

For the recent period, Nike posted a net profit of $513M, or $1.04 per share, slightly higher than the previous year’s earnings of $510.5M, or $1.03 per share, an increase in profits of 0.5%.

Revenues were a disappointment for the company during the quarter, falling from $5.43B a year ago to $4.8B, a drop in sales of nearly 12% year-over-year. Nike attributed much of the decrease in sales to the lack of spending within the European and Chinese markets, although the domestic markets did not fare much better.

On average, analysts within the industry were looking for Nike to record a quarterly profit of $0.97 per share on total revenues for the period of $4.9B.

Charlie Denson, Nike’s President commented on the company’s earnings report, “People are still going to be relatively cautious going through that holiday period. Nike saw sequential improvement in retail orders through spring.”

Looking further inside the report, revenues within the North American markets slipped from $1.9B to $1.8B, a decrease in sales of more than 5%. Footwear sales within the segment retreated more than 4% to $1.2B, while apparel sales dropped 9% to $379.8M. Additionally, revenues generated from equipment sales fell to $98M, a 5% decline.

Operating earnings before interest and taxes came in at $411M, an 11% increase year-over-year.

Sales generated within the Western European markets took the biggest hit, as revenues plunged from $1.3B to $1.1B, a drop of more than 15%. Results were greatly altered by the current exchange rate, and if the changes in rates were excluded, revenues would have only decreased by 8%.

Operating earnings before interest and taxes from the Western European markets totaled $289M, a drop in earnings of 11% year-over-year.

In the Central and Eastern parts of the European markets, Nike saw a dip in sales of more than 33%, to $286M. Taking away the negative impact of the exchange rate, revenues were down 23%, while earnings before taxes and interest came in at $82M, down nearly 35% from last year’s results.

In China, Nike did not see the same results as they did in the prior year’s 1Q, as sales slipped from $496M to $416M, a decrease in revenues of more than 16%. Once again, Nike was affected by the exchange rate, this time in a positive manner. If the rate change were excluded, Nike would have posted a slightly larger decrease in sales in China of 17%.

Overall, footwear sales slipped 10% to $2.6B, while apparel revenues dipped 16% to $1.3B during the 1Q.

Company officials recently stated that the current volatility of currency had the potential to weigh heavily on results in recent quarters, which could affect 2010 results.

Don Blair, Nike’s CFO affirmed, “We certainly are seeing a more benign environment on currency than we had potentially expected earlier. The dollar has weakened a bit.” Blair went on to add that currency trends are “looking up.”

Although the company does not formally issue earnings and revenues guidance projections, Nike does expect to post lower overall revenues in 2010 than in 2009.

Nike shares, which have traded as high as $67.44 per share and as low as $38.24 per share in the last 52 weeks, closed the September 30 session up more than 7.5%, adding $4.61 to conclude at $64.70 per share.