Sources: VF Selling Sports Group To Fanatics Angels P Talks Committing Future Earnings To Fantex MJ's Son Partners With Tech Startup WaitTime LeBron Not Worried About Nike Q3 Results Nike Posts Solid Q3 Amid Adidas Resurgence GoPro To Cut 270 Full-Time Jobs Nike Remains Top Provider For Tourney Teams Michigan Gets Regular Jordan Jerseys Back UNC Football's Move To Jordan Could Pay Off Dodgers Owner Leads $100M DraftKings Investment
NIKE SAYS ITS THIRD QUARTER EARNINGS WON'T MEET ESTIMATES
Published February 25, 1998
Nike announced that it expects its third quarter earnings ending February 28 to be between $.24 to $.28 per share, below the First Call estimate of $.38 per share. Nike added that its earnings for the full year will be below the previously stated range of $2.00 to $2.15 per share. Nike said it is experiencing higher than anticipated order cancellation rates in the Asia Pacific region, while higher levels of close-out sales in the U.S. continue to negatively impact gross margins. Nike added that it is examining its overall cost structure and plans to take actions, including realignments and reductions in its global workforce (Nike). DETAILS: Nike's estimates led CNBC's "Business Center" and "The Edge." CNBC's Sue Herrera reported that Morgan Stanley Dean Witter analysts estimate Nike "might have to cut up to 2,000 jobs" ("The Edge," CNBC, 2/24). CNBC's Garrett Glaser: "Nike laid most of the blame for its earnings problems overseas in Asia. The company says economic turmoil in the region has made shellshocked consumers there reluctant to spend money on Nike sneakers" (CNBC, 2/24). CNN's Lou Dobbs said Nike "surprised Wall Street by saying 'I Can't'" ("Moneyline," 2/24). REAX: Faye Landes, Salomon Smith Barney analyst: "I'm not convinced, unfortunately, that this is the last time that we're going to see this. ... What we're seeing now is serious indigestion after some explosive growth." Landes added that the "underlying factors that have led to this announcement" are "unlikely to dissipate right away." Landes: "[U]nfortunately, there are some real fashion issues and saturation issues which Nike is very unlikely to get past near-term" ("The Edge," 2/24). In DC, Tim Smart writes that teens "are turning against $150" athletic shoes in favor of "brown hiking boots and other more mundane casual shoes." Nike's inventory buildup at retail reflects "their less-than-exalted status," and Nike said its inventory had "soared" by nearly $500M to $1.4B (WASHINGTON POST, 2/25).