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NIKE TOPS EXPECTATIONS, STILL FALLS BELOW '97 REVENUE LEVELS
Published September 18, 1998
Nike "topped expectations" for '98 first quarter "profit but continued to be hurt by weak footwear sales and orders in Asia and the U.S. market," according to Don Clark of the WALL STREET JOURNAL. Nike reported that net income in the fiscal first period ended August 31 declined 35% to $163.8M, or $.56 a diluted share, from the year-earlier level of $253.1M, or $.85 a share. The latest results are $.08 above Wall Street's per-share estimates of $.48. Revenues dropped 9.5% to $2.5B from $2.77B, while orders for footwear and apparel to be delivered between September and January declined 15%. Nike's "good news came mostly from spending less money in the period than expected." Clark adds that Nike's "demand picture is mixed." Future orders in Asia Pacific were off 56%, while future orders in the U.S. were off 7% (WALL STREET JOURNAL, 9/18). Nike also announced that it plans to eliminate approximately 300 positions, about 15% of the workforce, throughout its Asia Pacific operation to better align its overall cost structure and organization with planned revenue levels (Nike). On CNBC, Joe Kernen reported that while Nike "beat estimates," when "you look at last year and ... future orders, it's probably not roses" ("The Edge," CNBC, 9/17). TAMING THE TIGER: In the cover story of USA TODAY's Money section, Bill Meyers writes that Nike "is completely revamping the [Tiger] Woods brand." Nike "has gone back to the drawing board to redesign" its Woods line for "'classic' golfers, whose primary sports activity takes place on the fairways." To do that, Nike "is toning down the Woods gear so it's more Armani than Gap. The new line, which will appear in stores next spring, will feature shirts with small prints and subtle logos as well as understated trousers in blended silk and gabardine." Woods is reportedly "playing a major role" in the redesign (USA TODAY, 9/18). MORE NIKE: In Denver, Mike McPhee writes that just as Nike is set to open a NikeTown in Denver, "the company is drastically cutting back its most recognized symbol -- the swoosh." McPhee: "The move is perplexing, since the company is spending millions to set up Niketowns across the country." Nike Dir of Corp. Communications Lee Weinstein: "We feel we've kind of overused the swoosh. We've sort of been relying on it too much to do everything." But a Univ. of CO Athletic Dept. spokesperson said it has not been told to expect changes to the swoosh adorning the school's uniforms or coaching shirts. CU spokesperson Dave Plati: "To take it off our uniforms and coaching shirts would cost a lot of money. We're proud of Nike" (DENVER POST, 9/18).