Nike "broke its rut" Thursday with its 2001 fiscal
first quarter earnings ended August 31, according to Andy
Dworkin of the Portland OREGONIAN. Nike reported quarterly
net income of $210.2M, or $0.77 a share, on sales of $2.64B.
The earnings beat analysts estimate of $0.75 per share and
"indicate that Nike has regained its fiscal footing after a
couple of lackluster years." The turnaround is credited to
"efforts to control inventory and hold costs down." But
Nike VP & GM Charlie Denson said, "We're not out of the
woods completely." Dworkin notes the "dark point" in the
"relatively good first-quarter earnings report" was Nike's
domestic sales of shoes and clothing, as Nike's U.S. shoe
sales fell 1% from last year's first quarter to $935M.
Overseas, Nike "logged bigger gains," as sales in Europe
rose 6% to $776M (Portland OREGONIAN, 9/15).
REAX: CNBC's Darby Mullany reported that Nike's "good
news" was that its gross margin increased 1.9% to 40.5%,
while the "bad news" was worldwide futures orders were flat
at $3.1B. Mullany: "Nike said the flat number was due in
part to currency issues involving the Euro. Without those
currency issues, Nike says orders would have been up 4%. ...
Broken down by region, future orders in the [U.S.] were down
6%, in Europe they rose 3%, and in Asia they rose 10%."
First Security Van Kasper's John Shanley stated Nike's
operating profit margins in their international business are
"higher than they are domestically." Shanley: "We think
that momentum really should be factored in terms of where
this stock should be trading" (CNBC, 9/14). Shanley: "[Nike
seems] to be intent on preserving the integrity of the brand
by pulling some product out of the mid-tier sector of the
marketplace, out of retailers that may have had some image
problems themselves or may have been using Nike product and
the athletic footwear products as a whole as traffic
generators within their stores" (CNBC, 9/14).
