Nike Reports Q2 Profit Growth On Strength Of Int'l Gains
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Nike Sees U.S. Revenue Drop
Due To Declining Equipment Sales |
Nike's FY Q2 revenue increased 6% to $4.6B from the year-ago period, and the company's global reach helped boost profit 9%, according to Laura Oppenheimer of the Portland OREGONIAN. Nike posted a $391M net income ($0.80 per share) for Q2, up from $359.4M ($0.71 per share) last year and "slightly beating Wall Street's expectations." But U.S. revenue dropped 1%, with equipment "taking the biggest hit." Domestic pre-tax income dropped 18% as Nike "spent more on marketing and launched new retail stores." Nike reported a 6% revenue gain in Europe, a 21% improvement in the Americas and a 22% increase in the Asia Pacific region. Oppenheimer notes it has "become obvious in recent months that the economic downturn will affect sporting goods companies," but Nike execs said that they have "taken measures to weather the downturn: a hiring freeze, cuts in travel and other expenses, and a slower schedule for opening new stores." Nike President & CEO Mark Parker: "We all know that no one, including Nike, is immune to macroeconomic forces" (Portland OREGONIAN, 12/18). CNBC’s Brian Shactman reported same-store sales at its Niketown stores “dropped nearly 20%” in the U.S., as “many of those stores are in tourist areas which have been hit hard by the economic downturn” (“Worldwide Exchange,” CNBC, 12/18). The WALL STREET JOURNAL's Kathy Shwiff reports sales of products with the Nike swoosh climbed 5.8% to $4.59B, while sales at subsidiaries including Converse, Cole Haan and Hurley dropped 4.3% to $564.5M (WALL STREET JOURNAL, 12/18). At presstime, shares of Nike are trading at $52.86, up 4.4% from yesterday's close at $50.64 (THE DAILY).
FIRST CUT OF ROUGH: In San Diego, Mike Freeman reports TaylorMade-adidas Golf "expects to eliminate 170 positions through attrition and layoffs over the next year as a result of its acquisition" of Ashworth. TaylorMade-adidas Golf Dir of PR Scott Leightman said that "administration is expected to be hit harder than jobs related to production of Ashworth's golf shirts." Freeman notes Ashworth has experienced "slumping sales and shareholder unrest over the past couple of years," and TaylorMade-adidas "hopes to expand its footprint in the golf-apparel market with the acquisition." Leightman: "The Ashworth brand is golf lifestyle, and adidas is golf performance. That is not going to change. That's why we feel they are so complementary" (SAN DIEGO UNION-TRIBUNE, 12/18).
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