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Nike seeks to gain on rebound in economy
By Sarah Skidmore |
June 26, 2009, Friday
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NIKE Inc said on Wednesday it is betting on a "swoosh-shaped" global economic recovery and that the athletic shoe and clothing maker is poised to benefit as the gradual rebound begins.
Nike, like many companies, has seen its sales soften during the recession as consumers around the globe limited their spending. But the Beaverton-based company clamped down on costs - cutting jobs, limiting its supplier base and controlling inventory - to deliver fourth-quarter and full-year results that beat Wall Street expectations.
"Even if the worst is behind us, we're taking an approach that's both prudent and opportunistic," Mark Parker, Nike's president and CEO said. "Healthy and smart is the way forward."
Nike reported on Wednesday that its net income fell to US$341.4 million, or 70 cents per share, for the quarter ended May 31, down from US$490.5 million, or 98 cents per share, it earned in the same period last year. The decline was largely due to a nearly US$200 million pre-tax charge tied to restructuring.
Nike cut 1,750 jobs, 5 percent of its global work force, in May. Excluding the cost of those job cuts and other restructuring charges, the company earned 99 cents per share for the quarter - beating Wall Street estimates of 96 cents per share.
However, revenue fell 7 percent to US$4.7 billion for the quarter with declines around the globe. And orders for the next several months are down 12 percent compared with last year.
That disappointed investors, who sent shares of Nike down US$2.57, or nearly 5 percent, in after-hours trading.
"The quarter didn't matter, it was all about the outlook," said Sterne Agee analyst Sam Poser, who has a "sell" rating on Nike.
Nike, like many companies, has seen its sales soften during the recession as consumers around the globe limited their spending. But the Beaverton-based company clamped down on costs - cutting jobs, limiting its supplier base and controlling inventory - to deliver fourth-quarter and full-year results that beat Wall Street expectations.
"Even if the worst is behind us, we're taking an approach that's both prudent and opportunistic," Mark Parker, Nike's president and CEO said. "Healthy and smart is the way forward."
Nike reported on Wednesday that its net income fell to US$341.4 million, or 70 cents per share, for the quarter ended May 31, down from US$490.5 million, or 98 cents per share, it earned in the same period last year. The decline was largely due to a nearly US$200 million pre-tax charge tied to restructuring.
Nike cut 1,750 jobs, 5 percent of its global work force, in May. Excluding the cost of those job cuts and other restructuring charges, the company earned 99 cents per share for the quarter - beating Wall Street estimates of 96 cents per share.
However, revenue fell 7 percent to US$4.7 billion for the quarter with declines around the globe. And orders for the next several months are down 12 percent compared with last year.
That disappointed investors, who sent shares of Nike down US$2.57, or nearly 5 percent, in after-hours trading.
"The quarter didn't matter, it was all about the outlook," said Sterne Agee analyst Sam Poser, who has a "sell" rating on Nike.
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