Nike's 4Q 2009 net income fell to $341.4 million down from $490.5 million from a year earlier. The decline is largely attributed to a $200 million pre-tax charge associated with restructuring costs as the company slashed costs across the board- cutting 5% of its global workforce in May and restructuring its supplier contracts. Because of these cost cutting moves, Nike beat Wall Street's Q4 and full-year estimates although its sales and net income both dropped during the year.
Nike announced it would cut 1750 jobs worldwide, or 5% of its total workforce. 500 of the jobs to be cut will be at Nike's world headquarters. The company is seeing demand slow as the global downturn hurts consumer spending.
Nike is suing two Chinese companies for allegedly copying its logo. Nike is seeking a newspaper apology and $44,000 in compensation.
Nike announced it would restructure into 6 geographical regions with reduced management structures. This is part of a wider restructuring that may result in a 4% reduction in the company's workforce.
Nike was the major purchaser at the plants, 3 of which were in China and 1 of which was in Vietnam. The company is facing a worldwide slowdown in consumer demand.
Nike announced details of a restructuring plan that could involve cutting up to 1400 jobs.
Excluding the company's investment decline in Umbro, Nike's net income would have risen 4% to $484.5 million.
Nike said that it could potentially cut 1400 of its 35000 employees after the current quarter's review, which ends May 31.
Nike's Q2 revenue increased by 6%, driven primarily by a 6% and 22% growth in the EMEA and Asia Pacific regions, respectively. However, U.S. sales dropped by 1% during the quarter because of slumping consumer spending. Furthermore, the company's net income increased by 9% from a year earlier driven by higher gross margins and the aforementioned revenue growth. However, some concern remains about the decrease in U.S. sales as well as the slowing growth in the Asia Pacific region- in Q1 2009 Nike's sales in the Asia Pacific region grew by 36%, compared to the 22% growth in Q2.
Nike's Q2 Profit Rose to $391 million, an increase of $31.6 million from its year-earlier period. Revenue was up 6% from the year-ago period.
Nike increased its quarterly dividend by 9%, to 25 cents per share. This increase follows CEO Mark Parker sentiments that the increase "reflects our ongoing confidence in Nikes long-term growth prospects, expanding cash flows and strong balance sheet."
Nike's revenue in Q1 2009 reached $5.4 billion, a 17% increase from a year earlier. This growth was primarily driven by a 20% and 36% increase in the EMEA and Asia regions, respectively
Nike Sponsors the Beijing Olympics. Revenues increase 50% in August
Nike shares, in addition to many other retail companies, fall on executive guidance citing warnings about uncertianty in sales across the retail industry as a result of the current credit crisis.
Ticker Mine surveyed three individual retailers at several locations (Dicks Sports Goods, Foot Locker, and The Finish Line) and all three retailers responded Nike shoes and apparel were top sellers at the largest number of locations.
Sales in China surged 50%, ahead of the 2008 Beijing summer Olympics. Net income surged 32 percent to $463.8 million, or 92 cents a share. Revenue rose 16 percent to $4.54 billion, ahead of the $4.35 billion estimated by analysts.
Nike Begins Plans on Marketing Eco-Friendly Footwear and Sports Apparel
Rumors that Japanese shoe company was considering a joint Adidas takeover with Nike were largely dispelled after a statement from Asics today. Shareholder excitement over a takeover pushed Adidas up 2% on Monday.
Nike's share price fell from $54.02 to $51.99 as Nike and Payless announced plans to collaborate on a new, low-cost shoe. Investors worried that the shoe represents a departure from Nike's traditional niche and does not promise high profit margins.
