Nike Inc. Reports 35% Profit Drop, Beats Estimates
Nike Inc. topped expectations for first-quarter profit but continued to be hurt by weak footwear sales and orders in Asia and the U.S. market.</br></br>The Beaverton, Ore., shoe company said net income in the fiscal first period ended Aug. 31 declined 35% to $163.8 million, or 56 cents a diluted share, from the year-earlier level of $253.1 million, or 85 cents a share. The latest results are eight cents a share above Wall Street's per-share consensus of 48 cents, as tallied by First Call Corp.</br></br>But Nike's good news came mostly from spending less money in the period than expected. Revenue dropped 9.5% to $2.5 billion from $2.77 billion, while orders for footwear and apparel to be delivered between September and January declined 15% from the year-earlier period.</br></br>Philip H. Knight, Nike's chairman and chief executive officer, said economic signals out of Asia continue to be negative, requiring additional cost-reduction steps. So the company also announced it intends to cut about 300 jobs in its Asia Pacific region, or about 15% of its work force in the region. "There is not a lot of daylight as far as the economic crisis in Asia is concerned," Mr. Knight said in a conference call with analysts and reporters.</br></br>Nike released its results after stock markets closed. In New York Stock Exchange composite trading, its shares fell $2.3125 to $33.75 and didn't trade after hours.