Nike, Just Did It (NKE)

NIKE, Inc. (NYSE: NKE) reported quarterly revenue rose 17% to $5.4 billion, although currency changes increased growth by 7%. Net income fell 10% to $510.5 million, as earnings per shareh fell 8% to $1.03.  Net income and earnings per share would have actually increased 10% and 12% respectively if it were not for a tax credit in 2007. First Call had estimates earnings estimates of $0.92 on $5.19 billion in revenue.

The sports shoes and apparel leader said worldwide orders scheduled for delivery from September2008 through January 2009 came to $6.8 billion.  That number is 10% higherthan last year and currencies only account for 1% of that gain. Orders for the U.S. were up 3%; Europe, Middle East and Africarose 4%; and Asia Pacific and the Americas each grew 27%.

For the first quarter, other business revenue, which include ColeHaan, Converse Inc., Hurley International, NIKE Golf, and UmbroLtd, which was acquired in the fourth quarter of last year, grew 7% to$655.3 million from $612.8 million last year. Pre-tax income fell 9%to $86.3 million.

In this first quarter of fiscal 2009, gross margins were 47.2% compared with 44.8% for the same period last year. As expected, SG&Awas 34.2% of revenue compared with 30.8% last year.  Some of that gain was attributed to promotion costs and to the Olympics.

At quarter end, global inventories stood at $2.5 billion, up 14% yearover year.  Cash and short-term investments were $2.6 billion, down from $2.8 billion a year ago. During the firstquarter, Nike bought back 7,068,980 shares for approximately $429.8million.

Nike closed down 2.5% at $59.27 today and no real after-hoursindications are seen.  Its 52-week trading range is $51.50 to $70.60.

Jon C. Ogg
September 24, 2008