Nike Inc. (NYSE: NKE) seems to be avoiding the recession so far.  Not entirely, but much better than other we have seen. The sports apparel giant made a profit of $391 million, or $0.80 EPS.  It posted roughly an 6% gain in revenue from last year’s quarter to $4.6 billion.  The estimates from Thomson Reuters (First Call) were $0.79 EPS and $4.73 billion in revenue.

Nike’s numbers are good, but there are some obvious trends at work that show that Nike is not immune from the recession.  Gross margins rose 0.4% to $44.7%, but SG&A as a percent of revenue gained by 0.8% to 33.7%.  The company ended the quarter with $2.7 billion in cash and equivalents, down about $400 million from the same period last year.

The company is still seeing strong demand for its products.  Worldwide future orders forathletic footwear and apparel for delivery from December to April wereroughly $6.7 billion.  That is a drop of 1% from the same period a year ago, but many would argue that is a win in today’s environment.  This future orders also exclude currency impacts.

The company also talked about the global opportunities.  Maybe it should go acquire competitor Under Armour (NYSE: UA) as Jim Cramer suggested in his shotgun merger feature recently.

There are some other negative, with global inventory up 9% at $2.4 billion.

Shares rose 2% today, but they are down 2% in after-hours at $49.75.  Its 52-week trading range is $42.68 to $70.60.

Jon C. Ogg
December 17, 2008

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