Nike, Inc. (NYSE: NKE) reported fourth quarter 2010 earnings after the market closed yesterday. Diluted EPS came in at $1.08, better than previous estimates of $1.06, and up substantially from $0.70 in the same period a year ago. Revenues for the quarter totaled $5.1 billion, up from $4.7 billion a year ago and in line with expectations.
In related celebrity news, the company’s Nike Golf division posted a drop in revenues of 2%. Whether or not that can be attributed to Nike’s decision to stick with Tiger Woods is arguable. The company’s Cole Hahn division also saw revenues fall by 2%, and Woods doesn’t have anything to do with that division, so it seems that all the sound and fury did not signify much.
The company reported that footwear and apparel scheduled for delivery between June and November of this year totals $8.8 billion, up 7% from a year ago. Excluding the effects of a weakening euro, the increase would have been 10%. In Europe, future orders are down 2% on a revenue basis although the value of the orders would have been up 11% excluding the effect of currency changes. Revenue from future orders in China are up 19% and from emerging markets orders are up 30%.
In the company’s conference call Nike’s president and its CEO both addressed how the company plans to grow its sales in China. The company plans to move more forcefully into markets in the smaller cities and is considering introducing new products at lower price points to address those markets.
Nike remains “bullish” on China as a market for its Nike-branded products and has no plans to drop prices for those products. In smaller markets, what the company refers to as third- and fourth-tier cities, Nike says it is “looking at the [product] portfolio to help supplement” the opportunities it sees in these smaller markets.
While the earnings report was generally positive, the outlook on revenue from Europe due to a declining euro cast some doubt on the company’s projections. Analysts estimate EPS for the first fiscal quarter of 2011 at $1.14 and revenues at $5.19 billion. Unless Nike can increase its market share in Europe to offset the negative impact of the currency exchange rate the company will struggle to hit those estimates.
Shares of Nike fell 2.2%, to $70.95, in after-hours trading following the earnings report.
(NKE)
Nike, Inc. (NYSE:NKE) reported fourth quarter 2010 earnings after the market closed yesterday. Diluted EPS came in at $1.08, better than previous estimates of $1.06, and up substantially from $0.70 in the same period a year ago. Revenues for the quarter totaled $5.1 billion, up from $4.7 billion a year ago and in line with expectations.
In related celebrity news, the company’s Nike Golf division posted a drop in revenues of 2%. Whether or not that can be attributed to Nike’s decision to stick with Tiger Woods is arguable. The company’s Cole Hahn division also saw revenues fall by 2%, and Woods doesn’t have anything to do with that division, so it seems that all the sound and fury did not signify much.
The company reported that footwear and apparel scheduled for delivery between June and November of this year totals $8.8 billion, up 7% from a year ago. Excluding the effects of a weakening euro, the increase would have been 10%. In Europe, future orders are down 2% on a revenue basis although the value of the orders would have been up 11% excluding the effect of currency changes. Revenue from future orders in China are up 19% and from emerging markets orders are up 30%.
In the company’s conference call Nike’s president and its CEO both addressed how the company plans to grow its sales in China. The company plans to move more forcefully into markets in the smaller cities and is considering introducing new products at lower price points to address those markets.
Nike remains “bullish” on China as a market for its Nike-branded products and has no plans to drop prices for those products. In smaller markets, what the company refers to as third- and fourth-tier cities, Nike says it is “looking at the [product] portfolio to help supplement” the opportunities it sees in these smaller markets.
While the earnings report was generally positive, the outlook on revenue from Europe due to a declining euro cast some doubt on the company’s projections. Analysts estimate EPS for the first fiscal quarter of 2011 at $1.14 and revenues at $5.19 billion. Unless Nike can increase its market share in Europe to offset the negative impact of the currency exchange rate the company will struggle to hit those estimates.
Shares of Nike fell 2.2%, to $70.95, in after-hours trading following the earnings report.
Paul Ausick
