Nike's 1Q profit beats estimates, shares rise

By SARAH SKIDMORE

posted: 38 DAYS 23 HOURS AGO

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PORTLAND, Ore. -Nike Inc. on Tuesday reported its profit was practically unchanged in its fiscal first quarter while revenue fell sharply as consumers around the globe limited their spending.

The Beaverton-based athletic shoe and clothing company reported it earned $513 million, or $1.04 per share, for the quarter — beating analyst expectations of 97 cents per share and sending its shares up in after-hours trading.

The company earned $510.5 million, or $1.03 per share in the same quarter last year.

Revenue fell 12 percent to $4.8 billion — narrowly missing analyst expectations of $4.9 billion.

Nike executives said while consumers remain cautious, the company is focused on long-term growth and it will push harder than ever for innovative products to help it grow.

"Nike is not a wait-and-see company," its CEO Mark Parker said.

The company has cut jobs, trimmed operations and lowered inventory levels to maintain its profitability during the recession. Parker said Nike is "leaner, hungrier and more entrepreneurial than ever before" and has one of the strongest balance sheets in the industry.

But retailers and consumers both remain reticent.

Nike's sales fell around the globe, with particular struggles in Europe and China.

But it was able to gain market share in some areas and its Converse subsidiary had one of its most profitable quarters yet.

The company's future orders, a key measure for the company that indicates what retailers and other customers are planning to have delivered for the coming season — fell 6 percent compared to last year.

Nike, which does not issue formal guidance, said it expects overall revenue to be down in 2010, although sales should improve in the second half of the year.

Investors were cheered by the company's ability to perform in the tough economy and sent Nike's shares up $2.70, or 4.5 percent, to $62.79 in after-hours trading Tuesday.

2009-09-29 19:36:28