NEW YORK — Nike Inc. shrugged off the global economic turmoil as robust worldwide sales propelled the company to impressive profit gains in the fourth quarter and fiscal year.
This story first appeared in the June 28, 2002 issue of WWD. Subscribe Today.
For the three months ended May 31, the Beaverton, Ore.-based marketing colossus reported a 28.1 percent surge in net income to $208.4 million, or 77 cents a diluted share. That compares with last year’s earnings of $162.7 million, or 60 cents. Fourth-quarter earnings per share topped Wall Street expectations by 2 cents.
Quarterly revenues grew 8 percent to $2.68 billion from $2.48 billion a year ago.
In a separate development, the company said that NikeGoddess, the women’s apparel retail concept with two doors in Southern California, will be open for the first time as an in-store shop on Saturday when it makes its debut at Macy’s Herald Square here. The 1,100-square-foot shop is “a direct takedown of the NikeGoddess stores” with a focus on Nike apparel, a small footwear salon and a portion of a blue tile “runway” reminiscent of the famous swoosh.
During the fourth quarter, the European region, which includes Africa, recorded the largest revenue gains, inflating 14 percent to $783 million from $687 million last year. Of that total, apparel sales increased 13 percent to $257 million. In the U.S., Nike’s largest market, sales rose 8.3 percent to $1.3 billion as apparel revenues inched up 3 percent to $318 million.
In the Americas, excluding the U.S., sales improved 7.6 percent to $142 million with apparel sales chipping in a 4.1 percent increase to $38 million. Revenues from the company’s Asia Pacific territory increased 6.3 percent to $321 million with apparel accounting for $123 million, or a 16 percent jump from a year ago.
“I personally am very proud of Nike’s performance this fiscal year,” said chief executive officer Phil Knight on a conference call with analysts. “Inventories are down from last year. As a stock, Nike outperformed the [Standard & Poor’s 500] by 32 percent. Obviously, there are no guarantees in this business, but I am very optimistic about the future.”
Knight added that after appearing in some 80 quarterly earnings presentations, he will no longer contribute to them in the future. Knight said his decision was a vote of confidence in his management, and will allow him to concentrate more on his other duties as chief executive.
Nike reported that worldwide future orders for athletic footwear and apparel scheduled for delivery between June and November 2002 swelled 7 percent to $4.6 billion from $4.26 billion in the same period last year. By region, the U.S. increased 3 percent, Europe grew 12 percent, Asia Pacific also rose 12 percent, with only the Americas reporting a decline, dropping 6 percent.
Overall, for the full fiscal year, Nike reported a 12.5 percent increase in net income to $663.3 million, or $2.44 a diluted share, matching consensus estimates. That compares with last year’s earnings of $589.7 million, or $2.16. Sales for the year fell just short of the vaunted $10 billion mark, as net revenues increased 4.3 percent to $9.89 billion from $9.49 billion a year ago.
The Herald Square NikeGoddess will be the third location for the concept overall. The first location was unveiled at Fashion Island in Newport Beach, Calif., last October. A second location opened at The Grove in Los Angeles in March.
The stores were opened in large part to get feedback from female consumers on Nike products. “The stores are exceeding our expectations,” said Jodi Sittig, a Nike spokeswoman, declining to comment further on financial performance.
Four more NikeGoddess in-store shops are expected to bow by September. Aside from a location within Macy’s West in Union Square in San Francisco, the shops are bound for independent sporting goods stores in Dallas, Chicago and Honolulu. A NikeGoddess shop is also headed for Niketown New York, which is slated for a renovation.”