Nike Inc. handily beat third-quarter earnings estimates, excluding a $240.7 million impairment charge associated with its Umbro acquisition, but is preparing for shrinking global demand.
With futures orders down 10 percent to $6.5 billion for the fourth quarter, the active giant warned of further layoffs and restructuring charges of $175 million to $225 million in its fiscal fourth quarter.
For the three months ended Feb. 28, the Beaverton, Ore.-based firm’s earnings fell 47.4 percent to $243.8 million, or 50 cents a diluted share, compared with $463.8 million, or 94 cents, in the third quarter of fiscal 2008.
Sales for the quarter dipped 2.3 percent to $4.44 billion from $4.54 billion. Excluding currency exchange rate changes, revenue would have increased 2 percent, with footwear strength balancing weakness in apparel.
Excluding the noncash charge related to the impairment of goodwill of Umbro, earnings would have been up 4 percent to $484.5 million, or 99 cents a share. Analysts’ estimates were 79 cents a share.
“We don’t have to wait until after the economy recovers,” said Nike president and chief executive officer Mark Parker on an after-hours earnings call Wednesday. “We’re able to build a better company, drive cost savings into the business and reinvest in opportunities…to put us in a position to accelerate our strategic vision rather than reinvent it.”
Regional performance for the quarter was varied for the company. In the U.S., Nike sales increased 3 percent to $1.61 billion, with a rise in footwear sales offsetting declines in apparel and equipment. In the Asia-Pacific region, sales climbed 8 percent to $806.9 million, with increases across all categories. But sales in Europe and the Middle East fell 14.5 percent to $1.19 billion, and sales in the Americas region declined 5 percent to $245.4 million.
Sales for the company’s “other businesses,” including Cole Haan, Converse and Umbro, inched up 0.8 percent to $592.2 million. Converse led the way with 30-plus percent growth, while Cole Haan is feeling the economy’s impact, said Parker, who said Umbro will require more work — part of why Nike took an impairment charge related to the brand.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)