Nike Inc. said Wednesday its fourth-quarter net income fell more than 30 percent, eroded by a 16 percent decline in worldwide apparel sales and unfavorable currency fluctuation.
This story first appeared in the June 25, 2009 issue of WWD. Subscribe Today.
In the three months ended May 31, the Beaverton, Ore.-based athletic footwear and apparel giant recorded a 30.4 percent decline in net income to $341.4 million, or 70 cents a diluted share, from $490.5 million, or 98 cents a share, a year ago. Excluding costs for restructuring and other charges, earnings per share totaled 99 cents in the quarter, 3 cents above the consensus estimate reported by Yahoo Finance.
In a move to trim costs and streamline operations, the company cut about 1,750 positions, 5 percent of its global workforce, during the quarter.
Sales in the three months fell 7.4 percent to $4.71 billion from $5.09 billion in 2008. Worldwide sales of footwear, the company’s largest business, slid 3 percent, to $2.58 billion. Apparel sales were $1.17 billion during the period, a 16 percent fall.
Nike said net revenues would have been “essentially flat” without the effects of currency shifts.
Mark Parker, president and chief executive officer, said on a call with analysts that Nike is targeting modest growth for the new fiscal year but expects factors such as more currency fluctuation to weigh on gross margins.
“I believe the markets will not be driven by the frugal consumer, but by the focused consumer,” he said. “Innovation does not stop at the $100 price point. We’re busy creating sharper and more compelling products up and down the price ladder, and that’s especially important given the times we’re in.”
Footwear and apparel ordered for delivery from June through November totaled $7.8 billion, down 12 percent against last year.
For all of fiscal 2009, Nike’s profits slid 21.1 percent to $1.49 billion, or $3.03 a share, from $1.88 billion, or $3.74 a share, in the previous year. Sales grew 2.9 percent to $19.18 billion from $18.63 billion. Apparel sales inched up 0.2 percent to $5.24 billion and accounted for 31.5 percent of the total.