Nike Warns on Expectations
BEAVERTON, Ore. (AP) _ Nike said it still expects earnings per share to grow 20 percent, but warned its results may fall short of expectations for fiscal 2000.
The athletic shoe maker said in a statement Tuesday it has fared well despite a shakeout in the U.S. retail industry. But Nike president Tom Clarke said that annual earnings per share could fall below the current estimates of $2.08 by analysts surveyed by First Call/Thomson Financial.
Excluding a restructuring charge, Beaverton-based Nike earned $1.66 per share in fiscal 1999, which ended May 31. A 20 percent increase would mean earnings of about $1.99 a share.
Clarke said many of Nike’s retail partners in the U.S. have experienced a slump in footwear sales, causing them to close many of their stores.
A number of analysts had already expressed concern about domestic sales for Nike with some of its principal outlets, including Venator, cutting back orders and other companies such as Just for Feet closing stores.
When Nike announced its second-quarter earnings in December, it said that orders in the United States were down 8 percent, noted John Shanley of First Security Van Kasper.
``What you seeing in the weakness of Nike futures orders in the U.S. is a clear reflection of retail shrinkage,″ Shanley said.
Nike chairman Phil Knight had warned in December that the consolidation of the U.S. retail market ``may have an adverse effect on our revenues in the short run,″ but that in the long term it would strengthen business for Nike and retailers.
Clarke remained optimistic Tuesday about overall growth for Nike, with strong sales expected in Europe and Asia.
Jennifer Black of Black & Co. in Portland said the consolidation of smaller sports shoe retailers would be painful in the short term for Nike _ but she agreed with Knight that will improve the health of the industry.
``I think this is a pretty conservative outlook,″ she said. ``It has really dampened their enthusiasm. But in the long term, they are the dominant player.″