BEAVERTON, Oregon – Nike Inc., the world's largest sports clothing maker, on Thursday reported a one percent decrease in fiscal first-quarter earnings, hurt by foreign exchange rates and problems with inventory levels but topping analysts' estimates.
Nike said worldwide future orders for its sneakers and clothing set for delivery between September and January were up six percent over the year-ago period to $3.3 billion, positioning the company to meet its full-year goal of earnings growth.
``The futures orders we reported this quarter position us well for delivering on our goal of full-year earnings growth,'' Nike Chief Executive Officer Philip Knight said in a statement.
Knight said a four percent rise in U.S. orders showed a turnaround for Nike's key U.S. business.
For the first quarter ended Aug. 31, net income was $199 million, or 73 cents a share, including a charge for accounting changes of 2 cents a share. Analysts were looking for Nike to earn 71 cents a share on average, according to Thomson Financial/First Call.
Revenues were $2.61 billion, a 0.1 percent decrease from $2.64 billion in the year-earlier period for the maker of Michael Jordan and Cole Haan shoes.
Nike, which controls about 40 percent of the U.S. athletic shoe market, warned analysts in June that it was looking to the second half of its fiscal year -- the winter and spring season -- to generate its earnings growth for the entire year.
Nike, a member of the S&P 500, has seen its shares drop about 24 percent since the beginning of the year. The S&P 500 is down about 22 percent for the year.
Nike Chief Executive Officer Philip Knight, who had his own bonus cut over the summer because of the company's poor performance, had blamed a strong U.S. dollar, supply chain management problems and weakness in domestic sales.
But on Thursday in a statement, Knight said, ``We are very pleased with the significant progress we have made in managing through the challenges in our U.S. footwear business and the continuing effect of weaker foreign currencies.''
Wells Fargo analyst John Shanley, in an interview before Nike's earnings were released, said he had spoken to several executives and the ``supply chain is totally fixed...They have a few things left to tweak, but it's minor.''
Shanley attended the European shoe show in Dusseldorf, Germany last week and said he was encouraged after speaking to a dozen top Nike retailers.
``They're looking to buy in 2002,'' he said, adding that . Shanley reiterated his buy rating on Nike with a share price target of $55 on Wednesday.
Nike closed down 49 cents to $42.26 in trading on the New York Stock Exchange.