Earnings Preview: Nike Inc.

AP News
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Posted: Dec 15, 2009 1:06 PM

Nike Inc. is scheduled to report earnings for its fiscal second quarter on Thursday after the market closes. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: Nike Inc.'s sales have sagged as consumers around the globe continue to limit their purchases of discretionary items.

The athletic shoe and clothing maker, based in Beaverton, remains the leader in its field and has managed to maintain a respectable profit during the economic downturn through cost cuts and reorganization. While management says it is seeing signs of a gradual recovery, revenue growth is expected to continue to be challenging for the athletic goods company.

The company's global reach could provide insight into changing consumer attitude and the feeling of retailers as well, based on their orders with the company for future delivery.

BY THE NUMBERS: Analysts polled by Thomson Reuters expect Nike to earn 71 cents per share for the quarter on revenue of $4.4 billion.

ANALYST TAKE: Barclays Capital analyst Robert Drbul said he expects revenue to decline 5 percent, which is still a mild recovery on a global basis. He noted the company is expected to benefit from last year's drop in oil prices and leaner inventories.

Looking forward, Drubl said that he expects improvements in orders for near-term delivery despite the challenging environment.

WHAT'S AHEAD: Nike continues to invest heavily in its product development and may face uncertain demand for its products tied to soccer's World Cup, usually a major event for the company. Despite the intense media attention, Nike is unlikely to further discuss its relationship with Tiger Woods. It has said it stands by the golfer, who on Friday said he was taking time off from the sport to work on his marriage, and has declined to discuss the matter further.

STOCK PERFORMANCE: Nike shares grew nearly 17 percent during the quarter and more than 33 percent during the past 52-weeks.