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PORTLAND — Nike Inc. said Wednesday it is betting on a "swoosh-shaped" global economic recovery and that the athletic shoe and clothing maker is poised to benefit as the gradual rebound begins.
Nike, like many companies, has seen its sales soften during the recession as consumers around the globe limited their spending. But the Beaverton-based company clamped down on costs — cutting jobs, limiting its supplier base and controlling inventory — to deliver fourth-quarter and full-year results that beat Wall Street expectations.
"Even if the worst is behind us, we're taking an approach that's both prudent and opportunistic," Mark Parker, Nike's president and CEO said. "Healthy and smart is the way forward."
Nike reported Wednesday that its net income fell to $341.4 million, or 70 cents per share, for the quarter ended May 31, down from $490.5 million, or 98 cents per share, it earned in the same quarter last year. The decline was largely due to a nearly $200 million pre-tax charge tied to restructuring.
Nike cut 1,750 jobs, 5 percent of its global work force, in May. Excluding the cost of those job cuts and other restructuring charges, the company earned 99 cents per share for the quarter — beating Wall Street estimates of 96 cents per share.
However, revenue fell 7 percent to $4.7 billion for the quarter with declines around the globe. And orders for the next several months are down 12 percent compared with last year.
That disappointed investors, who sent shares of Nike down $2.57, or nearly 5 percent, in after-hours trading.
"The quarter didn't matter, it was all about the outlook," said Sterne Agee analyst Sam Poser, who has a "sell" rating on Nike.
Nike doesn't issue official guidance but said it expects revenue for the 2010 fiscal year to be flat to slightly down on a currency neutral basis — with the weakest period at the beginning of the year.
Parker said he believes that an economic recovery may have already begun and will mimic the company's logo with a protracted gradual process, rather than the "u" or "v"-shaped pattern that economists have debated.
Nike said it is still seeing an appetite for its premium products — with one of its best-selling shoes from the company web site moving at $160. The company said it will continue to reinvest in product development while coming out with new items at a range of prices. The company also plans to continue its tight controls on costs and says this, with other actions, will position it to flourish during a larger economic recovery.
Standard & Poor's Equity Research reiterated a "buy" rating for Nike and praised the company's cash position, with $3.5 billion in working capital.
"We see Nike navigating the weak global economy better than peers as it continues to gain share while benefiting from recent cost reduction programs," S&P analyst Marie Driscoll said.
For the full year, Nike's profit fell to $1.49 billion, or $3.03 per share, down from $1.88, or $3.74 per share in the prior year. Adjusted for several one-time items in both years, the company's net income grew 7 percent to $1.9 billion, or $3.81 per share, for the 2009 fiscal year — above analyst expectations of $3.77.
Nike's revenue rose 3 percent to $19.2 billion for the year.
