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Nike Stock Drops 13%

May 30, 1997|From Reuters

SEATTLE — Nike Inc. stock fell more than 13% on Thursday after the company said profit for the current quarter would be far less than Wall Street had expected.

Nike tumbled $8.625 to close at $55.375 and was the most active issue, with more than 19 million shares changing hands in NYSE trading.

The collapse came after the athletic footwear and apparel company said it expects net income equal to 51 cents to 56 cents a share for its fiscal fourth quarter, which ends May 31, about 20% below the Wall Street consensus of 69 cents.

Nike blamed the shortfall on several factors, including a shift in Europe to more advance ordering, a shortage of apparel inventories and some cancellations in the United States.

"If you look at these items individually, none of these really are that significant to the quarter," Nike Chief Financial Officer Bob Falcone told analysts in a conference call. "But collectively, when you add them all up, it becomes a significant issue at the top line."

The Beaverton, Ore.-based company also said earnings will be affected by a charge of $18 million, or 4 cents a share, to shut down a Canadian skate-manufacturing facility.

Falcone said that despite the shortfall, Nike is ending an "outstanding" year with revenue and earnings up at least 40%. Last year, the company saw growth of about 36%, with earnings of $545 million on revenue of $6.5 billion.

* PRICE CHART

Recent price history of Nike stock. D6

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