US: Nike Q3 profit tumbles 47% on charges
The Beaverton, Oregon based firm also issued a note of caution in the months ahead, saying worldwide orders for Nike brand athletic footwear and apparel scheduled for delivery from March 2009 through July 2009 - a key indicator of future sales - are 10% lower than last year, at $6.5bn.
By region, futures orders for the US are down 1%, EMEA (which includes Europe, the Middle East and Africa) decreased 25%, Asia Pacific fell 1% and the Americas dropped 4%.
In the three months to 28 February, net income was down 47.4% , to $243.8m or $0.50 per share, from $463.8m or $0.92 per share in the same period last year.
Excluding a $240.7m charge related to the write-down of goodwill and other assets at Umbro, quarterly profit would have increased 4% to $484.5m or $0.99 per share, the company said.
Revenue fell 2% to $4.4bn, from $4.5bn last time. Excluding changes in currency exchange rates, revenue would have increased 2%.
"In a challenging environment, we delivered excellent operating results by executing with both focus and flexibility," said Mark Parker, president and CEO.
US revenues rose 3% to $1.6bn, sales in the EMEA region tumbled 14% to $1.2bn, Asia Pacific was up 8% to $806.9m, and the Americas were down 5% to $245.4m.
Revenue for the other businesses, which include Cole Haan, Converse, Hurley International, Nike Golf, and Umbro, increased 1% to $592.2m.
Third quarter gross margins dropped to 43.9% from 45.1% on higher product input costs and product markdowns.
At quarter end, global inventories stood at $2.5bn, an increase of 3% on the same period a year earlier.
Last month Nike confirmed that an ongoing restructuring of its business could lead to the loss of up to 1,400 jobs, around 4% of the company's global workforce.
All regions, brands and divisions are being reviewed as part of a long-term drive to cut costs, increase efficiencies and bring the Nike business closer to the consumer, the US company said.
As part of this effort, the company says it is reviewing its entire supply chain from its sourcing base to its retail footprint, and expects to incur pre-tax restructuring charges of between $175m and $225m.
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