Nike future orders disappoint, shares fall
DETROIT: Nike Inc (NKE.N) posted future orders data that missed many analysts' expectations Tuesday, sending shares of the world's largest athletic shoe and clothing maker down almost 6 percent.
Nike also said it might undertake some targeted price increases to help offset rising cotton costs.
Future orders, excluding currency exchange rates-a key measure of sales growth-rose 11 percent. "They didn't beat rising expectations for future orders and that's why the stock's down," said Jon Fisher, portfolio manager with Fifth Third Asset Management, which owns Nike shares. Wall Street was looking for future orders growth of 12 to 13 percent, he said. Nike executives also repeated comments made in the previous quarter that rising cotton, labor and transportation costs would hurt profit margins in the second half of the fiscal year despite rising demand. They said the cost pressures would ease over the next 12 to 18 months.
"As supply and demand find a new normal in the recovering economy, our industry is going to experience margin pressure due to rising input costs," Nike Chief Executive Mark Parker said on a conference call. Forecast-beating quarterly profits reported by athletic footwear retailer Finish Line Inc (FINL.O) Tuesday underscored the demand. -Ap