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Document 12 of 67.

Copyright 1998 Information Access Company,
a Thomson Corporation Company;
ASAP
Copyright 1998 Capital Cities Media Inc.
WWD

September 18, 1998

SECTION: No. 187, Vol. 175; Pg. 16; ISSN: 0149-5380

IAC-ACC-NO: 21145880

LENGTH: 426 words

HEADLINE: NIKE FIRST-QUARTER NET OFF 35%; CITE ASIA ILLS.

BYLINE: Curan, Catherine

BODY:
NEW YORK -- Continuing to feel the effects of financial turmoil in Asia and a tough climate for athletic footwear, Nike Inc.'s first-quarter profits fell 35 percent, and the company plans to cut another 300 jobs in its Asia/Pacific operations.

Apparel sales -- while down in the U.S. -- were ahead 6 percent on a worldwide basis in the quarter, but global footwear sales fell 19 percent, and worldwide futures orders for footwear and apparel are down 15 percent to $ 3.2 billion.

In the quarter ended Aug. 31, Nike earned $ 163.8 million, or 56 cents a diluted share, against $ 253.1 million, or 85 cents, a year earlier. Wall Street had expected latest-quarter earnings per share of 48 cents.

Shares of Nike fell 2 3/16 to 33 7/8 Thursday on the New York Stock Exchange. Results were released after the close of trading Thursday.

The staff cuts announced Thursday come on top of massive layoffs announced in March as part of a restructuring program that included a $ 129.9 million charge taken in the fourth quarter. Nike laid off 1,600 people during its fiscal year ended May 31.

In a statement, Philip H. Knight, chairman and chief executive officer, of the Beaverton, Ore.-based company, said first-quarter results were helped by lower-than-expected spending. He expects spending to reach "more normal levels" beginning in the second quarter, but said Nike will focus on cost controls "as evidenced by the actions we announced today regarding our Asia/ Pacific operations." Nike said these cuts reduce its Asia/Pacific workforce by 15 percent, to "better align its overall cost structure and organization with planned revenue levels."

Sales in the quarter slid 9 percent to $ 2.50 billion from $ 2.77 billion. Gross margin declined to 37.6 percent of sales from 39.8 percent.

In the U.S., apparel revenues declined 5 percent to $ 405.2 million. Nike said that while footwear revenue was down 13 percent, fewer closeouts in footwear boosted gross margin compared with the last few quarters.

In Europe, revenues rose 12 percent to $ 680.9 million, with double-digit gains in France, Italy, Spain and Germany.

In the Asia/Pacific region, revenues plummeted 46 percent to $ 199.1 million, with revenues off 53 percent in Japan. In the Americas, revenues declined 15 percent to $ 144.9 million.

Revenues from other brands, including Cole Haan, rose 12 percent to $ 132.1 million. Despite the reference to "lower-than-expected spending," selling, general and administrative expenses rose to 26.1 percent of sales from 23.8 percent.

LANGUAGE: ENGLISH

IAC-CREATE-DATE: September 25, 1998

LOAD-DATE: September 26, 1998