Nike recently reported FY 2009 Q2 Earnings. Net Income was up 8.8% Revenue was up 6% and EPS was up 13% to 80 cents a share. Reported future orders were down one percent from last year however, excluding foreign currency exchange rates these orders were actually up 6%. Overall US sales decreased 1% lead by a 17% decrease in the equipment segment while the footwear segment was able to maintain slight positive growth. International revenues were very strong for the quarter lead by Asia Pacific and the Americas which grew 22% and 21% respectively. The company was able to beat analyst earnings estimates by two cents primarily driven by oversees growth. Nike also increased it GM by 40bp and raised its dividend by 9%.
I still see Nike's brand image and loyalty along with its superior ability to penetrate and grow within emerging markets driving growth for them over the next year or as long as we remain in a US and Global recession. While I do see further softening for demand in the footwear industry both in the US and abroad, which I feel I compensated for in my earnings estimates and valuation. I believe Nike is still well positioned to weather the storm with its strong market share and significant amount of cash, and use this as means of gaining market share as many small companies continue to struggle.
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