Nike's Profit In Its Second Quarter example essay topic

Nike throughout its years of success has had its ups and downs. The company has either been sued, or throughout the years the competition has been getting stronger and stronger. Nike Inc. has expensive endorsement contracts with star athletes in order to dominate the entire athletic footwear business. By doing so it makes fans like myself want to go out and get the shoes. In 1998 the giant footwear and apparel company was being hurt by the Asian economic slowdown, criticism of working conditions in the company's overseas factories and savvy marketing thrusts by competing brands such as Adidas. Adidas has used its European clout to build bridges to soccer, the world's fastest-growing sport.

And the German company had signaled its intent to challenge Nike on its own turf, possibly by signing an endorsement deal with a National Football League team. Nike has recognized the need for change in its marketing and in its product lines. For a period of time Nike had gotten very sloppy. But now they are starting to show some new technologies, sharper pricing and an understanding of the need to segment their products to combat market saturation. In 1999, Nike's profit in its second quarter had risen 50 percent as foreign sales helped the athletic footwear and apparel company exceed analyst expectations. Nike said that its net income rose to $107.5 million, or 38 cents to a dulled share, from $68.9 million, or 24 cents a share a year earlier.

Nike's president Thomas Clarke said, "We " re very focused on getting the top line growing again and this past quarter we did that for the first time in two years". Nike said that the athletic footwear revenue in the United States rose 9 percent, to $722.9 million, but that athletic apparel revenue fell 10 percent, to $302 million. European revenue rose 13 percent, to $404.7 million, according to the company, while revenue in the Asian-Pacific region jumped 23 percent, to $242.6 million. Nike also has stumbled in recent years when it comes to reaching younger consumers. The company got a black eye in the mid-1990's when it tried to use its considerable advertising might to bull its way into the extreme sports market. Some marketers point to Nike's size and largely successful heritage as part of its problem.

Nike has faced an uphill ride in snowboarding. With $8.99 billion in worldwide revenue, the shoe and apparel company dwarfs the entire snowboard industry. But Nike never fulfilled its plan to market a Nike snowboard line. In September 2000, Nike filled the Great Western Forum with 40 tons of snow, dozens of top riders, and rapper Eminem for a daylong party. In addition to polishing Nike's image in Southern California, the local marketing team hopes to uncover trends breaking in a sports rich environment that un corporates basketball and baseball as well as in-line skating, motorcross, snowboarding, and jet ski riding.

In the year 2000, analysts had expected Nike to post earnings of 74 cents a share, according to First Call / Thomson Financial. Nike was off to a very good start for the fiscal year with accelerating revenue growth and increasing profitability. The weakness in the Euro put pressure on Nike's profitability, although it was able to meet its goals.