Segment Review

Nike has been largely affected by the slump in demand for athletic shoes among U.S. mall-based retailers, and the slowing economy. Growth in other world markets helped offset declining sales at home.

For the quarter, U.S. revenue grew just 4% to $1.7 billion from $1.6 billion the year before. Footwear revenue gained 6%, apparel revenue 2% but equipment revenue fell 15% to $78.2 million. Profit before tax declined 10% to $390.7 million in the region. In the year, U.S revenue rose 4% to $6.4 billion.

European revenue increased 19% to $1.5 billion compared with $1.3 billion posted in the corresponding period in 2007. Factoring in currency changes, revenue increased 15 percentage points. Revenue from shoes gained 17% to $889.2 million, apparel 22% and equipment up 16%. The region reported pre-tax income increase of 8% to $326.2 million. European revenue grew 19% to $5.6 billion for fiscal 2008.

Fourth quarter revenues for the Asia Pacific, Nike’s second biggest market, rose to $828 million, up 39% from $596.9 million the year before. Changes in currency exchange rates increased revenue growth by 13 percentage points. Footwear revenues gained 42%, apparel revenues increased 40% to $337.7 million and equipment revenues grew 14% to $68.3 million. Fourth quarter pre-tax income increased 32% to $166.0 million.

Nike said revenue from the Americas region surged 30% to $306.6 million for the quarter, and currency volatility raised revenue by 11 percentage points. Revenue was up in all units-footwear 19%, apparel 77% and equipment 22%.

Other business revenues increased 15% $749.5 million in the quarter, and rose similarly in the year to $2.6 billion. Profit before gained to $336.4 million, up 12%.

Earnings Guidance and Share Price Review

Nike chief executive Mark Parker said the company will invest in new products and seek to raise market share as a cornerstone for future earnings growth.

“Our focus is on working stronger, leaner and smarter through uncertain macroeconomic conditions to maximise our unique potential as a leader and innovator,” Parker said.

Share of Nike traded feel to $63 in after hours trading last Wednesday after announcement of the results. By weekend, the stock was trading around $59.50. Nike has traded in the range $51.50 to $70.60 in the past year.