Nike Inc (NKE) 2001 Q4 法說會逐字稿

Ladies and Gentlemen thank you for standing by. Welcome to the Nike Incorporated fourth quarter yearend 2001 earnings conference call. During the presentation all participants will be in a listen-only mode. Afterwards, you will be invited to participate in the question and answer session. At that time, if you have a question you will need to press the 1 followed by the 4 on your telephone. As a reminder, this conference is being recorded Thursday June 28, 2001 and will be made available on replay beginning today at 11:00 AM EST in the US till Monday July 2, 01 7:00 PM EST. Please note that if you decide to ask a question, it will be included in any further use of this recording and that any recording or other transmission of the text or audio is not permitted without the express concern of Nike. I would now like to turn the conference over to Kim Charlotte, Director of investor relations. Please go ahead mam.

Good Morning every one and thank you for joining us today. Participants in today's call are Philip Knight, Nike's Chairman and CEO and Don Blair our Chief Financial officer. Mr. Knight and Mr. Blair will both provide brief prepared remarks and then will answer your questions. Also present on the call today are Charlie Denson and Mark Parker both President's of the Nike brand and Rick Anguilla Nike's Vice President of Investor relations. Before I recap the fourth quarter results, which we released earlier this morning let me remind you that on this call we are going to make forward-looking statements based on our current expectation and these statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the report we filed with the SEC including Form-8K, Form-10Q and the Form-10K. Some forward-looking statements concern futures orders that are not necessarily indicative of total revenues through subsequent period due to cancellation and the mix of features and at once orders, which may vary significantly from quarter-to-quarter. In addition, it is important to remember a significant portion of our business including equipment most of Nike retails; four horn and bower are not included in this features numbers and now the results.

Our reported earnings per share for the fourth quarter was $0.60 a 30% increase versus the $0.46 per share reported last year. Revenues for the quarter increased 9% to $2.5 billion. In constant dollars, revenues grew 12% during the period. The strength of our international revenues by region once again demonstrates our opportunities as a global growth company. Revenues for European region grew 14% during the fourth quarter in the phase of continued currency pressure. Had the dollar remained constant European revenues would have been at 19%. During the quarter, European footwear grew 13% in the real dollar apparel was up a 11% and equipment was up 40%. For the fiscal year, European revenues grew up 7% in the real dollars and 19% in constant dollars. Quarterly ages of specific revenues were up 13% in real dollars and 25% in constant dollars. Asia Pacific footwear revenue was up 10% during the quarter, apparel 13%, and equipment 40%. For the fiscal year Asia Pacific, revenues were up 16% in real dollars and 21% in constant dollars. The Americas was down in real dollars and up 2% in constant dollars for the quarter. Footwear was down 9%, apparel was at 1%, and equipment grew 100%. For the fiscal year, the Americas region was up 9% in real dollars and 11% in constant dollars. Total revenue in the US region increased 7% during the fourth quarter. Footwear was up 1%, apparel and equipment were up 17% and 61% respectively. For the fiscal year, US revenues were up 2%. A quick review of the income statement shows that during the quarter gross margins were 37.7% of fourth quarter revenues 310 basis points lower than the same period last year.

SG&A was 26.4% in the fourth quarter revenue with 540 basis point or $67 million lower than the fourth quarter last year. The tax rate for the fourth quarter and fiscal year was 36% one point lower than the prior full year rate and during this quarter, we purchased 2.5 million shares of stock for approximately $98 million. Features scheduled for delivery between June and November of 2001 totalled $4.3 billion; a 3% increase compared to the same period last year. Had the US dollar remained constant at year ago level features orders would have been increased 6%. By region, US features were down 1% Europe was up 7%, Asia was up 3%, and Americas increased 6%. In constant dollars outside the US, features orders in Europe were up a 11%, Asia up 16% and America is up 12%. With those numbers, I would like to turn it over to Nike's original number one draft stick Mr. Philip Knight. Thank you.

Thank you. Pam. Well first of all, I would say that Nike is not a US footwear company alone by itself anymore, but essentially we are more than that, and I know you are getting tired of hearing me say that, but I guess I will keep saying it until it sounds like registry. This reporting period obviously covers the yearend and the yearend was up 5% in sales and 4% in earnings per share, which is not the year really to shout about. But I will say that I am pleased with whoever we close ... I think the fourth quarter was unbalanced pretty good. Having said that there is always some negatives, which I will point out that obviously in the US shoe sector, orders are still going forward ... are still down, gross profit margins are pretty not very good in fourth quarter and we still have some supply change inventory over hand which will go on into the first quarter of fiscal 2002. Having said that, I think the biggest plus obviously is futures orders, which are up 3%, well that by itself is not so terrific that where we sat on March 03 and where we come in today shows real progress. In addition to that, the quarter by itself had a 9% revenue growth and a 30% increase in earnings per share.

Those really generated by what I would characterize as good expense control, good work at reducing inventories, the international business which continues to be terrific, essentially the international picture is marred a little bit by the declining currencies in both the Euro and the Japanese Yen, but essentially we are very pleased with our results not only over the last but over the last two or three in the international front. In addition, to that the apparel business is going well around the world is that a year ago and apparel futures is down 10 quarters in a row. We are backhanded in the US and now we are back going north again, and we are very pleased with the progress that we are making in that area. In addition, we had said well over a year ago that we like to bring some excitement to the industry in footwear, and we believe that we have done that with Shotman Presto. Actually, the real challenges are obviously the challenges that I have had and those challenges will be determined AUDIO DISTURBANCE 00:02:34 when we meet those challenges and they will be determined by our management. And I would just say that in my opinion that we make considerable progress in the management front and that I will just ... we are not going into a lot of detail. I will make a couple of ... obviously one of them is Mindy Grossman who has been leading the Nike apparel charge for only the last eight months and has really made the dramatic impact in improvement there, and I believe is leading Nike for the first time to be a true apparel company as well as footwear company. That and probably most importantly that Mark Parker and Charlie Denson who are presidents for the Nike brand to people who are there in their mid forties and each of them has more than 20 years experience at Nike, and I think that truly we can qualify to lead the Nike charge into the future. So, I guess what all that is the definition of pragmatic optimism and here to give you more details is vice president and Chief Financial officer Don Blair.