Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Nike shares drop on price hike plan

Nike shares declined more than 9% on Friday.Click chart to track Nike shares. By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- Nike shares took a drubbing in early trading Friday after the athletic wear maker's executives said they would raise prices across the board in response to increased costs.

The comments came during a conference call after the market closed Thursday in which the company announced earnings per share of $1.08 on revenue of $5.1 billion in the third quarter, slightly lower figures than analysts had anticipated.

Coupled with revelations of rising costs and prices, the news sent shares down more than 9% to $77.13, a sharp decrease from Thursday's close of $85.41.

Nike (NKE, Fortune 500) CFO Don Blair said the company was already fighting higher costs in the third quarter, with specific input costs of oil, cotton and labor leading the way. The company was also paying more than usual for air freight due to high demand for some of its shoe products.

That means narrowing margins for Nike, a prospect Blair said would require higher prices.

"Beginning in spring 2012, we'll take more significant price increases across a broader range of styles," he told analysts and reporters.

Turmoil in Japan will also present problems for the athletic apparel manufacturer. The company reported Thursday that revenue declined 16% in the third quarter in Japan.

"Japan was a challenging business environment even before the catastrophic events of last week," Blair said, noting the disaster will impact Nike's business in the country moving forward.

"It's too early to fully assess the financial impact of these ongoing events on our business, but we do anticipate there will be a negative impact on our revenues and profits for this geography," he said. To top of page

Index Last Change % Change
Dow 16,204.97 -211.61 -1.29%
Nasdaq 4,363.14 -146.41 -3.25%
S&P 500 1,880.05 -35.40 -1.85%
Treasuries 1.85 -0.02 -0.86%
Data as of 11:06pm ET
Company Price Change % Change
Bank of America Corp... 12.95 -0.30 -2.26%
Facebook Inc 104.07 -6.42 -5.81%
Freeport-McMoRan Inc... 5.68 -0.04 -0.70%
Microsoft Corp 50.16 -1.84 -3.54%
General Electric Co 28.54 -0.64 -2.19%
Data as of Feb 5

Sections

The economy is better than it was, but not even President Obama is ready to declare it's booming. More

Laurie Segall sits down with Foursquare's new CEO Jeff Glueck to discuss the company's latest round of funding at a lower valuation, and their hybrid consumer/enterprise business model. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

Portland, Oregon, is often described as the last affordable cool city on the West Coast. But as more people move to the city, it's becoming increasingly unaffordable. More