NEW YORK (CNN/Money) -
Nike Inc. stock tumbled Friday after the world's biggest maker of athletic shoes reported higher earnings that narrowly missed Wall Street estimates.
Shares of Beaverton, Ore.-based Nike (NKE: Research, Estimates) sank about 5 percent in early trading on the New York Stock Exchange.
Nike said late Thursday its profits rose 18 percent in the latest quarter as higher overseas sales boosted by a weaker dollar offset tepid domestic demand.
The maker of Air Jordan sneakers and Cole Haan shoes said fiscal fourth-quarter net income rose to $246 million, or 92 cents a share, from $208 million, or 77 cents a share, a year earlier. But the results missed analysts' forecasts of 93 cents a share on average, according to First Call.
Merrill Lynch analyst Virginia Genereux cut Nike stock to "neutral" from "buy" early Friday. She said in a note to clients that the company's shares no longer are undervalued relative to the market and its excess levels of inventory were hindering growth.
Genereux also said Nike's relationship with top U.S. athletic shoe retailer Foot Locker Inc. (FL: down $0.31 to $13.19, Research, Estimates) doesn't appear to be improving in a dispute about the number of high-end Nike shoes Foot Locker sells. She said that may lead to more negative news. She also cut Foot Locker's stock to "neutral" from "buy."
-- Reuters contributed to the story
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