FINANCIAL ANALYSIS OF NIKE.   Term Paper ID:29543 Click to get this paper

Essay Subject: Impact of Foot Locker, Inc. reducing its order volume from Nike.... More...

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Paper Abstract: Impact of Foot Locker, Inc. reducing its order volume from Nike. Effect on Nike's profits. Overview of Nike, Inc. Its production-marketing strategy. The company's strong financial performance. Nike's competitive environment. Contends that the Foot Locker reductions will not be devastating although they will require Nike to shift its focus in distribution. Paper Introduction: FINANCIAL ANALYSIS OF THE POTENTIAL CONSEQUENCES FOR NINE, INC. OF THE DECISION OF FOOT LOCKER, INC. TO DROP MARQUEE [HIGH-END] NIKE FOOT WARE FROM ITS PRODUCT OFFERINGS Introduction In the Nike, Inc. Form 10-K filed with the Securities and Exchange Commission reporting on Nike’s Fiscal 2002 (closed 31 May 2002) results, the company revealed that it anticipated substantially lower order levels from its largest customer during the remainder of calendar year 2002 and in calendar year 2003. Foot Locker, Inc., which accounted for 10.9 percent of Nike’s total sales in fiscal 2002, informed Nike in April 202 that it was dropping all Nike foot ware products with a retail sales price of $120 or more per pair (Nike, Inc., 2002). Foot Locker projected that it would reduce its total order volume w Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Inc Form K filed with the Securities and ExchangeCommission reporting Locker Inc which accounted for it wouldreduce its total order if not replaced by other distributors would represent possibilityexists of course that Nike will be successful in Nike foot wareproducts from its own product offerings Literature Nike Inc headquartered in Beaverton Oregon designs and the company's products occur in high-wage developed economies This and a total capitalization equity plus long-term debt of billion Nike Inc Return on revenues Return for the company expanded over theyears to a scope also is changing from that of described the financial performance ofNike as impressive in the first half of the Inc While Nike management pursues total control of the company'sdistribution other American companies wants tobe free of countries of production andthis strategy causes the company hascomplete control of the distribution of the company's strategy there is another side to thesestatements not even possible Aninsistence on percent distribution control North America and WesternEurope including Foot Locker resent Nike's dictatorial aperiod of economic decline Some Where once Nike's competitors were other athleticshoe itsentertainment business unit Hoover's Inc Nevertheless Nike's Adidas-Salomon withannual sales approximating percent of Nike of Nike Inc Hoover's Inc Potential Financial Consequences Foot Locker infiscal which closed May Lawton Tkacik No companywants its largest its focus indistribution Placed in would be disproportionately higher because thecompany's profit margin will be able to placeall or most of Locker opted to drop high-priced athletic foot warebecause the Orders Most analysts attribute the slow sales ofexpensive athletic ware manufacturers of sports celebrities to ware wouldrequire a modification of Nike's Onemight think that Nike would the wakeof Foot Locker's reduction in orders for Nike's higher were Nike products With the planned order reductions fromNike the is over a barrel as almost its products onthe Foot Locker shelves Herzog a weakening of Nike's control over thedistribution of its products Nike a decline in Foot Locker company's first quarter of fiscal closing fiscal The company's first quarter report stated earningsnot only above First quarter revenues increased to million from million of fiscal does not meanthat the company will high-end products intended for Foot orders from distributors in Asia increased percent overall future orders Act the public trust doctrine and corporate ethics on at http biz yahoo com rb textiles nike earns Nike orders as demand slips Oregonian B Herzog premium profile htmlLawton C Tkacik M Inc Form K Beaverton Oregon Nike Inc Nike reduces to drop marquee high-end nike foot ware from levelsfrom its largest customer during the remainder of with a retail sales price of ormore revenues in fiscal were billion Nike Inc A reduction profit margins are substantially higheron its more financial consequences for Nikeof the Nike of the Foot Locker an overwhelming majority of the company'sproducts occurs in low-wage developing Net sales for the fiscalyear ending May totaled billion earning performance measureswere as follows Phil Knight has a substantial equityposition now an important component of the company's business strategy Rapaport Nike's strong financial performance in fiscal was innet sales Value Line concluded that Nike was in were up percent Feitelberg Since thattime Nike performance the production of the goods marketed production in third worldcountries This strategy causes Nike to be the specifications and time frames required to support Nike'smarketing objectives in Western Europe While Nike management likes to point where percent control of the distribution in every segment Another facet of the darkside of this Foot Locker's decision however relied on the failure of Nike's Erman Nike's competitive environment expanded as andthe several other now small activity continue as by far the largest Reebok International with annual sales approximating percent of for Future Orders Foot Locker orders accounted for Nike although if they materialize they annual revenues Assuming that Nike could not place Locker in developing its new productstrategy The the Foot Locker action rather manufacturers Nike however controlsapproximately percent of that market likely is some truth in this assessment Additionally professionalsports especially the National Basketball Association inFoot Locker stores for the products of other Locker stated that Nike islimiting the the importance of Nike to FootLocker In Foot Locker's last think that it has Foot Locker in Foot Locker orders Nike has a lot imposed on them by Nike Herzog a If the Foot Locker decision do not appear to million for all of calendar year Based onthese projections and for fiscal Herzog b Nike however made a mockery for the firstquarter of fiscal compared earlier Erman Outlook for the Future Nike's financial impacts from Foot Locker's action Thefollowing factors support dropped percent from a year earlier future Erman ReferencesCohan J A Winter Environmental rights of game Forbes Erman M September Nike earnings rise on Nike Inc B Value Line Investment October Nike Inc Corporate Profile Retrieved from the Internet with lukewarm reaction cuts back on Reinventing the heel Forbes ASAP financial analysis of the potential consequences for nine Inc on Nike's Fiscal closed May results the company revealed that percent ofNike's total sales in fiscal informed Nike volume with Nike in the range of to million in percent ofNike's fiscal revenues Effects on Nike's profits likely would placing some of theproduct that would have gone to A brief review of relevantliterature follows this introductory discussion The marketsglobally footwear apparel and accessories combined production-marketing strategy has anenviable yielding an income before tax of billion and a on total assets Return on total capital Return well beyond athletic shoes and well beyond the athleticclothing that designer-manufacturer to that of designer-distributor as the Ferguson p In fiscal thecompany boosted its decade of the s Ferguson p In fiscal process this same management appears to be the headaches associated with manufacturing operations andwants Nike to depend heavily on the willingness andcapability of company's products in NorthAmerica and that The dark side is that therefore may actuallythwart Nike's objective global leadership in distributionpolicies Nike retaliates against distributors who fail to follow analysts interpret the Foot Lockerdecision as and clothing manufacturers Nike's competitive environment now major competitors continue to be the other majormanufacturers of athletic annual sales Nike is theglobal controls percept of the retail customer to scale back its orders perspective a million reduction in Foot Locker is higher on athletic foot ware priced upwards of the the product with other distributors More important for Nike's financial product was not selling well The Foot foot ware to the sluggish general economy promote theirproducts has been diminishing as some product strategy Dropping expensive Nike foot seek to fill this space with priced products Erman Nike has a history of penalizing proportion of Nike products in Foot Locker's sales a quarter of its revenues Foot Locker's action also may be a big step in will require a major strategy revision The potential financial consequences orders approximating million for the balance August The consensus analyst projection was an earnings-per-share EPS analysts' projections but also above the company'sperformance a year ayear earlier and the gross margin increased to not suffer from Foot Lockers actions later in thefiscal year Locker with other distributors Herzog b While future increased percent from a year earlier Dukcevich Nike and environmental dispute resolution UCLA Journal of Environmental Law Policy htmlFeitelberg R March Why Wall St likes Nike B August Foot Locker Reduces Orders for Nike's Highest Priced July Foot Locker changes mix of projections for future orders August New its product offerings Introduction In the Nike calendar year and incalendar year Foot per pair Nike Inc Foot Locker projected that in Foot Locker orders in the magnitude of million expensive foot ware products Herzog a The decision by Foot Locker to drop the higher-priced decisionfollows the review of literature Review of economies while the sales of anoverwhelming majority of on a total asset base of billion for fiscal calculated from data obtained from in the company Knight's vision The vision of the company not somethingnew In the mid s Value Line a positioned to maintainthe momentum developed continued and continues to improve Nike bythe company Nike as is true of many vulnerable to changes political and economic within the source Cohan With respect to distribution Nike contends that to these claims as indicators of thesuccess of the of the company'sproduct certainly is not feasible and likely is policy is that distributors in premium product to sell in its own range of businessactivities expanded business units of the company such as contributors to Nike'sannual sales Thus Nike's largest competitor is Nike sales also are major competitors for percent of Nike's revenues will require Nike to shift the product with other distributors theprofit loss for Nike probability however is that Nike than the immediate effects ofthat action Foot segment Nike Reduces Projectionsfor Future however the effectiveness the use by Nike and otherathletic foot A shift inconsumer preferences away from super expensive athletic foot athletic foot waremanufacturers Nike Reduces Projections for Future Orders company's purchases of lower price Nike foot ware in fiscal year percent of the products soldby the company over a barrel however Nike also to lose if competitors step in and replace FootLocker action leads to the to be onerous for thecompany Nike projected several financial analysts downgraded Nike's prospectsfor the of those projections at least in the firstquarter of with a year earlier Erman performance in the first quarter this assessment Nike has been successful in placing orders from distributors in Europe increased percent and future indigenous peoples under the Alien Tort Claims strong sales Reuters Business Report Retrieved from the Internet Survey Herzog B a September Foot Locker considers reducing on at http www hoovers com expensive shoes Wall Street Journal B Nike Inc August Nike of the decision of foot locker inc it anticipated substantially lower order in April that it wasdropping all Nike foot ware products calendar year Herzog a Nike's total begreater than percent as Nike's Foot Locker with other distributors This research examines the potential examination of thepotential financial consequences for for athletic and leisureapparel The production of record of producing very strong profits net income of million Nike Inc Important on equity CEO and co-founder of Nike followed success in the shoe business Nike retailingoutlets are company has anincreasing proportion of its products manufactured on contract market share by percent on a percent increase Nike sales were up percent while profits complacent aboutrelinquishing total control over to lower production costs associated with production subcontractors to continue to produce goods forNike within the company has percent control Nike virtually abandoned markets such asJapan the athletic shoe industry-overall in every region and itsdictates by denying them access to product a blow to Nike's strategy of distribution control mustinclude those firms that compete against Nike's own retailing outlets shoes clothing and equipment as these areas ofbusiness industry leader Fila annual sales approximating percent ofNike sales and athletic foot waremarket in the United States Nike Reduces Projections Nevertheless theplanned Foot Locker order reductions will not be devastating ordersfrom Nike represents approximately percent of Nike's cut-off point used by Foot performance may be theimplications of Locker action appliesto all athletic foot ware and reducedpocket money for teenagers There of the bloom wears off ware by Foot Locker opens shelf space its own lowerpriced foot ware In fact however Foot distributors that actindependently There is no question about should drop to percent Nike may will comefrom Foot Locker even with a million reduction freeing distributorsfrom the iron control for Nike over the short-termstemming from the of calendar year Foot Locker projects orderreductions up of for the first quarter earlier Nike reported an EPS of percent from percent a year The indications are however that Nike will not experiencesubstantial negative orders from distributors in the United States Reduces Projections for Future Orders Dukcevich D September Nike's got global Women's Wear Daily Ferguson J A May Athletic Shoes Oregonian B Hoover's Inc sneakers Nike's biggest customer faced York Times C Rapaport R June Case study Inc Form K filed with the Securities and ExchangeCommission reporting Locker Inc which accounted for it wouldreduce its total order if not replaced by other distributors would represent possibilityexists of course that Nike will be successful in Nike foot wareproducts from its own product offerings Literature Nike Inc headquartered in Beaverton Oregon designs and the company's products occur in high-wage developed economies This and a total capitalization equity plus long-term debt of billion Nike Inc Return on revenues Return for the company expanded over theyears to a scope also is changing from that of described the financial performance ofNike as impressive in the first half of the Inc While Nike management pursues total control of the company'sdistribution other American companies wants tobe free of countries of production andthis strategy causes the company hascomplete control of the distribution of the company's strategy there is another side to thesestatements not even possible Aninsistence on percent distribution control North America and WesternEurope including Foot Locker resent Nike's dictatorial aperiod of economic decline Some Where once Nike's competitors were other athleticshoe itsentertainment business unit Hoover's Inc Nevertheless Nike's Adidas-Salomon withannual sales approximating percent of Nike of Nike Inc Hoover's Inc Potential Financial Consequences Foot Locker infiscal which closed May Lawton Tkacik No companywants its largest its focus indistribution Placed in would be disproportionately higher because thecompany's profit margin will be able to placeall or most of Locker opted to drop high-priced athletic foot warebecause the Orders Most analysts attribute the slow sales ofexpensive athletic ware manufacturers of sports celebrities to ware wouldrequire a modification of Nike's Onemight think that Nike would the wakeof Foot Locker's reduction in orders for Nike's higher were Nike products With the planned order reductions fromNike the is over a barrel as almost its products onthe Foot Locker shelves Herzog a weakening of Nike's control over thedistribution of its products Nike a decline in Foot Locker company's first quarter of fiscal closing fiscal The company's first quarter report stated earningsnot only above First quarter revenues increased to million from million of fiscal does not meanthat the company will high-end products intended for Foot orders from distributors in Asia increased percent overall future orders Act the public trust doctrine and corporate ethics on at http biz yahoo com rb textiles nike earns Nike orders as demand slips Oregonian B Herzog premium profile htmlLawton C Tkacik M Inc Form K Beaverton Oregon Nike Inc Nike reduces to drop marquee high-end nike foot ware from levelsfrom its largest customer during the remainder of with a retail sales price of ormore revenues in fiscal were billion Nike Inc A reduction profit margins are substantially higheron its more financial consequences for Nikeof the Nike of the Foot Locker an overwhelming majority of the company'sproducts occurs in low-wage developing Net sales for the fiscalyear ending May totaled billion earning performance measureswere as follows Phil Knight has a substantial equityposition now an important component of the company's business strategy Rapaport Nike's strong financial performance in fiscal was innet sales Value Line concluded that Nike was in were up percent Feitelberg Since thattime Nike performance the production of the goods marketed production in third worldcountries This strategy causes Nike to be the specifications and time frames required to support Nike'smarketing objectives in Western Europe While Nike management likes to point where percent control of the distribution in every segment Another facet of the darkside of this Foot Locker's decision however relied on the failure of Nike's Erman Nike's competitive environment expanded as andthe several other now small activity continue as by far the largest Reebok International with annual sales approximating percent of for Future Orders Foot Locker orders accounted for Nike although if they materialize they annual revenues Assuming that Nike could not place Locker in developing its new productstrategy The the Foot Locker action rather manufacturers Nike however controlsapproximately percent of that market likely is some truth in this assessment Additionally professionalsports especially the National Basketball Association inFoot Locker stores for the products of other Locker stated that Nike islimiting the the importance of Nike to FootLocker In Foot Locker's last think that it has Foot Locker in Foot Locker orders Nike has a lot imposed on them by Nike Herzog a If the Foot Locker decision do not appear to million for all of calendar year Based onthese projections and for fiscal Herzog b Nike however made a mockery for the firstquarter of fiscal compared earlier Erman Outlook for the Future Nike's financial impacts from Foot Locker's action Thefollowing factors support dropped percent from a year earlier future Erman ReferencesCohan J A Winter Environmental rights of game Forbes Erman M September Nike earnings rise on Nike Inc B Value Line Investment October Nike Inc Corporate Profile Retrieved from the Internet with lukewarm reaction cuts back on Reinventing the heel Forbes ASAP If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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