Nike Seen Having Lower Earnings
BOSTON, Sept 13 (Reuter) - Earnings for Nike Inc appear to be stumbling, according to U.S. News & World Report, and a movie mentioning the footwear giant is expected only to add to the company's woes.
The weekly magazine, which goes on sale Monday, says analysts believe sales of the Beaverton, Oregon-based firm's products in the United States were flat over the summer "a big change from the red-hot 36 percent increases of Nike's 1997 fiscal year, which ended May 31."
Nike's quarterly earnings are due out on Thursday.
Shelly Hale Young, an analyst with San Francisco-based broker Hambrecht & Quist, told the magazine that over the long term Nike would settle down to a consistent 10 percent to 15 percent growth but it would take at least two more quarters of disappointing earnings before the stock recovered.
"The stock will be under pressure for the next six months," Young told U.S. News. He downgraded Nike to a "hold" from a "buy" earlier this year.
Now, Miramax Films has decided to distribute a movie assaulting corporate America by irreverent director Michael Moore called "The Big One," according to the magazine.
In the film, by the man whose 1989 documentary "Roger and Me" caused some woes for General Motors chairman Roger Smith, Moore asks Nike chairman Philip Knight if he would move Nike's shoe production from Asia, where the company has come under fire for low wages and harsh working conditions, to Flint, Michigan, the director's hometown.
Knight responds that Americans simply do not want to work in shoe factories, the newsweekly said.
After Knight's remarks the camera cuts to a group of unemployed people in Flint chanting, "We need jobs. We need jobs."
A young man holds up his small son, who is wearing Nike's Air Jordans that retail for about $100, and tells the camera: "You best believe" he would be willing to help make them.
14:15 09-13-97 Reuters