24/7 Wall St. » NKE

Does A Ralph Lauren Dividend Double Matter To Peers?

Administrator — Tue, 22 May 2012 12:51:45 +0000

Ralph Lauren Corporation (NYSE: RL) has what would appear to be good news in most headline watching: the high-end apparel maker is doubling its dividend. Unfortunately this is getting lost in the shuffle after its earnings report showed gains of 29%. The company has now declared a quarterly dividend of $0.40 per share, or $1.60 when you take it on an annualized basis, from its prior level of $0.20 per share per quarter. The prior rate is rounded up to 0.6% but the new rate based upon a $146.30 closing price would generate a dividend yield of 1.09%. Our aim is to see if a dividend that sounds this low really matters, and we want to see how it stacks up against large peer companies.

The dividend will be payable on July 13, 2012, to stockholders of record on June 29, 2012, with an ex-dividend date of June 27, 2012.

As far as how this dividend compares to the other large apparel makers, this is as follows: V.F. Corporation (NYSE: VFC) has close to a 2.1% dividend yield and Columbia Sportswear Company (NASDAQ: COLM) has a 1.9% yield. Having a 1% or 2% dividend might not sound huge on the surface when you consider the DJIA components and other dividend growers, but most of the large apparel companies either do not pay a dividend or they have a low yield. Accessories maker Coach, Inc. (NYSE: COH) has a 1.8% yield. Even the great sports apparel and equipment maker Nike Inc. (NYSE: NKE) pays only a 1.4% yield to investors.

Maybe a 1.1% dividend yield now isn’t so bad after all. The 5-year Treasury note pays only 0.74% and the 10-year Treasury pays 1.74% right now.

JON C. OGG

Filed under: Accounting, Apparel, Dividend, Retail, Shareholder Issues Tagged: COH, COLM, NKE, RL, VFC

The Least Powerful CEOs in America

247wallst — Wed, 02 May 2012 10:50:22 +0000

It is not unusual for large American public companies to be controlled by a founder, a founding family or a corporation that bought out the large majority of shareholders at some time in the past. In the case of all of these companies, the shareholder should not be fooled into thinking anyone other than the controlling shareholder ultimately decides who runs the company and how. The chief executives on the “Least Powerful CEOs in America” list serve at the whim of controlling shareholders, regardless of how well or how poorly they do for the company’s other shareholders.

Read The Least Powerful CEOs in America

Read The Most Powerful CEOs in America

Most of the companies with a controlling shareholder are ones in which the founder or founding family had all of the ownership before the company became public. In some cases these founders kept all voting shares for themselves at the time of the initial public offering. In other cases, they kept enough to still have much larger stakes than any other holders. The best example of the evolution from owning all of a company to owning voting control is Walmart (NYSE: WMT). Sam Walton founded the company. He kept the controlling block of shares when it went public. His family retained control after his death and still does.

The fact that a CEO can be dismissed for reasons other than performance does not appear to affect how well these chief executives do. Current Walmart CEO Michael Duke may be the worst chief executive in the retailer’s history, but so far he retains the support of the founder’s family. The Mexico bribery scandal that Walmart faces will cost shareholders money, probably in the form of large legal fees and perhaps government fines. Walmart’s stock has fallen recently due to investor concerns. Duke has been a poor steward. At the other end of the spectrum is Fabrizio Freda, who runs Estee Lauder (NYSE: EL). The company set a record for both profits and revenue last year. Shares are up 100% in just two years. Still, nothing would keep the Lauder family from dismissing Freda — should they choose to — despite those successes.

24/7 Wall St. reviewed the corporate structure, governance and voting rights of the 500 largest companies by market cap. Based on a review of company proxies, we identified those companies in which someone other than the CEO had voting control of the company. We then limited the universe to those companies with market cap in excess of $5 billion.

These are 24/7 Wall St.’s least powerful CEOs in America.

Filed under: Special Report Tagged: AMZN, DISH, EL, NFLX, NKE, SATS, SHLD, SIRI, TGT, VIA-B, WMT

Apple, Nokia, Sony Top Asian Brand List (AAPL, NOK, SNE,CL, KO, HMC, TM, GOOG, MCD, MSFT, AMZN, SSNLF, NKE, DIS, YHOO)

Paul Ausick — Fri, 20 Apr 2012 14:19:14 +0000

Among the more developed countries of Asia — China, Japan, South Korea, and Taiwan — the top global brand is Apple Inc. (NASDAQ: AAPL) in three and trails only a local brand in South Korea. In the less developed countries — India, Indonesia, Thailand, and Vietnam — the leading global brand in three is Nokia Corp. (NYSE: NOK), which is second only to Sony Corp. (NYSE: SNE) in Thailand.

The results come from a new survey of the eight countries conducted by Japan’s Nikkei BP Consulting. Other top brands in India include Colgate-Palmolive Co. (NYSE: CL) and Coca-Cola Co. (NYSE: KO). In Indonesia, Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM), and Google Inc. (NASDAQ: GOOG) are among the top five. In Thailand, McDonald’s Corp. (NYSE: MCD) joins Sony, Nokia, and Honda in the top five and in Vietnam the top global brands are Nokia, Honda, Sony, and Google.

Among more developed countries, China’s top global brands are Apple, Microsoft Corp. (NASDAQ: MSFT), Mercedes-Benz, BMW, and Nokia. In Japan, the top five includes Apple, Google, Sony, and Amazon.com Inc. (NASDAQ: AMZN). South Korea’s top five includes Apple, Samsung (OTC: SSNLF.PK), and Nike Inc. (NYSE: NKE). The Taiwanese list includes Apple, Sony, HTC Corp., Google, and Walt Disney Inc. (NYSE: DIS). Yahoo! Inc. shows up in the top ten brands in Japan and Taiwan, but in no other countries.

Some observations:

Apple is pretty clearly the leading global brand among the more developed countries, although it does not appear among the top ten in the less-developed nations. The issue is whether or not Apple will try to change that by attacking the Indian and Indonesian markets.
Nokia may be struggling, but the company’s brand power in India and Indonesia, each with a population of more than 1 billion people, suggests that if the Finnish giant can deliver a low-priced smartphone it has a chance to make a big noise in the industry again.
No US carmaker is among the top ten brands in any of the eight countries. Not a good sign.
Google does not appear among the top ten brands in China. The company’s troubles with the government have had a punishing effect, and Google may end up writing off China.
Sony, another company suffering from a variety of ills, continues to be included in the top 10 in 7 of the 8 countries surveyed (only South Korea leaves Sony out). For Sony that could mean that it might have to consider moving its brand down the scale a bit to take advantage of its strength in the less-developed nations.
Yahoo’s strength in Japan is well-established and may be the most valuable asset the struggling company has.
The top brands in China include luxury brands like Mercedes and BMW, probably a sign of aspirational consumption as much as the reality of daily life in China. What the inclusion could mean is that other luxury brands could do well, but at the cost of reducing margins in order to grow brand power.

The full study is available here.

Paul Ausick

Filed under: China, Consumer Electronics, Consumer Goods, Emerging Markets, International Markets, Research Tagged: AAPL, AMZN, CL, DIS, GOOG, HMC, KO, MCD, MSFT, NKE, NOK, SNE, SSNLF, TM, YHOO

Tebowmania Report: Nike Sues Reebok over Gear (NKE, ADDYY)

Paul Ausick — Thu, 29 Mar 2012 11:51:52 +0000

NFL quarterback Tim Tebow hasn’t been a New York Jet for even a month yet, but that doesn’t mean he can’t be the center of a big controversy. The first appears to be a lawsuit filed in Manhattan’s federal court by Nike Inc. (NYSE: NKE) against Reebok, which is owned by Adidas AG (OTC: ADDYY.PK).

Reebok’s license with the NFL Player’s Association ended in February. The company’s license with the NFL ends this month. Nike has replaced Reebok as the official NFL gear maker. Thus the suit.

According to the New York Post:

According to court papers, Reebok is “in the process of shipping large volumes of Tebow-identified apparel products” that are expected to hit stores this week.

“The opportunity to sell the first Tebow-identified Jets apparel is a unique and short-lived opportunity,” the suit says.

“It is unlikely that a consumer who purchases an unauthorized Tebow-identified NFL jersey or T-shirt from Reebok will purchase an authorized Tebow jersey or T-shirt from Nike the following week.”

Stay tuned. Tebowmania is just catching on in New York.

Filed under: Law, Retail Tagged: ADDYY, NKE

What’s Important in the Financial World (3/26/2012) Gas Nears $4, Tiger Woods Endorsements

247wallst — Mon, 26 Mar 2012 10:33:30 +0000

It does not matter whether gasoline prices are measured by AAA Fuel Gauge or the carefully watched Lundberg Survey, the trend is clear. The average price for regular gasoline increased 11.49 cents to $3.9297 a gallon, according to Lundberg. That figure is based on a two-week survey for the period that ended on March 23. The AAA number for regular is $3.897 as of yesterday, up from $3.894 the day before and $3.674 a month ago. The persistent question that no one can answer with accuracy is when most Americans will sharply curtail their consumer spending because of gas prices. It is almost certain that the lower classes, and some part of the middle class, have cut back if they have to drive any great distance. Several consumer confidence numbers will be out this week that should show the trend.

No Love for Windows Mobile

Microsoft (NASDAQ: MSFT) has faced headwinds in its efforts to get app developers to build products for its Windows Mobile OS. Most developers continue to focus on apps that run on Apple’s (NASDAQ: AAPL) iPhones and iPads. These developers have been attracted to a lesser extent by the immensely popular Google (NASDAQ: GOOG) Android platform. The Microsoft problem extends to Nokia (NYSE: NOK), which has decided to launch a number of phones in a joint venture with Microsoft. Microsoft and Nokia have decided to make an investment in the app market, but it is very small. According to Slash Gear:

Microsoft and Nokia have jointly committed up to €18m ($24m) to train and support app developers as part of the new AppCampus program, though the cash will go to Symbian and S40 coders as well as Windows Phone. The new fund will support the freshly established mobile application development program at Aalto University in Finland, “to create a new generation of self-sustaining mobile startups” as well as ensuring that Windows Phone and the other platforms hopefully don’t go without key titles in future.

That is a pittance compared to what it will take to get the worldwide development community to build apps for a mobile OS that has had little adoption.

Tiger Woods Endorsements

Who will be Tiger Woods’s new endorsement partners now that he has won his first tournament in more than two years and is the new favorite for the Masters? He crushed the field at Arnold Palmer’s tournament and received huge amount of what sponsors want — TV time on a major network. Accenture (NYSE: ACN) and Tag Hauser abandoned Woods after his personal scandal. Nike (NYSE: NKE) did not. Woods signed an endorsement deal with Rolex last November. Consumer products companies, which would include telecom companies like Verizon (NYSE: VZ) and probably a car company, will want their names on Tiger’s bag. It will not be long before his endorsement levels return to where they were before 2009.

Supreme Court Mulls Obamacare

The Supreme Court will begin to hear arguments over the constitutionality of the Obama health care law. The single most important section of the law involves the mandate that Americans must carry health insurance or pay a fee. If the court should throw out the entire law, there will be a tremendous scramble among the major “shareholders” in the health care industry — doctors, hospitals, drug makers and insurance companies — to undo many of their plans based on the Obama initiative. These parties have until the end of June, probably, to prepare for what could be another sea change in the American health care system.

Douglas A. McIntyre

Filed under: Market Open Tagged: AAPL, ACN, GOOG, MSFT, NKE, VZ

Nike Earnings Just Did It (NKE)

Administrator — Thu, 22 Mar 2012 20:27:06 +0000

Nike Inc. (NYSE: NKE) has now reported its earnings of $1.20 earnings per share and $5.8 billion in sales. The footwear and apparel giant had estimates from Thomson Reuters of $1.16 EPS on $5.8 billion in revenues. The company is also targeting worldwide futures orders being up 15%, or up 18% if you account for forex.

The company described the current environment as remaining volatile but optimistic. As of the end of the quarter, Nike Brand’s worldwide futures orders scheduled for delivery from March through July 2012 came to a rise of about 15% to a total of $9.4 billion.

Gross margin fell 2 full points down to 43.8% due “primarily to higher product costs, which more than offset the positive effects of price increases, growing sales in our Direct to Consumer operations, and ongoing product cost reduction initiatives.”

Inventories were up big by 32% to about $3.4 billion, but about 20-points of the increase in NIKE Brand inventories was “due to significantly higher product input costs and changes in product mix.” Nike spent $239 million buying back stock in the quarter and it has remaining about $1.1 billion of its total $5 billion share buyback plan available.

Shares closed up $0.55 at $110.99 and the 52-week trading range is $75.62 to $112.97. Shares are indicated up less than $1.00 around $112.00 in the after-hours reaction. Without guidance being offered for the quarter or the year, we would consider this unfinished or incomplete.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Apparel, Earnings, Retail Tagged: NKE

Will Lululemon Outshine Nike on Earnings? (LULU, NKE)

Administrator — Mon, 19 Mar 2012 17:50:52 +0000

This Thursday will bring earnings reports from both Lululemon Athletica Inc. (NASDAQ: LULU) and Nike Inc. (NYSE: NKE). Nike is a far larger company and far more important in the world of finance when it comes to peers, but Lululemon has a much more volatile history around earnings with large moves that attract traders. Lululemon is now within 2% of its all-time just hit last week and it has a market value of $10.5 billion. Nike hit yet another all-time high of $112.50 on Monday and its market value is over $51 billion.

Lululemon Athletica has estimates from Thomson Reuters of $0.49 EPS on $362.37 million in revenues; next quarter estimates are $0.30 EPS on $257.07 million in revenues. For the year January 2013, estimates are $1.60 EPS on $1.31 billion in revenues. Lulu hit a new high of $74.50 on Friday and the consensus analyst target is $67.94. Nike has estimates from Thomson Reuters of $1.16 EPS on $5.8 billion in revenues. The coming quarter is expected to be $1.41 EPS on $6.59 billion in sales. Analysts have a consensus target of $112.69 for Nike.

Nike often beats earnings, but on a predictable basis. It also had wide currency fluctuations. Lululemon has not been as predictable on just how much it can beat earnings or raise guidance of late, but you wouldn’t know it with a fresh all-time high. It seems like an easy observation to say that both companies will need to do very well when they report earnings on Thursday to keep profit takers from lightening up in these shares.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Apparel, Earnings Tagged: LULU, NKE

Earning Previews: Nike Versus Lululemon (NKE, LULU)

Administrator — Fri, 16 Mar 2012 16:09:59 +0000

This coming Thursday should be an interesting earnings day as we have earnings due from both Nike Inc. (NYSE: NKE) and Lululemon Athletica Inc. (NASDAQ: LULU). Nike is far larger with a $51 billion market cap and shares at an all-time high. Lululemon has been on fire after hitting a new all-time high on Friday with a market cap of nearly $10.5 billion.

Nike has estimates from Thomson Reuters of $1.16 EPS on $5.8 billion in revenues. The coming quarter is expected to be $1.41 EPS on $6.59 billion in sales. Shares appear to have hit a new all-time high of $111.78 on Friday. Analysts have a consensus target of $111.60 for Nike.

Both companies are going to need to do very well in their earnings reports if they want their shares to continue running higher.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Apparel, Earnings Tagged: LULU, NKE

24/7 Wall St. Closing Bell (XOM, NKE, POT, TSLA, AMGN, RRC, AXE, ARMH, CE, LLY, HP, LLL, MHP, MAT, PFE, VLO, VRNG, RSH, PAY, REE, FFN)

Paul Ausick — Tue, 31 Jan 2012 21:06:33 +0000

All three major indexes opened higher this morning, but the strength didn’t last as the Chicago PMI number failed to meet expectations and came in lower even than last month’s reading. The lower reading on consumer confidence also supported sellers this morning. Nothing of note was concluded on the Greek debt swap, so that had little effect on the market one way or the other. Oil major Exxon Mobil Corp. (NYSE: XOM) reported earnings in-line with expectations, that wasn’t good enough for investors today (our coverage here). Crude oil is mixed today, with WTI crude down -0.32% at $98.46/barrel and Brent crude higher by 0.31% at $111.09/barrel. Gold closed today at $1,738.10/ounce, having gained 11% this month (our view here).

The unofficial closing bells put the DJIA down nearly 21 points to 12,632.91 (-0.16%), the NASDAQ rose nearly 2 points (0.07%) to 2,813.84, and the S&P 500 fell -0.05% or less than 1 point to 1,312.40.

There were several analyst upgrades and downgrades today, including Nike Inc. (NYSE: NKE) raised to ‘buy’ at Argus; Potash Corp. of Saskatchewan (NYSE: POT) cut to ‘neutral’ at Goldman Sachs; Tesla Motors Inc. (NASDAQ: TSLA) started as ‘buy’ at Jefferies; Amgen Inc. (NASDAQ: AMGN) reiterated as ‘buy’ and target price raised to $80 at Argus; and Range Resources Corp. (NYSE: RRC) raised to ‘hold’ from ‘sell’ with a target price of $59 at Canaccord Genuity.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Anixter Inc. (NYSE: AXE) is down -3.7% at $65.25; ARM Holdings PLC (NASDAQ: ARMH) is up 1.7% at $28.84; Celanese Corp. (NYSE: CE) is down -0.95% at $48.84; Eli Lilly & Co. (NYSE: LLY) is up 1.35% at $39.78; Exxon Mobil is down -1.98% at $83.80; Helmerich & Payne Inc. (NYSE: HP) is up 2.2% at $61.64; L-3 Communications Holdings Inc. (NYSE: LLL) is up 1.3% at $70.49; McGraw-Hill Cos. Inc. (NYSE: MHP) is down -0.5% at $46.09; Mattel Inc. (NYSE: MAT) is up 5.1% at $31.04 after posting a new 52-week high today of $31.49; Pfizer Inc. (NYSE: PFE) is down -0.8% at $21.42; and Valero Energy Corp. (NYSE: VLO) is down -0.73% at $24.10.

Other standouts from today include the following stocks:

Vringo Inc. (NASDAQ: VRNG) is up nearly 21% at $1.40. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

RadioShack Corp. (NYSE: RSH) is down nearly -30% at $7.19 after setting a new 52-week low of $7.15 earlier today. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

Verifone Systems Inc. (NYSE: PAY) is up more than 8% at $42.61. The payment systems maker is getting a boost from a plan by Mastercard Inc. (NYSE: MA) to subsidize the installation of new card readers that use a microchip rather than a magnetic stripe to store customer information.

Rare Element Resources Ltd. (AMEX: REE) is up more than 17% at $7.22. The rare earth minerals miner is likely gaining after a ruling from the WTO that China’s restriction on rare earth minerals’ exports violates global trade rules.

FriendFinder Networks Inc. (NASDAQ: FFN) is up about 19% at $1.26. The adult social media company is likely also being bought up on the prospective Facebook IPO.

Stay tuned for Wednesday. Automakers will be releasing sales figures for January throughout the day. We have noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
7:30 a.m. – Challenger Job-cut data
8:15 a.m. – ADP employment report
10:00 a.m. – ISM manufacturing index
10:00 a.m. – Construction spending
10:30 a.m. – EIA weekly petroleum status report

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: AMGN, ARMH, AXE, CE, FFN, HP, LLL, LLY, MAT, MHP, NKE, PAY, PFE, POT, REE, RRC, RSH, TSLA, VLO, VRNG, XOM

Top Analyst Upgrades & Downgrades (AMGN, AON, EQT, EXEL, IPI, ERIC, MDVN, NKE, NIHD, NYX, POT, RAX, RRC, SYMC, TSLA, UA, UNH)

Administrator — Tue, 31 Jan 2012 13:27:50 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Tuesday morning.

Amgen Inc. (NASDAQ: AMGN) Reiterated Buy and Raised target to $80 at Argus.
AON Corporation (NYSE: AON) Raised to Neutral from Underperform at Credit Suisse.
EQT Corporation (NYSE: EQT) Raised to Hold from Sell with $50 target at Canaccord Genuity.
Exelixis, Inc. (NASDAQ: EXEL) Started as Outperform at Credit Suisse.
Intrepid Potash (NYSE: IPI) Cut to Sell at Goldman Sachs.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Maintained Buy but target now at $14 from $19 at Argus.
Medivation, Inc. (NASDAQ: MDVN) Started as Outperform at Credit Suisse.
Nike Inc. (NYSE: NKE) Raised to Buy at Argus.
NII Holdings, Inc. (NASDAQ: NIHD) named as Bear of the Day at Zacks.
NYSE Euronext (NYSE: NYX) Cut to Sector Perform at RBC Capital.
Potash Corp. of Saskatchewan (NYSE: POT) Cut to Neutral at Goldman Sachs.
Rackspace Hosting Inc. (NYSE: RAX) named Momentum stock of the day at Zacks.
Range Resources Corporation (NYSE: RRC) Raised to Hold from Sell with $59 target at Canaccord Genuity.
Symantec Corporation (NASDAQ: SYMC) Reiterated Buy and $24.00 price target at Argus.
Tesla Motors, Inc. (NASDAQ: TSLA) Started as Buy at Jefferies.
Under Armour, Inc. (NYSE: UA) Raised to Buy at Needham.
UnitedHealth Group (NYSE: UNH) named as Bull of the Day at Zacks.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: AMGN, AON, EQT, ERIC, EXEL, IPI, MDVN, NIHD, NKE, NYX, POT, RAX, RRC, SYMC, TSLA, UA, UNH