SHARES tumbled across the US athletic sportswear sector yesterday after Nike, the world's largest sports shoe manufacturer, saw its shares fall about 14 per cent in early trading after a profits warning.
Nike, based in Oregon, said earnings for its current financial quarter, which runs to the end of this month, would be between 51 and 56 cents per share - far below analysts' expectations.
By midday, its shares were down $8.75 (£5.79) at $55. The Nike announcement helped Reebok to fall $1.37 to $39.86, and Converse 60 cents to $20.60, while Woolworth, which owns Foot Locker, one of the largest sports shoe retailers, fell $1 to $23.50.
Nike blamed a range of factors, with a onetime $18 million charge for closing a US factory accounting for a drop of four cents in earnings per share. The bulk of the shortfall is attributable to bower revenues.
Attention was drawn in particular to Nike's admission that cancellations of orders by US retailers had risen.
Ms Shelly Hale Young, a senior analyst with Hambrecht & Quist, the San Francisco based investment bank, said: "Nike is coming off a phenomenal year of unnatural and unsustainable growth and there had to be a slowdown. It's just coming much more rapidly and it's more dramatic than investors had believed."
Nike's earnings for the quarter ending in November last year had shown an 81 per cent rise over the same quarter of 1995, and orders for the first quarter of this year were 54 per cent higher than for the same quarter of 1996.
