Nike Earnings Call: Sponsor Keeps Silent on Tiger's Return
The third quarter earnings call, after market close, was all business: The world's largest apparel and shoemaker reported 9% growth in future orders, 7% increase in revenues and a sky-high stock price. Nike executives took a limited numbers of calls and kept the questions focused on quarterly earnings, without mentioning Woods even once.
The absence was notable considering that, in the last 24 hours, just about every news outlet and retail analyst has weighed in on what Woods's return means to golf and his sponsors.
Nike is one of a handful of big-name sponsors that has not turned its back on Woods following revelations about his marital improprieties. Reports put Nike's endorsement deal with the golfer at $100 million.
Brian Sozzi, a retail sector analyst at Wall Street Strategies, draws a direct connection between Nike's decision to stick with Woods and its positive earnings and near 52-week high stock price.
"Tiger is golf and, over the next 10 years, he will continue to be golf," Sozzi said. "There's a good financial reason that you want your product associated with one of the greatest athletes of our time."
Over the last four months, numerous sponsors have dropped Woods, including Accenture (ACN) and PepsiCo's (PEP) Gatorade. Aside from Nike, remaining Woods sponsors include Electronic Arts (ERTS) and Gillette, which didn't officially drop Woods, but excluded him from its advertising.
Meanwhile, Electronic Arts said in a written statement that it's looking forward to seeing Woods return to golf. The timing couldn't be better for the game maker, which is scheduled to release its "Tiger Woods PGA Tour" this summer.
Nike (NKE) stock, which grew in after-hours trading following the earnings announcement, is up 7 percent so far this year.