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Business as usual was anything but the case for Nike Golf in its recent fiscal year. Nike Inc (NKE: NYSE) reported its year-end numbers and for the golf division it proved that what you see isn’t always what you get.
In large part Tiger Woods has been the face of the golf business for Nike. Until last November it was a perfect union. Many interested parties have wondered whether Nike Golf might experience any backlash from the industry as the unimaginable surfaced over the world’s #1 player’s private life. Recently, CNBC broke a story that estimates Woods has lost between $23 million and $30 million in deals last year due to his transgression. Some companies decided to sever their relationship, while others like Nike decided it would remain loyal. While it should be considered the worst is out of the way both for Woods and hopefully the economy too, Nike Golf’s global business wasn’t nearly affected, as some might have been lead to believe.
“Both NIKE Golf and Cole Haan struggled in the first half of the year but returned to growth in the second half,” said Don Blair, Nike’s CFO on the company conference call to investment analysts. “Revenues for both NIKE Golf and Cole Haan declined 2% for the year to reach $638 million for NIKE Golf and $464 million for Cole Haan,”
Nike and therefore, Nike Golf’s fiscal year ended on May 31, 2010. It covered a difficult year, to be polite, that saw its competitors equally challenged to maintain top line sales due to such adverse effects of foreign currency swings, political strife in Europe, and discretionary spending by consumers in the US under greater scrutiny than in previous years. While Woods is the face of the company, it clearly managed to overcome the additional obstacles and at the same time skillfully maintain its relationship with him.