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Nike Soars Overseas But U.S. Results Poor

Nike's earnings for the quarter ended Aug. 31 jumped 51% on strong international sales, but the company is taking a hard look at its U.S. operations, where sales increased only 2%. Urban teens continue to avoid high-priced basketball shoes at mall stores, and Nike's apparel and equipment sales in the U.S. fell by 1% on weak sales of Jordan-brand items and higher-priced fleece clothing and T-shirts.

Nike says it will plunge more money into marketing and fancy new Nike-owned retail stores, but will sell its 12-year-old hockey subsidiary, Nike Bauer Hockey Corp. It's also launching a strategic review of its Exeter Brands Group, which sells lower-priced shoes through retailers such as Wal-Mart and Payless ShoeSource.

The warning that Nike would spend more than previously thought trying to generate demand for its products prompted mild concern. Sara Hasan, an analyst with McAdams Wright Ragen in Seattle, says that although Nike has never done anything cheaply, it has "a pretty good track record with those investments."

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