Sept. 20 (Bloomberg) -- Nike Inc., the world’s largest maker of sporting goods, announced an $8 billion, four-year program to repurchase shares of its class B common stock.
The company has a $5 billion share-buying authorization that will be completed during the fiscal second quarter of 2013, the Beaverton, Oregon-based Nike said in a statement. Nike announced the current four-year program in September 2008.
“Repurchasing our shares is a prudent use of our cash,” Chief Executive Officer Mark Parker said in the statement. “This new share repurchase program demonstrates our continued confidence in Nike’s strategy to generate long-term profitable growth and strong cash flow, and reflects our commitment to delivering value to our shareholders.”
Nike has posted declining fourth-quarter profit margins on higher costs for labor and raw materials. Earnings in the period ended May fell for the first time since 2009. To improve results, the company has raised prices and plans to sell its Cole Haan and Umbro units to focus on its most profitable businesses.
The announcement came after CVS Caremark Corp., the largest provider of prescription drugs in the U.S., said it approved a buyback of as much as $6 billion in shares.
Nike was little changed at $97.67 in New York trading yesterday and has gained 1.3 percent this year. The stock had climbed 89 percent in the three years through 2011.
The shoemaker had about 361 million shares of Class B common stock outstanding as of Aug. 31, the company said. The company’s market value was $44.3 billion at the close in New York. It had $2.32 billion of cash on its balance sheet as of May 31.
The company will host its annual shareholders meeting tomorrow in Beaverton, Oregon.
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