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Earnings Preview: Nike 1Q profit expected to fall

NEW YORK (AP) -- Nike Inc.'s fiscal first-quarter net income is expected to dip as high costs and the uncertain global economy offset demand generated during the summer Olympics and the European soccer championships. The world's largest athletic shoe and clothing company reports after the market closes on Thursday.

WHAT TO WATCH FOR: Like most consumer product makers, Nike Inc. faces rising costs for packaging, fuel and other raw materials. In addition, the weak economy in Europe and softening in China is likely to weigh on results to a degree.

Still, strong demand for Nike's shoes and clothes has helped the company charge past many rivals. It recently launched several high-profile lines: FlyKnit lightweight shoes and Nike+ FuelBand, training software and other gear. Expect to hear an update about how summer sporting events like the European soccer championships and the Olympics affected revenue.

Analysts will also be looking for an update on how the Beaverton, Ore., company's decision to sell its Cole Haan and Umbro brands has progressed.

WHY IT MATTERS: Nike's results give insight into challenges facing the retail industry and also provide a glimpse at how willing consumers worldwide are to spend their money, which is key to an economic recovery.

WHAT'S EXPECTED: Analysts polled by FactSet, on average, expect Nike will earn $1.12 per share on revenue of $6.43 billion for the June-August quarter.

LAST YEAR'S QUARTER: In the first quarter last year, net income totaled $1.36 per share on revenue of $6.08 billion.