NIKE, Inc. Reports Fiscal 2024 Fourth Quarter and Full Year Results
-
Full year revenues were
$51.4 billion compared to$51.2 billion in the prior year, up 1 percent on a currency-neutral basis* -
Fourth quarter revenues were
$12.6 billion , down 2 percent on a reported basis and flat on a currency-neutral basis -
NIKE Direct revenues for the fourth quarter were$5.1 billion , down 8 percent on a reported basis and down 7 percent on a currency-neutral basis -
Wholesale revenues for the fourth quarter were
$7.1 billion , up 5 percent on a reported basis and up 8 percent on a currency-neutral basis - Gross margin for the fourth quarter increased 110 basis points to 44.7 percent
-
Diluted earnings per share was
$0.99 for the fourth quarter
"We are taking our near-term challenges head-on, while making continued progress in the areas that matter most to
Fourth Quarter Income Statement Review
-
Revenues
for
NIKE, Inc. were$12.6 billion , down 2 percent on a reported basis and flat on a currency-neutral basis.-
Revenues for the
NIKE Brand were$12.1 billion , down 1 percent on a reported basis and up 1 percent on a currency-neutral basis, with currency-neutral growth inGreater China , APLA and EMEA, partially offset by a decline inNorth America . NIKE Direct revenues were$5.1 billion , down 8 percent on a reported basis and down 7 percent on a currency-neutral basis, due to declines inNIKE Brand Digital of 10 percent andNIKE -owned stores of 2 percent.-
Wholesale revenues for the fourth quarter were
$7.1 billion , up 5 percent on a reported basis and up 8 percent on a currency-neutral basis. -
Revenues for Converse were
$480 million , down 18 percent on a reported basis and down 17 percent on a currency-neutral basis, primarily due to declines inNorth America andWestern Europe .
-
Revenues for the
-
Gross margin
increased 110 basis points to 44.7 percent, primarily due to strategic pricing actions, lower ocean freight rates and logistics costs, and lower warehousing, partially offset by lower margin in
NIKE Direct and unfavorable changes in net foreign currency exchange rates. -
Selling and administrative expense
decreased 7 percent to
$4.1 billion .-
Demand creation expense was
$1.1 billion , flat compared to prior year as lower sports marketing expense was offset by higher advertising and marketing expense. -
Operating overhead expense decreased 9 percent to
$3.0 billion , primarily due to lower wage-related expenses. Included in Operating overhead expense was$39 million of restructuring charges.
-
Demand creation expense was
- The effective tax rate was 13.1 percent compared to 17.3 percent for the same period last year, due to changes in earnings mix, partially offset by decreased benefits from stock-based compensation.
-
Net income
was
$1.5 billion , up 45 percent, and Diluted earnings per share was$0.99 , including$0.02 of restructuring charges, net of tax benefit. Excluding these charges, Diluted earnings per share would have been$1.01 *.
Fiscal 2024 Income Statement Review
-
Revenues
for
NIKE, Inc. were$51.4 billion compared to$51.2 billion in the prior year, up 1 percent on a currency-neutral basis.-
Revenues for the
NIKE Brand were$49.3 billion , up 1 percent on a reported and currency-neutral basis, with currency-neutral growth inGreater China and APLA, partially offset by a decline inNorth America . NIKE Direct revenues were$21.5 billion , up 1 percent on a reported and currency-neutral basis, led byNIKE -owned stores growth of 6 percent, partially offset by a decline inNIKE Brand Digital of 3 percent.-
Wholesale revenues were
$27.8 billion , up 1 percent on a reported basis and up 2 percent on a currency-neutral basis. -
Revenues for Converse were
$2.1 billion , down 14 percent on a reported basis and down 15 percent on a currency-neutral basis, primarily due to declines inNorth America andWestern Europe .
-
Revenues for the
-
Gross margin
increased 110 basis points to 44.6 percent, primarily due to strategic pricing actions and lower ocean freight rates and logistics costs, partially offset by higher product input costs, lower margin in
NIKE Direct and unfavorable changes in net foreign currency exchange rates. -
Selling and administrative expense
increased 1 percent to
$16.6 billion , including$379 million of restructuring charges.-
Demand creation expense was
$4.3 billion , up 6 percent compared to prior year, reflecting an increase in advertising and marketing expense. -
Operating overhead expense was
$12.3 billion , flat compared to prior year as lower wage-related expenses and lower technology spend were offset by restructuring charges.
-
Demand creation expense was
- The effective tax rate was 14.9 percent, compared to 18.2 percent for the same period last year, due to changes in earnings mix and one-time items including the benefit provided by the delay of the effective date of US foreign tax regulations in the first quarter of fiscal 2024.
-
Net income
was
$5.7 billion , up 12 percent, and Diluted earnings per share was$3.73 , including$0.22 of restructuring charges, net of tax benefit. Excluding these charges, Diluted earnings per share would have been$3.95 *.
-
Inventories
for
NIKE, Inc. were$7.5 billion , down 11 percent compared to the prior year, reflecting a decrease in units. -
Cash and equivalents and short-term investments
were
$11.6 billion , up$0.9 billion from last year, as cash generated from operations was partially offset by share repurchases, cash dividends and capital expenditures.
Shareholder Returns
In the fourth quarter, the Company returned approximately
-
Dividends
of
$560 million , up 7 percent from prior year. -
Share repurchases
of
$1.0 billion , reflecting 11.1 million shares retired as part of the four-year,$18 billion program approved by the Board of Directors inJune 2022 .
In fiscal 2024, the Company returned approximately
-
Dividends
of
$2.2 billion , up 8 percent from prior year. -
Share repurchases
of
$4.3 billion , reflecting 41.4 million shares retired as part of the four-year,$18 billion program approved by the Board of Directors inJune 2022 .
As of
Conference Call
About
* |
Non-GAAP financial measures. See additional information in the accompanying Divisional Revenues, Supplemental |
** |
The marked paragraphs contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by |
|
||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
||||||||||
|
|
|
|
|
||||||||||
|
THREE MONTHS ENDED |
% |
TWELVE MONTHS ENDED |
% |
||||||||||
(In millions, except per share data) |
|
|
Change |
|
|
Change |
||||||||
Revenues |
$ |
12,606 |
|
$ |
12,825 |
|
-2% |
$ |
51,362 |
|
$ |
51,217 |
|
0% |
Cost of sales |
|
6,972 |
|
|
7,230 |
|
-4% |
|
28,475 |
|
|
28,925 |
|
-2% |
Gross profit |
|
5,634 |
|
|
5,595 |
|
1% |
|
22,887 |
|
|
22,292 |
|
3% |
Gross margin |
|
44.7 |
% |
|
43.6 |
% |
|
|
44.6 |
% |
|
43.5 |
% |
|
|
|
|
|
|
|
|
||||||||
Demand creation expense |
|
1,091 |
|
|
1,092 |
|
0% |
|
4,285 |
|
|
4,060 |
|
6% |
Operating overhead expense |
|
2,997 |
|
|
3,282 |
|
-9% |
|
12,291 |
|
|
12,317 |
|
0% |
Total selling and administrative expense |
|
4,088 |
|
|
4,374 |
|
-7% |
|
16,576 |
|
|
16,377 |
|
1% |
% of revenues |
|
32.4 |
% |
|
34.1 |
% |
|
|
32.3 |
% |
|
32.0 |
% |
|
|
|
|
|
|
|
|
||||||||
Interest expense (income), net |
|
(53 |
) |
|
(28 |
) |
— |
|
(161 |
) |
|
(6 |
) |
— |
Other (income) expense, net |
|
(127 |
) |
|
3 |
|
— |
|
(228 |
) |
|
(280 |
) |
— |
Income before income taxes |
|
1,726 |
|
|
1,246 |
|
39% |
|
6,700 |
|
|
6,201 |
|
8% |
Income tax expense |
|
226 |
|
|
215 |
|
5% |
|
1,000 |
|
|
1,131 |
|
-12% |
Effective tax rate |
|
13.1 |
% |
|
17.3 |
% |
|
|
14.9 |
% |
|
18.2 |
% |
|
|
|
|
|
|
|
|
||||||||
NET INCOME |
$ |
1,500 |
|
$ |
1,031 |
|
45% |
$ |
5,700 |
|
$ |
5,070 |
|
12% |
|
|
|
|
|
|
|
||||||||
Earnings per common share: |
|
|
|
|
|
|
||||||||
Basic |
$ |
0.99 |
|
$ |
0.67 |
|
48% |
$ |
3.76 |
|
$ |
3.27 |
|
15% |
Diluted |
$ |
0.99 |
|
$ |
0.66 |
|
50% |
$ |
3.73 |
|
$ |
3.23 |
|
15% |
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
||||||||
Basic |
|
1,508.0 |
|
|
1,536.5 |
|
|
|
1,517.6 |
|
|
1,551.6 |
|
|
Diluted |
|
1,516.7 |
|
|
1,556.3 |
|
|
|
1,529.7 |
|
|
1,569.8 |
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share |
$ |
0.370 |
|
$ |
0.340 |
|
|
$ |
1.450 |
|
$ |
1.325 |
|
|
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited) |
|||||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
% Change |
||||
(Dollars in millions) |
2024 |
2023 |
|||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and equivalents |
$ |
9,860 |
$ |
7,441 |
33% |
||
Short-term investments |
|
1,722 |
|
|
3,234 |
|
-47% |
Accounts receivable, net |
|
4,427 |
|
|
4,131 |
|
7% |
Inventories |
|
7,519 |
|
|
8,454 |
|
-11% |
Prepaid expenses and other current assets |
|
1,854 |
|
|
1,942 |
|
-5% |
Total current assets |
|
25,382 |
|
|
25,202 |
|
1% |
Property, plant and equipment, net |
|
5,000 |
|
|
5,081 |
|
-2% |
Operating lease right-of-use assets, net |
|
2,718 |
|
|
2,923 |
|
-7% |
Identifiable intangible assets, net |
|
259 |
|
|
274 |
|
-5% |
|
|
240 |
|
|
281 |
|
-15% |
Deferred income taxes and other assets |
|
4,511 |
|
|
3,770 |
|
20% |
TOTAL ASSETS |
$ |
38,110 |
|
$ |
37,531 |
|
2% |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Current portion of long-term debt |
$ |
1,000 |
|
$ |
— |
|
100% |
Notes payable |
|
6 |
|
|
6 |
|
0% |
Accounts payable |
|
2,851 |
|
|
2,862 |
|
0% |
Current portion of operating lease liabilities |
|
477 |
|
|
425 |
|
12% |
Accrued liabilities |
|
5,725 |
|
|
5,723 |
|
0% |
Income taxes payable |
|
534 |
|
|
240 |
|
123% |
Total current liabilities |
|
10,593 |
|
|
9,256 |
|
14% |
Long-term debt |
|
7,903 |
|
|
8,927 |
|
-11% |
Operating lease liabilities |
|
2,566 |
|
|
2,786 |
|
-8% |
Deferred income taxes and other liabilities |
|
2,618 |
|
|
2,558 |
|
2% |
Redeemable preferred stock |
|
— |
|
|
— |
|
— |
Shareholders’ equity |
|
14,430 |
|
|
14,004 |
|
3% |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
38,110 |
|
$ |
37,531 |
|
2% |
|
||||||||||||||||
DIVISIONAL REVENUES |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
% Change Excluding Currency Changes 1 |
|
|
|
% Change Excluding Currency Changes 1 |
||||||||
|
THREE MONTHS ENDED |
% |
TWELVE MONTHS ENDED |
% |
||||||||||||
(Dollars in millions) |
|
|
Change |
|
|
Change |
||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Footwear |
$ |
3,587 |
|
$ |
3,807 |
-6% |
-6% |
$ |
14,537 |
|
$ |
14,897 |
-2% |
-2% |
||
Apparel |
|
1,398 |
|
|
1,349 |
|
4% |
4% |
|
5,953 |
|
|
5,947 |
|
0% |
0% |
Equipment |
|
293 |
|
|
199 |
|
47% |
47% |
|
906 |
|
|
764 |
|
19% |
19% |
Total |
|
5,278 |
|
|
5,355 |
|
-1% |
-1% |
|
21,396 |
|
|
21,608 |
|
-1% |
-1% |
|
|
|
|
|
|
|
|
|
||||||||
Footwear |
|
2,067 |
|
|
2,174 |
|
-5% |
-2% |
|
8,473 |
|
|
8,260 |
|
3% |
1% |
Apparel |
|
1,049 |
|
|
1,038 |
|
1% |
3% |
|
4,380 |
|
|
4,566 |
|
-4% |
-6% |
Equipment |
|
176 |
|
|
138 |
|
28% |
29% |
|
754 |
|
|
592 |
|
27% |
24% |
Total |
|
3,292 |
|
|
3,350 |
|
-2% |
1% |
|
13,607 |
|
|
13,418 |
|
1% |
0% |
|
|
|
|
|
|
|
|
|
||||||||
Footwear |
|
1,357 |
|
|
1,336 |
|
2% |
6% |
|
5,552 |
|
|
5,435 |
|
2% |
6% |
Apparel |
|
460 |
|
|
438 |
|
5% |
9% |
|
1,828 |
|
|
1,666 |
|
10% |
14% |
Equipment |
|
46 |
|
|
36 |
|
28% |
32% |
|
165 |
|
|
147 |
|
12% |
17% |
Total |
|
1,863 |
|
|
1,810 |
|
3% |
7% |
|
7,545 |
|
|
7,248 |
|
4% |
8% |
|
|
|
|
|
|
|
|
|
||||||||
Footwear |
|
1,226 |
|
|
1,230 |
|
0% |
3% |
|
4,865 |
|
|
4,543 |
|
7% |
7% |
Apparel |
|
416 |
|
|
409 |
|
2% |
5% |
|
1,614 |
|
|
1,664 |
|
-3% |
-2% |
Equipment |
|
63 |
|
|
57 |
|
11% |
13% |
|
250 |
|
|
224 |
|
12% |
12% |
Total |
|
1,705 |
|
|
1,696 |
|
1% |
4% |
|
6,729 |
|
|
6,431 |
|
5% |
5% |
Global Brand Divisions 2 |
|
11 |
|
|
14 |
|
-21% |
-28% |
|
45 |
|
|
58 |
|
-22% |
-25% |
TOTAL |
|
12,149 |
|
|
12,225 |
|
-1% |
1% |
|
49,322 |
|
|
48,763 |
|
1% |
1% |
Converse |
|
480 |
|
|
586 |
|
-18% |
-17% |
|
2,082 |
|
|
2,427 |
|
-14% |
-15% |
Corporate3 |
|
(23 |
) |
|
14 |
|
— |
— |
|
(42 |
) |
|
27 |
|
— |
— |
TOTAL |
$ |
12,606 |
|
$ |
12,825 |
|
-2% |
0% |
$ |
51,362 |
|
$ |
51,217 |
|
0% |
1% |
|
|
|
|
|
|
|
|
|
||||||||
TOTAL |
|
|
|
|
|
|
|
|
||||||||
Footwear |
$ |
8,237 |
|
$ |
8,547 |
|
-4% |
-2% |
$ |
33,427 |
|
$ |
33,135 |
|
1% |
1% |
Apparel |
|
3,323 |
|
|
3,234 |
|
3% |
4% |
|
13,775 |
|
|
13,843 |
|
0% |
0% |
Equipment |
|
578 |
|
|
430 |
|
34% |
35% |
|
2,075 |
|
|
1,727 |
|
20% |
20% |
Global Brand Divisions2 |
|
11 |
|
|
14 |
|
-21% |
-28% |
|
45 |
|
|
58 |
|
-22% |
-25% |
TOTAL |
$ |
12,149 |
|
$ |
12,225 |
|
-1% |
1% |
$ |
49,322 |
|
$ |
48,763 |
|
1% |
1% |
1 The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with |
||||||||||||||||
2 Global Brand Divisions revenues include |
||||||||||||||||
3 Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the |
|
||||||||
SUPPLEMENTAL |
||||||||
(Unaudited) |
||||||||
|
|
|
|
% Change Excluding Currency Changes 1 |
||||
|
|
|
|
|||||
|
TWELVE MONTHS ENDED |
% |
||||||
(Dollars in millions) |
|
|
Change |
|||||
|
|
|
|
|
||||
Sales to Wholesale Customers |
$ |
27,758 |
|
$ |
27,397 |
|
1% |
2% |
Sales through |
|
21,519 |
|
|
21,308 |
|
1% |
1% |
Global Brand Divisions2 |
|
45 |
|
|
58 |
|
-22% |
-25% |
TOTAL |
$ |
49,322 |
|
$ |
48,763 |
|
1% |
1% |
|
|
|
|
|
||||
|
|
|
|
|
||||
Sales to Wholesale Customers |
$ |
27,758 |
|
$ |
27,397 |
|
1% |
2% |
Sales from our Wholesale Operations to |
|
13,009 |
|
|
12,730 |
|
2% |
2% |
TOTAL |
$ |
40,767 |
|
$ |
40,127 |
|
2% |
2% |
|
|
|
|
|
||||
|
|
|
|
|
||||
Men’s |
$ |
20,868 |
|
$ |
20,733 |
|
1% |
1% |
Women’s |
|
8,586 |
|
|
8,606 |
|
0% |
1% |
Kids’ |
|
5,111 |
|
|
5,038 |
|
1% |
1% |
|
|
6,988 |
|
|
6,589 |
|
6% |
7% |
Others4 |
|
(786 |
) |
|
(839 |
) |
6% |
6% |
TOTAL |
$ |
40,767 |
|
$ |
40,127 |
|
2% |
2% |
1 The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with |
||||||||
2 Global Brand Divisions revenues include |
||||||||
3 References to |
||||||||
4 Others include products not allocated to Men's, Women's, Kids' and |
|
||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES 1 |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
||||||||||
|
|
|
|
|
||||||||||
|
THREE MONTHS ENDED |
% |
TWELVE MONTHS ENDED |
% |
||||||||||
(Dollars in millions) |
|
|
Change |
|
|
Change |
||||||||
|
$ |
1,462 |
|
$ |
1,390 |
|
5% |
$ |
5,822 |
|
$ |
5,454 |
|
7% |
|
|
797 |
|
|
781 |
|
2% |
|
3,388 |
|
|
3,531 |
|
-4% |
|
|
548 |
|
|
529 |
|
4% |
|
2,309 |
|
|
2,283 |
|
1% |
|
|
479 |
|
|
462 |
|
4% |
|
1,885 |
|
|
1,932 |
|
-2% |
Global Brand Divisions2 |
|
(1,148 |
) |
|
(1,268 |
) |
9% |
|
(4,720 |
) |
|
(4,841 |
) |
2% |
TOTAL |
|
2,138 |
|
|
1,894 |
|
13% |
|
8,684 |
|
|
8,359 |
|
4% |
Converse |
|
94 |
|
|
150 |
|
-37% |
|
474 |
|
|
676 |
|
-30% |
Corporate3 |
|
(559 |
) |
|
(826 |
) |
32% |
|
(2,619 |
) |
|
(2,840 |
) |
8% |
TOTAL |
|
1,673 |
|
|
1,218 |
|
37% |
|
6,539 |
|
|
6,195 |
|
6% |
EBIT margin1 |
|
13.3 |
% |
|
9.5 |
% |
|
|
12.7 |
% |
|
12.1 |
% |
|
Interest expense (income), net |
|
(53 |
) |
|
(28 |
) |
— |
|
(161 |
) |
|
(6 |
) |
— |
TOTAL |
$ |
1,726 |
|
$ |
1,246 |
|
39% |
$ |
6,700 |
|
$ |
6,201 |
|
8% |
1 The Company evaluates the performance of individual operating segments based on earnings before interest and taxes (commonly referred to as "EBIT"), which represents Net income before Interest expense (income), net and Income tax expense. Total |
||||||||||||||
2 Global Brand Divisions primarily represent demand creation and operating overhead expense, including product creation and design expenses that are centrally managed for the |
||||||||||||||
3 Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses. For the twelve months ended |
|
||||||
DILUTED EARNINGS PER SHARE |
||||||
(Unaudited) |
||||||
|
|
|
||||
|
|
|
||||
|
THREE MONTHS ENDED |
TWELVE MONTHS ENDED |
||||
|
|
|
||||
DILUTED EARNINGS PER SHARE (GAAP): |
$ |
0.99 |
|
$ |
3.73 |
|
Add: Restructuring charges |
|
0.03 |
|
|
0.29 |
|
Tax effect of the restructuring charges1 |
|
(0.01 |
) |
|
(0.07 |
) |
DILUTED EARNINGS PER SHARE EXCLUDING RESTRUCTURING CHARGES (NON-GAAP): 2 |
$ |
1.01 |
|
$ |
3.95 |
|
1 Tax effect was determined by applying the tax rate applicable to the specific item. |
||||||
2 Diluted earnings per share excluding the restructuring charges is a non-GAAP financial measure. The most comparable GAAP measure is Diluted earnings per share. The Company uses Diluted earnings per share excluding the restructuring charges to facilitate the evaluation of the Company’s performance. The Company believes that providing Diluted earnings per share excluding the impacts of the restructuring charges is useful to investors for comparability between periods and allows investors to evaluate the impacts of the restructuring charges separately. For the three and twelve months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240627955686/en/
Investor Contact:
investor.relations@nike.com
Media Contact:
Virginia Rustique-Petteni
media.relations@nike.com
Source: