- Fourth quarter revenues up 5 percent to
$8.7 billion; 7 percent growth on a currency-neutral basis*
- Fourth quarter diluted earnings per
share increased 22 percent to $0.60
- Fiscal 2017 revenues up 6 percent to
$34.4 billion; 8 percent growth on a currency-neutral basis*
- Fiscal 2017 diluted earnings per share
increased 16 percent to $2.51
- Inventories up 4 percent as of May 31,
2017
NIKE, Inc. (NYSE:NKE) today reported fiscal 2017 financial
results for its fourth quarter and full year ended May 31, 2017.
International geographies and the Direct-to-Consumer (DTC)
businesses globally led strong revenue growth in the fourth quarter
and full year.
Diluted earnings per share for the quarter rose 22 percent to
$0.60 driven by global revenue growth, lower selling and
administrative expense, a lower tax rate and a lower average share
count which were slightly offset by lower gross margin.
Fiscal 2017 diluted earnings per share rose 16 percent to $2.51,
reflecting revenue growth of 6 percent, a lower tax rate and a
lower average share count which was slightly offset by lower gross
margin.
“NIKE continues to create both near-term wins in today’s dynamic
environment and a lasting foundation for future growth,” said Mark
Parker, Chairman, President and CEO, NIKE, Inc. “Through our
Consumer Direct Offense, we’re putting even more firepower behind
our greatest opportunities in Fiscal 2018. It will be a big year
for NIKE innovation and we’ll bring those stories to life through
deeper consumer connections in our key cities around the
world.”**
Fourth Quarter Income Statement Review
- Revenues for NIKE, Inc. rose 5
percent to $8.7 billion, up 7 percent on a currency-neutral basis.
- Revenues for the NIKE Brand were $8.1
billion, up 7 percent on a currency-neutral basis driven by
double-digit growth in Western Europe, Greater China, and the
Emerging Markets, and strong growth in Sportswear and Running.
- Revenues for Converse were $554
million, up 10 percent on a currency-neutral basis, primarily
driven by the market transition in Italy and growth in DTC.
- Gross margin declined 180 basis
points to 44.1 percent as higher average selling prices were more
than offset by unfavorable changes in foreign currency exchange
rates and higher product costs.
- Selling and administrative
expense decreased 4 percent to $2.7 billion. Demand creation
expense was $789 million, down 10 percent, as fiscal 2017 spend was
weighted towards the beginning of the year due to significant
investments around the Olympics and the European Football
Championship. Operating overhead expense decreased 1 percent to
$1.9 billion, as continued investments in DTC were offset by
administrative cost efficiencies.
- Other income, net was $28
million comprised primarily of net foreign currency exchange hedge
gains.
- The effective tax rate was 13.7
percent, compared to 21.2 percent for the same period last year,
primarily due to an increase in the proportion of earnings from
operations outside of the United States, which are generally
subject to a lower tax rate.
- Net income increased 19 percent
to $1.0 billion primarily due to global revenue growth, lower
selling and administrative expense and a lower tax rate which were
slightly offset by a gross margin decline, while diluted
earnings per share increased 22 percent to $0.60 reflecting a
nearly 3 percent decline in the weighted average diluted common
shares outstanding.
Fiscal 2017 Income Statement Review
- Revenues for NIKE, Inc. rose 6
percent to $34.4 billion, up 8 percent on a currency-neutral
basis.
- Also, on a currency-neutral basis:
- Revenues for the NIKE Brand were $32.2
billion, up 8 percent.
- NIKE Brand sales to wholesale customers
increased 5 percent while DTC revenues grew to $9.1 billion, up 18
percent, driven by a 30 percent increase in digital commerce sales,
the addition of new stores and 7 percent growth in comparable store
sales. As of May 31, 2017, the NIKE Brand had 985 DTC stores in
operation as compared to 919 a year ago.
- NIKE Brand revenue growth was driven by
growth in every geography as well as key categories including
Sportswear, Running and the Jordan Brand.
- Revenues for Converse were $2.0
billion, up 6 percent, driven by growth in the United States and
Europe due to the market transition in Italy.
- Gross margin declined 160 basis
points to 44.6 percent as higher average selling prices were more
than offset by the negative impact of changes in foreign currency
exchange rates and higher product costs.
- Selling and administrative
expense increased 1 percent to $10.6 billion. Demand creation
expense was $3.3 billion, up 2 percent, primarily due to higher
sports marketing costs and significant investments around the
Olympics and the European Football Championship in the first half
of the fiscal year. Operating overhead expense remained flat at
$7.2 billion, as continued investments in DTC were offset by
administrative cost efficiencies and lower variable
compensation.
- Other income, net was $196
million comprised primarily of net foreign currency exchange hedge
gains.
- The effective tax rate was 13.2
percent, compared to 18.7 percent for the same period last year
primarily due to a one-time benefit in the first quarter of the
fiscal year related to the resolution with the U.S. Internal
Revenue Service of a foreign tax credit matter, and a decrease in
foreign earnings taxed in the U.S.
- Net income increased 13 percent
to $4.2 billion reflecting strong global revenue growth, selling
and administrative expense leverage and a lower tax rate which were
slightly offset by a decline in gross margin. Diluted earnings per
share increased 16 percent to $2.51, reflecting growth in net
income and the additional benefit of a decline in the weighted
average diluted common shares outstanding.
May 31, 2017 Balance Sheet Review
- Inventories for NIKE, Inc. were
$5.1 billion, up 4 percent from May 31, 2016, as a 3 percent
decrease in NIKE Brand wholesale unit inventories was more than
offset by increases in average product cost per unit and growth in
our DTC businesses.
- Cash and short-term investments
were $6.2 billion, $722 million higher than last year as growth in
net income, proceeds from the issuance of debt in the second
quarter of fiscal 2017 and proceeds from employee exercises of
stock options were partially offset by share repurchases,
dividends, and investments in infrastructure and working
capital.
Share Repurchases
During the fourth quarter, NIKE, Inc. repurchased a total of
14.9 million shares for approximately $820 million as part of the
four-year, $12 billion program approved by the Board of Directors
in November 2015. As of May 31, 2017, a total of 79.8 million
shares had been repurchased under this program for approximately
$4.4 billion.
Conference Call
NIKE, Inc. management will host a conference call beginning at
approximately 2:00 p.m. PT on June 29, 2017, to review fiscal
fourth quarter and full year results. The conference call will be
broadcast live over the Internet and can be accessed at
http://investors.NIKE.com. For those unable to listen to the live
broadcast, an archived version will be available at the same
location through 9:00 p.m. PT, July 6, 2017.
About NIKE, Inc.
NIKE, Inc., based near Beaverton, Oregon, is the world’s leading
designer, marketer and distributor of authentic athletic footwear,
apparel, equipment and accessories for a wide variety of sports and
fitness activities. Wholly-owned NIKE, Inc. subsidiary brands
include Converse, which designs, markets and distributes athletic
lifestyle footwear, apparel and accessories; and Hurley, which
designs, markets and distributes surf and youth lifestyle footwear,
apparel and accessories. For more information, NIKE, Inc.’s
earnings releases and other financial information are available on
the Internet at http://investors.NIKE.com and individuals can
follow @NIKE.
* See additional information in the accompanying
Divisional Revenues table regarding this non-GAAP financial
measure. ** The marked paragraph contains 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 NIKE with the
Securities and Exchange Commission (SEC), including Forms 8-K,
10-Q, and 10-K.
NIKE, Inc. CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED % TWELVE MONTHS ENDED
% (Dollars in millions, except per share data)
5/31/2017 5/31/2016
Change 5/31/2017
5/31/2016 Change Revenues
$ 8,677 $ 8,244 5 % $ 34,350 $ 32,376 6 % Cost of sales
4,854 4,458 9 %
19,038 17,405 9 %
Gross profit 3,823 3,786 1 % 15,312 14,971 2 % Gross margin 44.1 %
45.9 % 44.6 % 46.2 % Demand creation expense 789 873 -10 %
3,341 3,278 2 % Operating overhead expense 1,876
1,893 -1 %
7,222 7,191 0 % Total selling
and administrative expense 2,665 2,766 -4 % 10,563 10,469 1 % % of
revenues 30.7 % 33.6 % 30.8 % 32.3 % Interest expense
(income), net 18 5 — 59 19 — Other (income) expense, net
(28 ) (58 ) —
(196 ) (140 ) — Income before
income taxes 1,168 1,073 9 % 4,886 4,623 6 % Income tax expense
160 227 -30 %
646 863 -25
% Effective tax rate 13.7 % 21.2 % 13.2 % 18.7 %
NET INCOME $ 1,008
$ 846 19 %
$ 4,240 $
3,760 13 % Earnings per
common share: Basic $ 0.61 $ 0.50 22 % $ 2.56 $ 2.21 16 % Diluted $
0.60 $ 0.49 22 % $ 2.51 $ 2.16 16 % Weighted average common
shares outstanding: Basic 1,646.9 1,682.4 1,657.8 1,697.9 Diluted
1,678.6 1,723.1 1,692.0 1,742.5 Dividends declared per
common share $ 0.18 $ 0.16
$ 0.70 $ 0.62
NIKE, Inc.
CONSOLIDATED BALANCE SHEETS May 31, May
31,
(Dollars in millions)
2017 2016
% Change
ASSETS Current assets: Cash and equivalents $ 3,808 $ 3,138 21%
Short-term investments 2,371 2,319 2% Accounts receivable, net
3,677 3,241 13% Inventories 5,055 4,838 4% Prepaid expenses and
other current assets 1,150 1,489
-23% Total current assets 16,061 15,025 7% Property,
plant and equipment, net 3,989 3,520 13% Identifiable intangible
assets, net 283 281 1% Goodwill 139 131 6% Deferred income taxes
and other assets 2,787 2,422
15%
TOTAL ASSETS $ 23,259
$ 21,379 9%
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $ 6 $ 44 -86% Notes payable 325 1 —
Accounts payable 2,048 2,191 -7% Accrued liabilities 3,011 3,037
-1% Income taxes payable 84 85
-1% Total current liabilities 5,474 5,358 2%
Long-term debt 3,471 1,993 74% Deferred income taxes and other
liabilities 1,907 1,770 8% Redeemable preferred stock — — —
Shareholders' equity 12,407
12,258 1%
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 23,259 $
21,379 9%
NIKE, Inc.
DIVISIONAL REVENUES
% Change
% Change
Excluding
Excluding
THREE MONTHS ENDED %
Currency
TWELVE MONTHS ENDED %
Currency
(Dollars in millions)
5/31/2017
5/31/2016 Change
Changes1
5/31/2017
5/31/2016 Change
Changes1
North America Footwear $ 2,457 $ 2,367 4 % 4 % $ 9,684 $
9,299 4 % 4 % Apparel 1,142 1,163 -2 % -2 % 4,886 4,746 3 % 3 %
Equipment 154 205 -25 %
-25 % 646 719
-10 % -10 % Total 3,753 3,735 0 % 1 % 15,216 14,764 3
% 3 %
Western Europe Footwear 1,066 1,027 4 % 11 % 4,068
3,985 2 % 7 % Apparel 438 411 7 % 15 % 1,868 1,628 15 % 21 %
Equipment 60 64 -6 %
1 % 275 271
1 % 7 % Total 1,564 1,502 4 % 12 % 6,211 5,884 6 % 11 %
Central & Eastern Europe Footwear 233 224 4 % 9 % 927
882 5 % 9 % Apparel 103 102 1 % 2 % 471 463 2 % 4 % Equipment
21 19 11 % 11 %
89 86 3 % 6
% Total 357 345 3 % 6 % 1,487 1,431 4 % 7 %
Greater China
Footwear 765 681 12 % 18 % 2,920 2,599 12 % 18 % Apparel 293 268 9
% 14 % 1,188 1,055 13 % 18 % Equipment 29
30 -3 % -3 % 129
131 -2 % 3 % Total 1,087 979 11
% 16 % 4,237 3,785 12 % 17 %
Japan Footwear 196 187 5 % 4 %
666 570 17 % 7 % Apparel 78 70 11 % 11 % 275 228 21 % 10 %
Equipment 21 23 -9 %
-10 % 73 71
3 % -6 % Total 295 280 5 % 5 % 1,014 869 17 % 7 %
Emerging Markets Footwear 756 596 27 % 24 % 2,816 2,536 11 %
17 % Apparel 247 226 9 % 6 % 966 947 2 % 8 % Equipment
50 50 0 % -3 %
213 218 -2 % 2 %
Total 1,053 872 21 % 18 % 3,995 3,701 8 % 14 %
Global Brand
Divisions2 18 12
50 % 68 % 73 73
0 % 2 %
TOTAL NIKE BRAND
8,127 7,725 5 % 7 %
32,233 30,507 6 %
8 % Converse 554 513 8 % 10 % 2,042 1,955 4 % 6 % Corporate3
(4 ) 6 — —
75 (86 ) — —
TOTAL NIKE, INC. REVENUES $ 8,677
$ 8,244 5 % 7 % $ 34,350
$ 32,376 6 % 8 %
TOTAL NIKE
BRAND Footwear $ 5,473 $ 5,082 8 % 10 % $ 21,081 $ 19,871 6 % 8
% Apparel 2,301 2,240 3 % 4 % 9,654 9,067 6 % 9 % Equipment 335 391
-14 % -14 % 1,425 1,496 -5 % -3 % Global Brand Divisions2
18 12 50 % 68 %
73 73 0 % 2 %
1 Fiscal 2017 results have been restated
using fiscal 2016 exchange rates for the comparative period to
enhance the visibility of the underlying business trends excluding
the impact of translation arising from foreign currency exchange
rate fluctuations, which is considered a non-GAAP financial
measure.
2 Global Brand Divisions revenues are
primarily attributable to NIKE Brand licensing businesses that are
not part of a geographic operating segment.
3 Corporate revenues primarily consist of
foreign currency hedge gains and losses related to revenues
generated by entities within the NIKE Brand geographic operating
segments and Converse but managed through our central foreign
exchange risk management program.
NIKE,
Inc. SUPPLEMENTAL NIKE BRAND REVENUE DETAILS
% Change
Excluding
TWELVE MONTHS ENDED
Currency
(Dollars in millions)
5/31/2017
5/31/20161
% Change
Changes2
NIKE Brand Revenues by: Sales to Wholesale Customers $
23,078 $ 22,577 2% 5% Sales Direct to Consumer 9,082 7,857 16% 18%
Global Brand Divisions3 73 73
0% 2%
TOTAL NIKE BRAND REVENUES
$ 32,233 $ 30,507
6% 8% NIKE
Brand Revenues on a Wholesale Equivalent Basis:4 Sales
to Wholesale Customers $ 23,078 $ 22,577 2% 5% Sales from our
Wholesale Operations to Direct to Consumer Operations
5,616 4,672 20%
22%
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
$ 28,694 $ 27,249
5% 8% NIKE Brand
Wholesale Equivalent Revenues by:4 Men's $ 16,041 $
15,410 4% 6% Women’s 6,644 6,296 6% 8% Young Athletes' 4,838 4,560
6% 8% Others5 1,171 983
19% 21%
TOTAL NIKE BRAND WHOLESALE
EQUIVALENT REVENUES $ 28,694
$ 27,249 5%
8% NIKE Brand Wholesale Equivalent Revenues
by:4 Running $ 5,278 $ 5,017 5% 8% NIKE Basketball 1,292
1,378 -6% -5% Jordan Brand 3,099 2,753 13% 13% Football (Soccer)
1,987 2,143 -7% -4% Men’s Training 2,617 2,611 0% 1% Women’s
Training 1,265 1,344 -6% -4% Action Sports 596 655 -9% -7%
Sportswear 8,587 7,513 14% 17% Golf 579 706 -18% -18% Others6
3,394 3,129 8%
11%
TOTAL NIKE BRAND WHOLESALE EQUIVALENT
REVENUES $ 28,694 $
27,249 5% 8%
1 Certain prior year amounts have been
reclassified to conform to fiscal 2017 presentation. These changes
had no impact on previously reported results of operations or
shareholders' equity.
2 Fiscal 2017 results have been restated
using fiscal 2016 exchange rates for the comparative period to
enhance the visibility of the underlying business trends excluding
the impact of translation arising from foreign currency exchange
rate fluctuations, which is considered a non-GAAP financial
measure.
3 Global Brand Divisions revenues are
primarily attributable to NIKE Brand licensing businesses that are
not part of a geographic operating segment.
4 References to NIKE Brand wholesale
equivalent revenues, which are considered non-GAAP financial
measures, are intended to provide context as to the total size of
our NIKE Brand market footprint if we had no Direct to Consumer
operations. NIKE Brand wholesale equivalent revenues consist of 1)
sales to external wholesale customers and 2) internal sales from
our wholesale operations to our Direct to Consumer operations which
are charged at prices that are comparable to prices charged to
external wholesale customers.
5 Others include all unisex products,
equipment and other products not allocated to Men's, Women's and
Young Athletes', as well as certain adjustments that are not
allocated to products designated by gender or age.
6 Others include all other categories and
certain adjustments that are not allocated at the category
level.
NIKE, Inc. EARNINGS BEFORE INTEREST
AND TAXES1 THREE MONTHS ENDED
% TWELVE MONTHS ENDED % (Dollars in millions)
5/31/2017
5/31/2016 Change
5/31/2017
5/31/2016 Change North America $
979 $ 936 5 % $ 3,875 $ 3,763 3 % Western Europe 285 308 -7 % 1,203
1,434 -16 % Central & Eastern Europe 48 46 4 % 244 289 -16 %
Greater China 380 357 6 % 1,507 1,372 10 % Japan 77 55 40 % 224 174
29 % Emerging Markets 215 191 13 % 816 892 -9 % Global Brand
Divisions2 (689 ) (722 )
5 % (2,677 )
(2,596 ) -3 %
TOTAL NIKE BRAND
1,295 1,171
11 % 5,192
5,328 -3
% Converse 137 128 7 % 477 487 -2 % Corporate3
(246 ) (221 ) -11 %
(724 ) (1,173 ) 38
%
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES
1,186 1,078
10 % 4,945
4,642
7 % Interest expense (income), net 18
5 —
59 19
—
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES
$ 1,168 $
1,073 9 %
$ 4,886 $ 4,623
6 % 1 The Company
evaluates 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.
2 Global Brand Divisions primarily
represent demand creation, operating overhead and product creation
and design expenses that are centrally managed for the NIKE Brand.
Revenues for Global Brand Divisions are primarily attributable to
NIKE Brand licensing businesses that are not part of a geographic
operating segment.
3 Corporate consists largely 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170629006278/en/
NIKE, Inc.Investor Contact:Nitesh
Sharan, 503-532-2828orMedia
Contact:Kellie Leonard, 503-671-6171
Nike (NYSE:NKE)
Historical Stock Chart
From Apr 2024 to May 2024
Nike (NYSE:NKE)
Historical Stock Chart
From May 2023 to May 2024