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NIKE, INC. REPORTS FISCAL 2024 FOURTH QUARTER AND FULL YEAR RESULTS
06/27/2024
BEAVERTON, Ore.--(BUSINESS WIRE)-- NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2024 fourth quarter and full year ended May 31, 2024.
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 NIKE's future – serving the athlete through performance innovation, moving at the pace of the consumer and growing the complete marketplace," said John Donahoe, President & CEO, NIKE, Inc. "I'm confident that our teams are lining up our competitive advantages to create greater impact for our business."**
Matthew Friend, Executive Vice President & Chief Financial Officer, NIKE, Inc. said, "We are driving better balance across our portfolio. While we are encouraged by our progress, our fourth quarter results highlighted challenges that have led us to update our Fiscal '25 outlook. We are taking actions to reposition NIKE to be more competitive, and to drive sustainable, profitable long-term growth."**
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 in Greater China, APLA and EMEA, partially offset by a decline in North 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 in NIKE Brand Digital of 10 percent and NIKE-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 in North America and Western Europe.
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.
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 in Greater China and APLA, partially offset by a decline in North America.
NIKE Direct revenues were $21.5 billion, up 1 percent on a reported and currency-neutral basis, led by NIKE-owned stores growth of 6 percent, partially offset by a decline in NIKE 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 in North America and Western Europe.
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.
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*.
May 31, 2024 Balance Sheet Review
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
NIKE continues to have a strong track record of consistently increasing returns to shareholders, including 22 consecutive years of increasing dividend payouts.
In the fourth quarter, the Company returned approximately $1.6 billion to shareholders, including:
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 in June 2022.
In fiscal 2024, the Company returned approximately $6.4 billion to shareholders, including:
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 in June 2022.
As of May 31, 2024, a total of 84.9 million shares have been repurchased under the current program for a total of approximately $9.1 billion.
Conference Call
NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on June 27, 2024, to review fiscal fourth quarter and full year results. The conference call will be broadcast live via 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 11, 2024. |
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