Revenue up 9 percent for the
fiscal year and fourth quarter; Fourth quarter earnings per share up 34
percent; Worldwide futures orders up 12 percent
BEAVERTON, Ore. (26 June, 2007)
– NIKE, Inc. (NYSE:NKE) today reported financial results for the 2007
fiscal year, ended May 31, 2007. For the fiscal year, revenues grew 9
percent to $16.3 billion, compared to $15.0 billion last year. Net
income increased 7 percent to $1.5 billion, compared to $1.4 billion
last year, and diluted earnings per share increased 11 percent to $2.93
versus $2.64 last year. For the fourth quarter, revenues increased 9
percent to $4.4 billion, compared to $4.0 billion for the same period
last year. Fourth quarter net income increased 32 percent to $437.9
million, compared to $332.8 million in the prior year, and diluted
earnings per share increased 34 percent to $0.86, versus $0.64 last
year. Changes in currency exchange rates increased revenue growth by 2
percentage points for the full year and fourth quarter.
Commenting on results, Mark Parker, Nike, Inc. President and CEO
said, “Nike is a growth company, and fiscal 2007 was no exception. We
delivered another record year of revenue, earnings and cash flow. The
Nike brand is extremely strong worldwide, and the Nike subsidiaries
continue to increase their contribution to the performance of the
company.”
“Opportunities for growth at Nike have never been greater,” Parker
added. “We have a unique ability to consistently turn consumer insights
into performance products and experiences. That's a big part of what
distinguishes Nike as the global industry leader.”
Futures Orders
The Company reported worldwide futures orders for athletic footwear
and apparel, scheduled for delivery from June 2007 through November
2007, totaling $7.7 billion, 12 percent higher than such orders reported
for the same period last year. Changes in currency exchange rates
increased reported orders growth by 1 percentage point.*
By region, futures orders for the U.S. increased 7 percent; Europe
(which includes the Middle East and Africa) increased 12 percent; Asia
Pacific grew 19 percent; and the Americas increased 15 percent. Changes
in currency exchange rates increased reported futures orders growth in
Europe by 1 percentage point; in the Asia Pacific region by 4 percentage
points; and in the Americas region decreased reported futures orders by
1 percentage point.*
Regional Highlights
U.S.
During the fourth quarter, U.S. revenues increased 10 percent to $1.6
billion versus $1.5 billion for the same period last year. Footwear
revenues increased 9 percent to $1.1 billion. Apparel revenues
increased 11 percent to $437.9 million. Equipment revenues increased 23
percent to $91.5 million. U.S. pre-tax income improved 20 percent to
$415.2 million.
For the full fiscal year, U.S. revenues were up 7 percent to $6.1
billion. Footwear revenues increased 6 percent to $4.1 billion, apparel
revenues grew 8 percent to $1.7 billion and equipment revenues
increased 8 percent to $323.8 million. U.S. pre-tax income rose 4
percent to $1.3 billion for the fiscal year.
Europe
Fourth quarter revenues for the European region grew 12 percent to $1.3
billion from $1.2 billion for the same period last year. Changes in
currency exchange rates increased revenue growth by 9 percentage points.
Footwear revenues increased 13 percent to $757.1 million. Apparel
revenues grew by 10 percent to $436.0 million and equipment revenues
increased 19 percent to $98.3 million. Fourth quarter pre-tax income
increased 29 percent to $292.9 million.
Full fiscal year European revenues grew 9 percent to $4.7 billion.
Changes in currency exchange rates increased revenue growth by 6
percentage points. Footwear revenues were up 6 percent to $2.6 billion,
apparel revenues increased 13 percent to $1.8 billion and equipment
revenues grew 14 percent to $358.1 million. European fiscal year pre-tax
income increased 4 percent to $1.0 billion.
Asia Pacific
Fourth quarter revenues for the Asia Pacific region grew 7 percent to
$596.9 million compared to $558.6 million a year ago. Changes in
currency exchange rates increased revenue growth by 2 percentage points.
Footwear revenues were up 7 percent to $296.4 million, apparel revenues
increased 7 percent to $240.4 million and equipment revenues grew 8
percent to $60.1 million. Fourth quarter pre-tax income increased 37
percent to $118.5 million.
For the full fiscal year, Asia Pacific revenues increased 11 percent
to $2.3 billion, compared to $2.1 billion last year. Changes in currency
exchange rates increased revenue growth by 1 percentage point. Footwear
revenues were $1.2 billion, up 11 percent from $1.0 billion last year.
Apparel revenues increased 11 percent to $909.3 million and equipment
revenues grew by 11 percent to $214.9 million. Pre-tax income increased
17 percent to $483.7 million for the fiscal year.
Americas
Fourth quarter revenues in the Americas region were relatively flat to
the prior year at $235.0 million. Changes in currency exchange rates did
not have a significant impact on revenue growth. Footwear revenues were
up 8 percent to $169.4 million, apparel revenues decreased 27 percent
to $44.7 million and equipment revenues rose 15 percent to $20.9
million. Pre-tax income was up 20 percent to $38.5 million for the
quarter.
Full fiscal year revenues for the Americas region grew 5 percent to
$952.5 million, 1 percentage point of this growth was the result of
changes in currency exchange rates. Footwear revenues increased 7
percent to $679.6 million, apparel revenues decreased 4 percent to
$193.9 million, and equipment revenues rose 17 percent to $79.0
million. Pre-tax income increased 9 percent for the fiscal year to
$187.4 million.
Other Businesses
For the fourth quarter, Other business revenues, which include Cole Haan
Holdings Incorporated, Converse Inc., Exeter Brands Group LLC, Hurley
International LLC, NIKE Bauer Hockey Inc., and NIKE Golf, grew 9 percent
to $649.7 million and pre-tax income was up 102 percent to $93.1
million. For the fiscal year, Other business revenues increased 16
percent to $2.3 billion and pre-tax income increased 98 percent to
$303.7 million.
Prior year fourth quarter and fiscal year pre-tax income included a
one-time $51.9 million charge related to an arbitration ruling involving
Converse and a former South American licensee. In fiscal 2007 the
ruling was settled for less than this amount, which resulted in a $14.2
million benefit to Other business pre-tax income. Excluding these
items, Other business pre-tax income would have decreased 5 percent for
the fourth quarter and increased 41 percent for the fiscal year.
Income Statement Review
In the fourth quarter of fiscal 2007 gross margins were comparable to
the prior year at 43.8 percent; selling and administrative expenses
were 29.0 percent or revenues versus 30.8 percent last year and the
effective tax rate was 33.5 percent compared to 34.9 percent last year.
Fourth quarter net income included $19.3 million, net of taxes, related
to the expensing of stock options. In addition, the prior year fourth
quarter net income included a one-time $30.8 million charge, net of
taxes, related to the Converse arbitration ruling. Excluding these two
items fourth quarter diluted earnings per share would have increased 29
percent to $0.90 from $0.70 last year.
For the fiscal year, gross margins were 43.9 percent compared to 44.0
percent last year; selling and administrative expenses were 30.8
percent versus 29.9 percent last year; and the effective tax rate was
32.2 percent compared to 35.0 percent last year. Net income for the
fiscal year included $96.7 million, net of taxes, related to the
expensing of stock options and a $9.6 million benefit, net of taxes, for
settling the Converse arbitration ruling for less than the amount
accrued in fiscal 2006. Excluding these two items diluted earnings per
share for the fiscal year would have increased 15 percent to $3.10
compared to $2.70 last year.
Balance Sheet Review
At the end of the fiscal year, global inventories stood at $2.1
billion, an increase of 2 percent from May 31, 2006. Cash and
short-term investments were $2.8 billion at the end of the fiscal year,
compared to $2.3 billion last year.
Share Repurchase
During the fourth quarter, the Company purchased a total of 5,255,600
shares for approximately $281.2 million in conjunction with the
Company's four-year, $3 billion share repurchase program approved by the
Board of Directors in June 2006. For the fiscal year, the Company
purchased 18,063,752 shares for approximately $812.7 million under this
program and 4,017,448 shares for approximately $162.6 million under its
previous four-year $1.5 billion share repurchase program approved by the
Board of Directors in June 2004.
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 subsidiaries include
Cole Haan Holdings Incorporated, a leading designer and marketer of
luxury shoes, handbags, accessories and coats; Converse Inc., which
designs, markets and distributes athletic footwear, apparel and
accessories; Exeter Brands Group LLC, which designs and markets athletic
footwear and apparel for the value retail channel; Hurley International
LLC, which designs, markets and distributes action sports and youth
lifestyle footwear, apparel and accessories and NIKE Bauer Hockey Inc., a
leading designer and distributor of hockey equipment.
NIKE's earnings releases and other financial information are available on the Internet at www.nikebiz.com/invest.
* 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 NIKE with the S.E.C., including Forms 8-K,
10-Q, and 10-K. Some forward-looking statements in this release concern
changes in futures orders that are not necessarily indicative of changes
in total revenues for subsequent periods due to the mix of futures and
“at once” orders, exchange rate fluctuations, order cancellations and
discounts, which may vary significantly from quarter to quarter, and
because a significant portion of the business does not report futures
orders.
View release and financial tables (PDF 43kb)