Fiscal Year Revenue Up 14 Percent, Earnings Per Share Up 28
Percent
Worldwide Futures Orders Up 11 Percent
BEAVERTON, Ore.--(BUSINESS WIRE)--June 25, 2008--NIKE, Inc.
(NYSE:NKE) today reported financial results for the 2008 fiscal year
ended May 31, 2008. For the fiscal year, revenues grew 14 percent to
$18.6 billion, compared to $16.3 billion last year. Net income
increased 26 percent to $1.9 billion, compared to $1.5 billion last
year, and diluted earnings per share increased 28 percent to $3.74
versus $2.93 last year. For the fourth quarter, revenues increased 16
percent to $5.1 billion, compared to $4.4 billion for the same period
last year. Fourth quarter net income increased 12 percent to $490.5
million, compared to $437.9 million in the prior year, and diluted
earnings per share increased 14 percent to $0.98, versus $0.86 last
year. Changes in currency exchange rates increased revenue growth by 5
percentage points for the full year and 7 percentage points for the
fourth quarter.
Nike turned in another strong performance in fiscal year 2008.
The power and strength of the Nike brand as well as the depth and
diversity of the NIKE, Inc. portfolio produced solid sales growth
across all geographies and key product platforms, said Mark Parker,
President and CEO of NIKE, Inc. By continuing to deliver compelling
consumer experiences, backed by strong operational execution, we're
confident we can deliver long-term profitable growth and create value
for our shareholders.(a)
Going forward we are going to play to those strengths and
continue to invest in product innovation, deep brand connections,
improved retail presentation, and operational effectiveness. Our focus
is on working stronger, leaner and smarter through uncertain
macroeconomic conditions to maximize our unique potential as a leader
and innovator, Parker continued. As we complete fiscal 2008, we are
better positioned than we ever have been.(a)
Futures Orders
The Company reported worldwide futures orders for athletic
footwear and apparel, scheduled for delivery from June 2008 through
November 2008, totaling $8.8 billion, 11 percent higher than such
orders reported for the same period last year. Changes in currency
exchange rates increased reported orders growth by 3 percentage
points.(a)
By region, futures orders for the U.S. were flat to last year;
Europe (which includes the Middle East and Africa) increased 10
percent; Asia Pacific grew 31 percent; and the Americas increased 30
percent. Changes in currency exchange rates increased reported futures
orders growth in Europe by 6 percentage points; by 7 percentage points
in the Asia Pacific region; and by 1 percentage point in the Americas
region.(a)
Regional Highlights
U.S.
During the fourth quarter, U.S. revenues increased 4 percent to
$1.7 billion versus $1.6 billion for the same period last year.
Footwear revenues increased 6 percent to $1.1 billion. Apparel
revenues increased 2 percent to $447.9 million. Equipment revenues
decreased 15 percent to $78.2 million. U.S. pre-tax income declined 10
percent to $390.7 million.
For the full fiscal year, U.S. revenues were up 4 percent to $6.4
billion. Footwear revenues increased 6 percent to $4.3 billion,
apparel revenues grew 2 percent to $1.7 billion and equipment revenues
decreased 5 percent to $306.1 million. U.S. pre-tax income increased 2
percent to $1.4 billion for the fiscal year.
Europe
Fourth quarter revenues for the European region grew 19 percent to
$1.5 billion from $1.3 billion for the same period last year. Changes
in currency exchange rates increased revenue growth by 15 percentage
points. Footwear revenues increased 17 percent to $889.2 million.
Apparel revenues grew by 22 percent to $531.1 million and equipment
revenues increased 16 percent to $113.9 million. Fourth quarter
pre-tax income increased 8 percent to $326.2 million.
Full fiscal year European revenues grew 19 percent to $5.6
billion. Changes in currency exchange rates increased revenue growth
by 11 percentage points. Footwear revenues were up 19 percent to $3.1
billion, apparel revenues increased 19 percent to $2.1 billion and
equipment revenues grew 18 percent to $424.3 million. European fiscal
year pre-tax income increased 22 percent to $1.3 billion.
Asia Pacific
Fourth quarter revenues for the Asia Pacific region grew 39
percent to $828.0 million compared to $596.9 million a year ago.
Changes in currency exchange rates increased revenue growth by 13
percentage points. Footwear revenues were up 42 percent to $422.0
million, apparel revenues increased 40 percent to $337.7 million and
equipment revenues grew 14 percent to $68.3 million. Fourth quarter
pre-tax income increased 32 percent to $166.0 million.
For the full fiscal year, Asia Pacific revenues increased 26
percent to $2.9 billion, compared to $2.3 billion last year. Changes
in currency exchange rates increased revenue growth by 6 percentage
points. Footwear revenues were $1.5 billion, up 29 percent from $1.2
billion last year, apparel revenues increased 25 percent to $1.1
billion and equipment revenues grew 13 percent to $242.2 million.
Pre-tax income increased 36 percent to $692.6 million for the fiscal
year.
Americas
Fourth quarter revenues in the Americas region increased 30
percent to $306.6 million compared to the same period last year.
Changes in currency exchange rates increased revenue growth by 11
percentage points. Footwear revenues were up 19 percent to $202.1
million, apparel revenues increased 77 percent to $78.9 million and
equipment revenues rose 22 percent to $25.6 million. Pre-tax income
was up 53 percent to $60.8 million for the quarter.
Full fiscal year revenues for the Americas region grew 21 percent
to $1.2 billion; 7 percentage points of this growth was the result of
changes in currency exchange rates. Footwear revenues increased 17
percent to $792.7 million, apparel revenues increased 37 percent to
$265.4 million and equipment revenues rose 22 percent to $96.0
million. Pre-tax income increased 24 percent for the fiscal year to
$239.3 million.
Other Businesses
For the fourth quarter, Other business revenues, which include,
Converse Inc., NIKE Golf, Cole Haan, NIKE Bauer Hockey, Hurley
International LLC, and Umbro Ltd. grew 15 percent to $749.5 million
and pre-tax income was up 2 percent to $92.9 million. For the fiscal
year, Other business revenues increased 15 percent to $2.6 billion and
pre-tax income increased 12 percent to $336.4 million.
In fiscal 2008, following a strategic review of the Company's
affiliate brands portfolio, the Company made a number of changes.
During the year, the Company completed the divestiture of the Starter
brand and NIKE Bauer Hockey and the acquisition of Umbro. The Starter
brand was sold for $60 million in cash resulting in a gain of $29
million, which was included in third quarter Other income and expense.
NIKE Bauer Hockey was sold for $189 million in cash resulting in a
gain of $32 million, which was included in fourth quarter Other income
and expense. As part of the sale, the Company licensed the limited use
of certain Company trademarks for a period of two years. Accordingly,
$41 million of the sales price was deferred and will be recognized in
Other income and expense over the license period. The acquisition of
Umbro was completed in the fourth quarter for total consideration of
GBP 290.5 million (approximately $576 million), inclusive of
transaction fees.
Income Statement Review
In the fourth quarter of fiscal 2008 gross margins were 45.8
percent compared to 43.8 percent for the same period last year. For
the fiscal year, gross margins were 45.0 percent compared to 43.9
percent last year.
Selling and administrative expenses were 33.1 percent of fourth
quarter revenue compared to 29.0 percent for the same period last
year. For the fiscal year, selling and administrative expenses as a
percent of revenue were 32.0 percent versus 30.8 percent last year.
The effective tax rate for the fourth quarter was 24.3 percent
compared to 33.5 percent for the same period last year, benefiting
from a larger proportion of earnings coming from outside the United
States where the Company benefits from lower tax rates. For the fiscal
year, the effective tax rate was 24.8 percent compared to 32.2 percent
last year; reflecting a one-time tax benefit related to utilization of
past foreign losses that contributed $0.21 per diluted share, as well
as continued improvements in the tax efficiency of the Company's
global operations.
Balance Sheet Review
At the end of the fiscal year, global inventories stood at $2.4
billion, an increase of 15 percent from May 31, 2007. Cash and
short-term investments were comparable to the end of last fiscal year
at $2.8 billion.
Share Repurchase
During the fourth quarter, the Company purchased a total of
4,447,605 shares for approximately $290 million in conjunction with
the Company's four-year, $3 billion share repurchase program approved
by the Board of Directors in June 2006. As of the end of the fiscal
year, the Company has purchased a total of 38,646,058 shares for
approximately $2.1 billion under this program.
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 Converse
Inc., which designs, markets and distributes athletic footwear,
apparel and accessories; Cole Haan, which designs, markets and
distributes luxury shoes, handbags, accessories and coats; Hurley
International LLC, which designs, markets and distributes action
sports and youth lifestyle footwear, apparel and accessories; and
Umbro Ltd., a leading United Kingdom-based global football (soccer)
brand. For more information, visit nikebiz.com.
NIKE's earnings releases and other financial information are
available on the Internet at www.nikebiz.com/investors.
(a) 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.
(Tables Follow)
NIKE, Inc.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 31, 2008
(In millions, except per share data)
QUARTER ENDED YEAR TO DATE ENDED
INCOME % %
STATEMENT 05/31/2008 05/31/2007 Chg 05/31/2008 05/31/2007 Chg
======================================================================
Revenues $5,088.0 $ 4,383.2 16% $ 18,627.0 $16,325.9 14%
Cost of sales 2,756.6 2,464.2 12% 10,239.6 9,165.4 12%
----------------------- ----------------------
Gross margin 2,331.4 1,919.0 21% 8,387.4 7,160.5 17%
45.8% 43.8% 45.0% 43.9%
Selling
and
administrative
expense 1,686.3 1,272.0 33% 5,953.7 5,028.7 18%
33.1% 29.0% 32.0% 30.8%
Interest
income, net 10.7 24.2 -56% 77.1 67.2 15%
Other income
(expense), net (7.5) (12.4) 40% (7.9) 0.9 -978%
----------------------- ----------------------
Income before
income taxes 648.3 658.8 -2% 2,502.9 2,199.9 14%
Income taxes 157.8 220.9 -29% 619.5 708.4 -13%
----------------------- ----------------------
24.3% 33.5% 24.8% 32.2%
Net income $490.5 $ 437.9 12% $ 1,883.4 $ 1,491.5 26%
======================= ======================
Diluted EPS $0.98 $ 0.86 14% $ 3.74 $ 2.93 28%
Basic EPS $1.00 $ 0.87 15% $ 3.80 $ 2.96 28%
Weighted Average Common Shares
Outstanding:
Diluted 500.1 510.2 504.1 509.9
Basic 491.4 502.8 495.6 503.8
======================= ======================
Dividends
declared $0.23 $ 0.185 $ 0.875 $ 0.71
======================= ======================
NIKE, Inc.
BALANCE SHEET 05/31/2008 05/31/2007
======================================================================
(In millions)
ASSETS
Current assets:
Cash and equivalents $ 2,133.9 $ 1,856.7
Short-term investments 642.2 990.3
Accounts receivable, net 2,795.3 2,494.7
Inventories 2,438.4 2,121.9
Deferred income taxes 227.2 219.7
Prepaid expenses and other current assets 602.3 393.2
-----------------------
Total current assets 8,839.3 8,076.5
Property, plant and equipment 4,103.0 3,619.1
Less accumulated depreciation 2,211.9 1,940.8
-----------------------
Property, plant and equipment, net 1,891.1 1,678.3
Identifiable intangible assets, net 743.1 409.9
Goodwill 448.8 130.8
Deferred income taxes and other assets 520.4 392.8
-----------------------
Total assets $ 12,442.7 $ 10,688.3
=======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 6.3 $ 30.5
Notes payable 177.7 100.8
Accounts payable 1,287.6 1,040.3
Accrued liabilities 1,761.9 1,303.4
Income taxes payable 88.0 109.0
-----------------------
Total current liabilities 3,321.5 2,584.0
Long-term debt 441.1 409.9
Deferred income taxes and other liabilities 854.5 668.7
Redeemable preferred stock 0.3 0.3
Shareholders' equity 7,825.3 7,025.4
-----------------------
Total liabilities and shareholders' equity $ 12,442.7 $ 10,688.3
=======================
NIKE, Inc.
QUARTER ENDED YEAR TO DATE ENDED
DIVISIONAL % %
REVENUES 05/31/2008 05/31/2007 Chg 05/31/2008 05/31/2007 Chg
======================================================================
(In millions)
U.S. Region
Footwear $ 1,143.6 $ 1,080.8 6% $ 4,326.8 $ 4,067.2 6%
Apparel 447.9 437.9 2% 1,745.1 1,716.1 2%
Equipment 78.2 91.5 -15% 306.1 323.8 -5%
----------------------- -----------------------
Total 1,669.7 1,610.2 4% 6,378.0 6,107.1 4%
EMEA Region
Footwear 889.2 757.1 17% 3,112.6 2,608.0 19%
Apparel 531.1 436.0 22% 2,083.5 1,757.2 19%
Equipment 113.9 98.3 16% 424.3 358.1 18%
----------------------- -----------------------
Total 1,534.2 1,291.4 19% 5,620.4 4,723.3 19%
Asia Pacific
Region
Footwear 422.0 296.4 42% 1,499.5 1,159.2 29%
Apparel 337.7 240.4 40% 1,140.0 909.3 25%
Equipment 68.3 60.1 14% 242.2 214.9 13%
----------------------- -----------------------
Total 828.0 596.9 39% 2,881.7 2,283.4 26%
Americas
Region
Footwear 202.1 169.4 19% 792.7 679.6 17%
Apparel 78.9 44.7 77% 265.4 193.9 37%
Equipment 25.6 20.9 22% 96.0 79.0 22%
----------------------- -----------------------
Total 306.6 235.0 30% 1,154.1 952.5 21%
----------------------- -----------------------
4,338.5 3,733.5 16% 16,034.2 14,066.3 14%
----------------------- -----------------------
----------------------- -----------------------
Other 749.5 649.7 15% 2,592.8 2,259.6 15%
----------------------- -----------------------
----------------------- -----------------------
Total NIKE,
Inc.
revenues $ 5,088.0 $ 4,383.2 16% $ 18,627.0 $ 16,325.9 14%
----------------------- -----------------------
NIKE, Inc.
QUARTER ENDED % YEAR TO DATE ENDED %
PRE-TAX
INCOME(1,2) 05/31/2008 05/31/2007 Chg 05/31/2008 05/31/2007 Chg
======================================================================
(in millions)
U.S. Region $ 390.7 $ 433.1 -10% $ 1,391.9 $ 1,367.3 2%
EMEA Region 326.2 302.2 8% 1,266.2 1,036.2 22%
Asia Pacific
Region 166.0 125.5 32% 692.6 508.3 36%
Americas
Region 60.8 39.8 53% 239.3 192.7 24%
Other 92.9 91.2 2% 336.4 299.7 12%
Corporate(3) (388.3) (333.0)-17% (1,423.5) (1,204.3)-18%
------------------------ ------------------------
Total pre-tax
income(1) $ 648.3 $ 658.8 -2% $ 2,502.9 $ 2,199.9 14%
======================== ========================
-------------------------------------
(1) The Company evaluates performance of individual operating segments
based on pre-tax income. Total pre-tax income equals Income before
income taxes as shown on the Consolidated Income Statement.
(2) Certain prior year amounts have been reclassified to conform to
fiscal year 2008 presentation. These changes had no impact on
previously reported results of operations or shareholders' equity.
(3) Corporate represents items necessary to reconcile to total pre-
tax income, which includes corporate costs that are not allocated to
the operating segments for management reporting and intercompany
eliminations for specific items in the Consolidated Income Statement.
CONTACT: NIKE, Inc.
MEDIA CONTACT
Kellie Leonard, 503-671-6171
or
INVESTOR CONTACT
Pamela Catlett, 503-671-4589
SOURCE: NIKE, Inc.