#Retail & Brands
NIKE reports fiscal 2024 first quarter results
• First quarter revenues were $12.9 billion, up 2 percent compared to prior year on a reported and currency-neutral basis*
• NIKE Direct revenues were $5.4 billion, up 6 percent compared to prior year on a reported and currency-neutral basis with growth across all geographies
• NIKE Brand Digital sales increased 2 percent on a reported and currency-neutral basis
• Wholesale revenues were $7.0 billion, flat compared to prior year on a reported basis and up 1 percent on a currency-neutral basis
• Gross margin decreased 10 basis points to 44.2 percent
• Diluted earnings per share was $0.94 for the first quarter, up 1 percent
Matthew Friend, Executive Vice President & Chief Financial Officer, NIKE, Inc. said, “Our first- quarter results demonstrated the impact of staying on the offense over the past fiscal year. With a healthy marketplace and another quarter of brand and business momentum, we are strengthening our foundation for sustainable, profitable, long-term growth.”**
First Quarter Income Statement Review
• Revenues for NIKE, Inc. increased 2 percent on a reported and currency-neutral basis to $12.9 billion compared to the prior year.
• Revenues for the NIKE Brand were $12.4 billion, up 3 percent on a reported and currency-neutral basis, led by currency-neutral growth in EMEA, Greater China and APLA, partially offset by a decline in North America.
• Revenues for Converse were $588 million, down 9 percent on a reported and currency-neutral basis, due to a decline in North America, partially offset by growth in Asia.
• Gross margin decreased 10 basis points to 44.2 percent, primarily driven by higher product costs and unfavorable changes in net foreign currency exchange rates, largely offset by strategic pricing actions.
• Selling and administrative expense increased 5 percent to $4.1 billion.
• Demand creation expense was $1.1 billion, up 13 percent, primarily due to advertising and marketing expense.
• Operating overhead expense increased 2 percent to $3.0 billion, primarily due to wage- related expenses and NIKE Direct variable costs, partially offset by lower technology spend.
• The effective tax rate was 12.0 percent compared to 19.7 percent for the same period last year primarily due to a one-time benefit provided by the recent delay of the effective date of U.S. foreign tax regulations.
• Net income was $1.5 billion, down 1 percent, and Diluted earnings per share was $0.94, increasing 1 percent.
August 31, 2023 Balance Sheet Review
• Inventories for NIKE, Inc. were $8.7 billion, down 10 percent compared to the prior year, primarily driven by a decrease in units, partially offset by product mix and higher product input costs.
• Cash and equivalents and short-term investments were $8.8 billion, down approximately $3.1 billion from last year, as cash generated by operations was more than offset by share repurchases, cash dividends and capital expenditures.
Shareholder Returns
NIKE continues to have a strong track record of investing to fuel growth and consistently increasing returns to shareholders, including 21 consecutive years of increasing dividend payouts. In the first quarter, NIKE returned approximately $1.7 billion to shareholders, including:
• Dividends of $524 million, up 9 percent from the prior year.
• Share repurchases of $1.1 billion, reflecting 10.5 million shares retired as part of the Company’s four-year, $18 billion program approved by the Board of Directors in June 2022. As of August 31, 2023, a total of 54 million shares have been repurchased under the program for a total of approximately $5.9 billion.
Conference Call
NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on September 28, 2023, to review fiscal first quarter results. The conference call will be broadcast live via the internet and can be accessed at https://investors.nike.com. For those unable to listen to the live broadcast, an archived version will be available at the same location through approximately 11:00 p.m. PT, October 19, 2023.
