NIKE, Inc. Reports Fiscal 2024 Fourth Quarter and Full Year Results
NIKE (NYSE:NKE) reported its fiscal 2024 fourth quarter and full-year results. Full-year revenues were $51.4 billion, a slight increase from the prior year's $51.2 billion. However, fourth-quarter revenues declined by 2% to $12.6 billion. NIKE Direct revenues dropped by 8% in Q4, while wholesale revenues increased by 5%. The gross margin for the fourth quarter rose by 110 basis points to 44.7%, primarily due to strategic pricing and reduced logistics costs. Selling and administrative expenses decreased by 7%, while net income surged by 45% to $1.5 billion, resulting in a diluted EPS of $0.99. For the full year, net income rose by 12% to $5.7 billion, with a diluted EPS of $3.73. NIKE returned $6.4 billion to shareholders through dividends and share repurchases in fiscal 2024.
- Full-year revenues increased to $51.4 billion, up 1% on a currency-neutral basis.
- Wholesale revenues for Q4 were up 5% on a reported basis and 8% on a currency-neutral basis.
- Gross margin for Q4 increased by 110 basis points to 44.7%.
- Net income for Q4 surged by 45% to $1.5 billion.
- Diluted EPS for Q4 was $0.99.
- Full-year net income rose by 12% to $5.7 billion.
- NIKE returned $6.4 billion to shareholders in fiscal 2024 through dividends and share repurchases.
- Fourth-quarter revenues declined by 2% to $12.6 billion.
- NIKE Direct revenues for Q4 fell by 8% on a reported basis and 7% on a currency-neutral basis.
- Revenues for Converse dropped by 18% in Q4.
- Selling and administrative expenses increased by 1% for the full year.
NIKE's Financial Performance
Analyzing NIKE's financial results, we see an overall stable revenue with full-year revenues standing at
NIKE Direct revenues declined by
Net income surged by
While NIKE faces challenges such as declining digital sales and regional revenue drops, the company’s ability to enhance margins and maintain profitability is encouraging. Investors should remain cautious about the regional sales drop, especially in North America, but recognize the company's strong cost management and profitability improvements.
Market Dynamics and Consumer Behavior
The revenue fluctuations highlight several key trends. Firstly, the decline in digital sales by
Regional performance is mixed: NIKE has seen currency-neutral growth in Greater China, APLA and EMEA but a notable decline in North America. This disparity could be driven by differing economic conditions or competitive landscapes. Greater China’s growth might be reflective of a recovering economy and increasing sportswear demand post-pandemic.
For retail investors, the critical takeaway is the resilience in international markets contrasted by challenges in North America. Understanding these regional dynamics and their drivers can inform future investment decisions.
-
Full year revenues were
$51.4 billion $51.2 billion -
Fourth quarter revenues were
$12.6 billion -
NIKE Direct revenues for the fourth quarter were
$5.1 billion -
Wholesale revenues for the fourth quarter were
$7.1 billion - Gross margin for the fourth quarter increased 110 basis points to 44.7 percent
-
Diluted earnings per share was
$0.99
"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 -
Revenues for the NIKE Brand were
$12.1 billion Greater China , APLA and EMEA, partially offset by a decline inNorth America . -
NIKE Direct revenues were
$5.1 billion -
Wholesale revenues for the fourth quarter were
$7.1 billion -
Revenues for Converse were
$480 million North America andWestern Europe .
-
Revenues for the NIKE Brand were
- 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 -
Operating overhead expense decreased 9 percent to
$3.0 billion $39 million
-
Demand creation expense was
- 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 $0.99 $0.02 $1.01
Fiscal 2024 Income Statement Review
-
Revenues for NIKE, Inc. were
$51.4 billion $51.2 billion -
Revenues for the NIKE Brand were
$49.3 billion Greater China and APLA, partially offset by a decline inNorth America . -
NIKE Direct revenues were
$21.5 billion -
Wholesale revenues were
$27.8 billion -
Revenues for Converse were
$2.1 billion North America andWestern Europe .
-
Revenues for the NIKE Brand were
- 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 $379 million -
Demand creation expense was
$4.3 billion -
Operating overhead expense was
$12.3 billion
-
Demand creation expense was
- 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 $3.73 $0.22 $3.95
May 31, 2024 Balance Sheet Review
-
Inventories for NIKE, Inc. were
$7.5 billion -
Cash and equivalents and short-term investments were
$11.6 billion $0.9 billion
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
-
Dividends of
$560 million -
Share repurchases of
$1.0 billion $18 billion
In fiscal 2024, the Company returned approximately
-
Dividends of
$2.2 billion -
Share repurchases of
$4.3 billion $18 billion
As of May 31, 2024, a total of 84.9 million shares have been repurchased under the current program for a total of approximately
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.
About NIKE, Inc.
NIKE, Inc., based near
* |
Non-GAAP financial measures. See additional information in the accompanying Divisional Revenues, Supplemental NIKE Brand Revenue and Diluted earnings per share tables. |
** |
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 |
NIKE, Inc. |
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CONSOLIDATED STATEMENTS OF INCOME |
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(Unaudited) |
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|
|
|
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|
|
|
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THREE MONTHS ENDED |
% |
TWELVE MONTHS ENDED |
% |
||||||||||
(In millions, except per share data) |
5/31/2024 |
5/31/2023 |
Change |
5/31/2024 |
5/31/2023 |
Change |
||||||||
Revenues |
$ |
12,606 |
|
$ |
12,825 |
|
- |
$ |
51,362 |
|
$ |
51,217 |
|
|
Cost of sales |
|
6,972 |
|
|
7,230 |
|
- |
|
28,475 |
|
|
28,925 |
|
- |
Gross profit |
|
5,634 |
|
|
5,595 |
|
|
|
22,887 |
|
|
22,292 |
|
|
Gross margin |
|
44.7 |
% |
|
43.6 |
% |
|
|
44.6 |
% |
|
43.5 |
% |
|
|
|
|
|
|
|
|
||||||||
Demand creation expense |
|
1,091 |
|
|
1,092 |
|
|
|
4,285 |
|
|
4,060 |
|
|
Operating overhead expense |
|
2,997 |
|
|
3,282 |
|
- |
|
12,291 |
|
|
12,317 |
|
|
Total selling and administrative expense |
|
4,088 |
|
|
4,374 |
|
- |
|
16,576 |
|
|
16,377 |
|
|
% of revenues |
|
32.4 |
% |
|
34.1 |
% |
|
|
32.3 |
% |
|
32.0 |
% |
|
|
|
|
|
|
|
|
||||||||
Interest expense (income), net |
|
(53 |
) |
|
(28 |
) |
— |
|
(161 |
) |
|
(6 |
) |
— |
Other (income) expense, net |
|
(127 |
) |
|
3 |
|
— |
|
(228 |
) |
|
(280 |
) |
— |
Income before income taxes |
|
1,726 |
|
|
1,246 |
|
|
|
6,700 |
|
|
6,201 |
|
|
Income tax expense |
|
226 |
|
|
215 |
|
|
|
1,000 |
|
|
1,131 |
|
- |
Effective tax rate |
|
13.1 |
% |
|
17.3 |
% |
|
|
14.9 |
% |
|
18.2 |
% |
|
|
|
|
|
|
|
|
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NET INCOME |
$ |
1,500 |
|
$ |
1,031 |
|
|
$ |
5,700 |
|
$ |
5,070 |
|
|
|
|
|
|
|
|
|
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Earnings per common share: |
|
|
|
|
|
|
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Basic |
$ |
0.99 |
|
$ |
0.67 |
|
|
$ |
3.76 |
|
$ |
3.27 |
|
|
Diluted |
$ |
0.99 |
|
$ |
0.66 |
|
|
$ |
3.73 |
|
$ |
3.23 |
|
|
|
|
|
|
|
|
|
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Weighted average common shares outstanding: |
|
|
|
|
|
|
||||||||
Basic |
|
1,508.0 |
|
|
1,536.5 |
|
|
|
1,517.6 |
|
|
1,551.6 |
|
|
Diluted |
|
1,516.7 |
|
|
1,556.3 |
|
|
|
1,529.7 |
|
|
1,569.8 |
|
|
|
|
|
|
|
|
|
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Dividends declared per common share |
$ |
0.370 |
|
$ |
0.340 |
|
|
$ |
1.450 |
|
$ |
1.325 |
|
|
NIKE, Inc. |
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