- Fourth quarter revenues up 5 percent to
$7.8 billion; 13 percent growth excluding currency changes
- Fourth quarter diluted earnings per
share up 26 percent to $0.98
- Fiscal 2015 revenues up 10 percent to
$30.6 billion; 14 percent growth excluding currency changes
- Fiscal 2015 diluted earnings per share
up 25 percent to $3.70
- Worldwide futures orders up 2 percent;
13 percent growth excluding currency changes
- Inventories as of May 31, 2015 up 10
percent
NIKE, Inc. (NYSE:NKE) today reported fiscal 2015 financial
results for its fourth quarter and full year ended May 31, 2015.
Diluted earnings per share for the quarter increased 26 percent as
broad-based revenue growth, gross margin expansion and a lower tax
rate more than offset increased SG&A investments.
Fiscal 2015 diluted earnings per share rose 25 percent to $3.70,
reflecting 10 percent revenue growth, gross margin expansion, a
lower tax rate and a lower average share count, which more than
offset the impacts of higher SG&A investments.
“Fiscal 2015 was an outstanding year for NIKE,” said Mark
Parker, President and CEO, NIKE, Inc. “Our consistent growth is
fueled by our connection to the consumer and our ability to deliver
innovation at an unprecedented pace and scale. At no time in our
history has the growth potential been greater for NIKE.”*
Fourth Quarter Income Statement Review
- Revenues for NIKE, Inc. rose 5
percent to $7.8 billion, up 13 percent on a currency-neutral basis.
- Revenues for the NIKE Brand were $7.4
billion, up 13 percent on a currency-neutral basis driven by growth
in nearly every geography and key category except Emerging Markets
and Global Football.
- Revenues for Converse were $435
million, up 14 percent on a currency-neutral basis, mainly driven
by market transitions to direct distribution in AGS (Austria,
Germany and Switzerland) and strong performance in the United
States.
- Gross margin expanded 60 basis
points to 46.2 percent. The increase was primarily attributable to
higher average selling prices and continued growth in the higher
margin Direct to Consumer (DTC) business, partially offset by
higher product input and logistics costs.
- Selling and administrative
expense increased 6 percent to $2.6 billion. Demand creation
expense was $819 million, down 7 percent, reflecting higher
investment in support of the World Cup in the fourth quarter of
fiscal 2014. Operating overhead expense increased 13 percent to
$1.8 billion, reflecting continued growth in the DTC business and
targeted investments in infrastructure and consumer-focused digital
capabilities.
- Other income, net was $58
million, comprised primarily of net foreign currency exchange
gains. For the quarter, the Company estimates the year-over-year
change in foreign currency-related gains and losses included in
other income, net, combined with the impact of changes in exchange
rates on the translation of foreign currency-denominated profits,
decreased pretax income by approximately $37 million.
- The effective tax rate was 17.8
percent, compared to 23.5 percent for the same period last year,
primarily due to adjustments to reduce tax expense recognized in
interim quarters of fiscal 2015 on intercompany transactions.
- Net income increased 24 percent
to $865 million while diluted earnings per share increased
26 percent to $0.98, reflecting strong revenue growth and gross
margin expansion, a lower tax rate and a decrease in the weighted
average diluted common shares outstanding.
Fiscal 2015 Income Statement Review
- Revenues for NIKE, Inc. rose 10
percent to $30.6 billion, up 14 percent on a currency-neutral
basis.
- Revenues for the NIKE Brand were $28.7
billion, up 14 percent excluding the impact of changes in foreign
currency.
- NIKE Brand sales to wholesale customers
increased 10 percent on a currency-neutral basis while DTC revenues
grew to $6.6 billion, up 29 percent excluding the impact of changes
in foreign currency, driven by 16 percent growth in comparable
store sales, a 59 percent increase in online sales and the addition
of new stores. As of May 31, 2015, the NIKE Brand had 832 DTC
stores in operation as compared to 768 a year ago.
- On a currency neutral basis, NIKE Brand
revenue growth was driven by growth in every geography, every key
category except Global Football and across the Women’s, Men’s and
Young Athletes’ businesses.
- Revenues for Converse were $2.0
billion, up 21 percent on a currency neutral basis, mainly driven
by market transitions to direct distribution in AGS and strong
performance in the United States.
- Gross margin expanded 120 basis
points to 46.0 percent. The increase was primarily due to higher
average selling prices and continued growth in the higher margin
DTC business, partially offset by higher product input and
logistics costs.
- Selling and administrative
expense grew 13 percent to $9.9 billion. Demand creation
expense was $3.2 billion, up 6 percent, due to an increase in
investments in support of key events and product launches, as well
as investments in DTC and sports marketing. Operating overhead
expense increased 16 percent to $6.7 billion due to the expanding
DTC business, higher costs for operational infrastructure and
investments in consumer-facing digital capabilities.
- Other income, net was $58
million for the fiscal year, mainly comprised of net foreign
currency exchange gains. For the year, the Company estimates the
year-over-year change in foreign currency-related gains and losses
included in other income, net, combined with the impact of changes
in currency exchange rates on the translation of foreign
currency-denominated profits, decreased pretax income by
approximately $73 million.
- The effective tax rate was 22.2
percent, compared to 24.0 percent for the same period last year,
primarily due to the favorable resolution of tax audits across
multiple jurisdictions.
- Net income increased 22 percent
to $3.3 billion reflecting strong revenue growth, gross margin
expansion and a lower tax rate. Diluted earnings per share
increased 25 percent to $3.70, reflecting the growth in net income
and the additional benefit of a decline in the weighted average
diluted common shares outstanding.
May 31, 2015 Balance Sheet Review
- Inventories for NIKE, Inc. were
$4.3 billion, up 10 percent from May 31, 2014, driven primarily by
a 13 percent increase in NIKE Brand wholesale unit
inventories. Changes in the average product cost per unit were
more than offset by changes in foreign currency exchange rates,
which together decreased NIKE, Inc. inventory growth by
approximately 3 percentage points.
- Cash and short-term investments
were $5.9 billion, $782 million higher than last year as growth in
net income and collateral received from counterparties as a result
of hedging activities more than offset share repurchases, higher
dividends and investments in working capital.
Share Repurchases
During the fourth quarter, NIKE, Inc. repurchased a total of 6.8
million shares for approximately $678 million as part of the
four-year, $8.0 billion program approved by the Board of Directors
in September 2012. As of the end of fiscal 2015, a total of 80.9
million shares had been repurchased under this program for
approximately $6.0 billion, at an average cost of $73.55 per
share.
Futures Orders
As of the end of the quarter, worldwide futures orders for NIKE
Brand athletic footwear and apparel scheduled for delivery from
June through November 2015 totaled $13.5 billion, 2 percent higher
than orders reported for the same period last year, and 13 percent
higher on a currency neutral basis.*
Conference Call
NIKE, Inc. management will host a conference call beginning at
approximately 2:00 p.m. PT on June 25, 2015, to review fiscal
fourth quarter and full year results. The conference call will be
broadcast live over 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 2, 2015.
About NIKE, Inc.
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, Inc. subsidiary brands
include Converse, which designs, markets and distributes athletic
lifestyle footwear, apparel and accessories, and Hurley, which
designs, markets and distributes surf and youth lifestyle footwear,
apparel and accessories. For more information, NIKE, Inc.’s
earnings releases and other financial information are available on
the Internet at http://investors.nike.com and individuals can
follow @Nike.
* 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, discounts and returns, which may
vary significantly from quarter to quarter, and because a portion
of the business does not report futures orders.
NIKE, Inc.
CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS
ENDED % TWELVE MONTHS ENDED % (Dollars in
millions, except per share data)
5/31/2015
5/31/2014 Change
5/31/2015 5/31/2014
Change Revenues $ 7,779 $ 7,425 5% $ 30,601 $ 27,799 10%
Cost of sales 4,186 4,040 4%
16,534 15,353 8% Gross profit
3,593 3,385 6% 14,067 12,446 13% Gross margin 46.2% 45.6% 46.0%
44.8% Demand creation expense 819 876 -7% 3,213 3,031 6%
Operating overhead expense 1,776 1,572
13% 6,679 5,735 16% Total
selling and administrative expense 2,595 2,448 6% 9,892 8,766 13% %
of revenue 33.4% 33.0% 32.3% 31.5% Interest expense
(income), net 4 8 - 28 33 - Other (income) expense, net
(58) 17 - (58)
103 - Income before income taxes 1,052 912 15% 4,205
3,544 19% Income taxes 187 214
-13% 932 851 10% Effective tax
rate 17.8% 23.5% 22.2% 24.0%
NET
INCOME $ 865 $ 698
24% $ 3,273 $
2,693 22% Earnings per common share:
Basic $ 1.01 $ 0.80 26% $ 3.80 $ 3.05 25% Diluted $ 0.98 $ 0.78 26%
$ 3.70 $ 2.97 25% Weighted average common shares
outstanding: Basic 857.5 873.7 861.7 883.4 Diluted 879.8 895.2
884.4 905.8 Dividends declared per common share $
0.28 $ 0.24 $ 1.08 $ 0.93
NIKE, Inc.
CONSOLIDATED BALANCE SHEETS May 31, May
31, (Dollars in millions)
2015
2014 % Change ASSETS Current assets:
Cash and equivalents $ 3,852 $ 2,220 74% Short-term investments
2,072 2,922 -29% Accounts receivable, net 3,358 3,434 -2%
Inventories 4,337 3,947 10% Deferred income taxes 389 355 10%
Prepaid expenses and other current assets 1,968
818 141% Total current assets
15,976 13,696 17% Property, plant and equipment 6,395 6,220 3% Less
accumulated depreciation 3,384
3,386 0% Property, plant and equipment, net 3,011
2,834 6% Identifiable intangible assets, net 281 282 0% Goodwill
131 131 0% Deferred income taxes and other assets
2,201 1,651 33%
TOTAL
ASSETS $ 21,600 $
18,594 16% LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Current portion of
long-term debt $ 107 $ 7 1429% Notes payable 74 167 -56% Accounts
payable 2,131 1,930 10% Accrued liabilities 3,951 2,491 59% Income
taxes payable 71 432
-84% Total current liabilities 6,334 5,027 26% Long-term
debt 1,079 1,199 -10% Deferred income taxes and other liabilities
1,480 1,544 -4% Redeemable preferred stock - - - Shareholders'
equity 12,707 10,824
17%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 21,600 $ 18,594
16%
NIKE, Inc. DIVISIONAL REVENUES
% Change
% Change
Excluding
Excluding
THREE MONTHS ENDED %
Currency
TWELVE MONTHS ENDED %
Currency
(Dollars in millions)
5/31/2015
5/31/2014
Change
Changes1
5/31/2015 5/31/2014
Change
Changes1
North America Footwear $ 2,317 $ 2,036 14% 14% $ 8,506 $
7,495 13% 14% Apparel 1,187 1,017 17% 17% 4,410 3,937 12% 12%
Equipment 228 241 -5% -5%
824 867 -5% -5% Total
3,732 3,294 13% 14% 13,740 12,299 12% 12%
Western Europe
Footwear 900 884 2% 23% 3,876 3,299 17% 25% Apparel 310 366 -15% 2%
1,555 1,427 9% 14% Equipment 57 62
-8% 9% 278 253 10%
15% Total 1,267 1,312 -3% 17% 5,709 4,979 15% 21%
Central
& Eastern Europe Footwear 237 219 8% 33% 827 763 8% 22%
Apparel 101 129 -22% -3% 495 532 -7% 5% Equipment 22
22 0% 20% 95
92 3% 14% Total 360 370 -3% 20% 1,417 1,387 2%
15%
Greater China Footwear 551 434 27% 29% 2,016 1,600 26%
28% Apparel 245 235 4% 6% 925 876 6% 7% Equipment 33
33 0% 0% 126
126 0% 1% Total 829 702 18% 20% 3,067 2,602
18% 19%
Japan Footwear 145 128 13% 33% 452 409 11% 23%
Apparel 63 75 -16% -1% 230 276 -17% -8% Equipment 22
23 -4% 7% 73
86 -15% -6% Total 230 226 2% 19% 755 771 -2%
9%
Emerging Markets Footwear 631 701 -10% 1% 2,641 2,642 0%
9% Apparel 249 313 -20% -12% 1,021 1,061 -4% 5% Equipment
54 66 -18% -7% 236
246 -4% 5% Total 934 1,080 -14% -3%
3,898 3,949 -1% 8%
Global Brand Divisions2
30 36 -17% 4% 115
125 -8% -2%
Total NIKE Brand
7,382 7,020 5% 13%
28,701 26,112 10% 14% Converse
435 410 6% 14% 1,982 1,684 18% 21% Corporate3 (38)
(5) - - (82)
3 - -
Total NIKE, Inc. Revenues
$ 7,779 $ 7,425 5% 13% $ 30,601
$ 27,799 10% 14%
Total NIKE Brand
Footwear $ 4,781 $ 4,402 9% 17% $ 18,318 $ 16,208 13% 17% Apparel
2,155 2,135 1% 7% 8,636 8,109 6% 10% Equipment 416 447 -7% -2%
1,632 1,670 -2% 1% Global Brand Divisions2 30
36 -17% 4% 115 125
-8% -2%
1 Fiscal 2015 results have been restated
using fiscal 2014 exchange rates for the comparative period to
enhance the visibility of the underlying business trends excluding
the impact of translation arising from foreign currency exchange
rate fluctuations.
2 Global Brand Divisions revenues are
primarily attributable to NIKE Brand licensing businesses that are
not part of a geographic operating segment.
3 Corporate revenues primarily consist of
foreign currency revenue-related hedge gains and losses generated
by entities within the NIKE Brand geographic operating segments and
Converse through our centrally managed foreign exchange risk
management program.
NIKE, Inc.
SUPPLEMENTAL NIKE BRAND REVENUE DETAILS1
% Change
Excluding
YEAR ENDED %
Currency
(Dollars in millions)
5/31/2015
5/31/2014 Change
Changes2
NIKE Brand Revenues by: Sales to Wholesale Customers $
21,952 $ 20,683 6% 10% Sales Direct to Consumer 6,634 5,304 25% 29%
Global Brand Divisions3 115 125
-8% -2%
Total NIKE Brand Revenues $
28,701 $ 26,112 10%
14% NIKE Brand Revenues on a Wholesale
Equivalent Basis:4 Sales to Wholesale Customers $ 21,952
$ 20,683 6% 10% Sales from our Wholesale Operations to Direct to
Consumer Operations 3,881 3,107
25% 29%
Total NIKE Brand Wholesale Equivalent
Revenues $ 25,833 $
23,790 9% 13% NIKE
Brand Wholesale Equivalent Revenues by:4 Men's $ 14,694
$ 14,001 5% 9% Women's 5,724 4,971 15% 20% Young Athletes' 4,301
3,737 15% 19% Others5 1,114 1,081
3% 7%
Total NIKE Brand Wholesale Equivalent
Revenues $ 25,833 $
23,790 9% 13% NIKE
Brand Wholesale Equivalent Revenues by:4 Running $ 4,853
$ 4,623 5% 9% Basketball 3,715 3,119 19% 21% Football (Soccer)
2,246 2,413 -7% -2% Men’s Training 2,537 2,483 2% 4% Women’s
Training 1,279 1,145 12% 16% Action Sports 736 738 0% 4% Sportswear
6,596 5,742 15% 20% Golf 771 789 -2% 0% Others6 3,100
2,738 13% 17%
Total NIKE Brand
Wholesale Equivalent Revenues $ 25,833
$ 23,790 9% 13%
1Certain prior year amounts have been reclassified to
conform to fiscal 2015 presentation. These changes had no impact on
previously reported results of operations or shareholders' equity.
2Fiscal 2015 results have been restated using fiscal 2014 exchange
rates for the comparative period to enhance the visibility of the
underlying business trends excluding the impact of translation
arising from foreign currency exchange rate fluctuations. 3Global
Brand Divisions revenues are primarily attributable to NIKE Brand
licensing businesses that are not part of a geographic operating
segment. 4References to NIKE Brand wholesale equivalent revenues
are intended to provide context as to the total size of our NIKE
Brand market footprint if we had no Direct to Consumer operations.
NIKE Brand wholesale equivalent revenues consist of 1) sales to
external wholesale customers, and 2) internal sales from our
wholesale operations to our Direct to Consumer operations which are
charged at prices that are comparable to prices charged to external
wholesale customers. 5Others include all unisex products, equipment
and other products not allocated to Men's, Women's and Young
Athletes', as well as certain adjustments that are not allocated to
products designated by gender or age. 6Others include all other
categories and certain adjustments that are not allocated at the
category level.
NIKE, Inc. EARNINGS BEFORE INTEREST AND
TAXES1,2 THREE MONTHS ENDED
% TWELVE MONTHS ENDED % (Dollars in millions)
5/31/2015 5/31/2014
Change 5/31/2015
5/31/2014 Change North America $ 1,060 $ 888
19% $ 3,645 $ 3,077 18% Western Europe 277 192 44% 1,277 855 49%
Central & Eastern Europe 71 71 0% 247 279 -11% Greater China
266 215 24% 993 816 22% Japan 38 39 -3% 100 131 -24% Emerging
Markets 192 271 -29% 818 952 -14% Global Brand Divisions3
(626) (549) -14% (2,263)
(1,993) -14%
TOTAL NIKE BRAND
1,278 1,127 13%
4,817 4,117
17% Converse 80 94 -15% 517 496 4% Corporate4
(302) (301) 0% (1,101)
(1,036) -6%
TOTAL EARNINGS BEFORE INTEREST AND
TAXES $ 1,056 $ 920
15% $ 4,233 $
3,577 18% 1 The Company evaluates
performance of individual operating segments based on earnings
before interest and taxes (commonly referred to as “EBIT”), which
represents net income before interest expense (income), net and
income taxes.
2 Certain prior year amounts have been
reclassified to conform to fiscal 2015 presentation. These changes
had no impact on previously reported results of operations or
shareholders' equity.
3 Global Brand Divisions primarily
represent demand creation, operating overhead, information
technology and product creation and design expenses that are
centrally managed for the NIKE Brand. Revenues for Global Brand
Divisions are primarily attributable to NIKE Brand licensing
businesses that are not part of a geographic operating segment.
4 Corporate consists of unallocated
general and administrative expenses, which includes expenses
associated with centrally managed departments, depreciation and
amortization related to the Company’s corporate headquarters,
unallocated insurance and benefit programs, certain foreign
currency gains and losses, including certain hedge gains and
losses, corporate eliminations and other items.
NIKE, Inc. NIKE BRAND
REPORTED FUTURES GROWTH BY GEOGRAPHY1 As of May 31, 2015
Reported Futures Excluding Currency
Orders
Changes2
North America 13% 13% Western Europe -11% 14% Central & Eastern
Europe -9% 17% Greater China 20% 22% Japan 1% 20% Emerging Markets
-14% 2%
Total NIKE Brand Reported
Futures 2% 13% 1 Futures orders for
NIKE Brand footwear and apparel scheduled for delivery from June
2015 through November 2015. The U.S. Dollar futures orders amount
is calculated based upon our internal forecast of the currency
exchange rates under which our revenues will be translated during
this period. The reported futures orders growth is not necessarily
indicative of our expectation of revenue growth during this period.
This is due to year-over-year changes in shipment timing, changes
in the mix of orders between futures and at-once orders and because
the fulfillment of certain orders may fall outside of the schedule
noted above. In addition, exchange rate fluctuations as well as
differing levels of order cancellations, discounts and returns can
cause differences in the comparisons between futures orders and
actual revenues. Moreover, a portion of our revenue is not derived
from futures orders, including at-once and closeout sales of NIKE
Brand footwear and apparel, sales of NIKE Brand equipment, sales
from our DTC operations and sales from Converse, NIKE Golf and
Hurley. 2 Reported futures have been restated using prior year
exchange rates to enhance the visibility of the underlying business
trends excluding the impact of foreign currency exchange rate
fluctuations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150625006309/en/
NIKE, Inc.Investor Contact:Kelley
Hall, 503-532-3793orMedia
Contact:Kellie Leonard, 503-671-6171
Nike (NYSE:NKE)
Historical Stock Chart
From Apr 2024 to May 2024
Nike (NYSE:NKE)
Historical Stock Chart
From May 2023 to May 2024