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NIKE, Inc. Reports Fiscal 2023 Fourth Quarter and Full Year Results


BEAVERTON, Ore. – WEBWIRE

NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2023 fourth quarter and full year ended May 31, 2023.

  • Full year reported revenues were $51.2 billion, up 10 percent compared to prior year and up 16 percent on a currency-neutral basis*
  • Fourth quarter reported revenues were $12.8 billion, up 5 percent compared to prior year and up 8 percent on a currency-neutral basis
  • NIKE Direct reported revenues for the fourth quarter were $5.5 billion, up 15 percent compared to prior year and up 18 percent on a currency-neutral basis
  • Wholesale reported revenues for the fourth quarter were $6.7 billion, down 2 percent compared to prior year and up 2 percent on a currency-neutral basis
  • Gross margin for the fourth quarter decreased 140 basis points to 43.6 percent
  • Diluted earnings per share was $0.66 for the fourth quarter


“NIKE’s strong results make clear that our strategy is working,” said John Donahoe, President & CEO, NIKE, Inc. “FY23 was a milestone year for NIKE as our unique advantages continue to drive competitive separation. Our investment in innovation and our digital leadership are fueling broad- based growth across our portfolio of brands, as we create value by serving the future of sport.”**

Matthew Friend, Executive Vice President and Chief Financial Officer, said, “FY23 demonstrated the power of NIKE’s portfolio to fuel strong growth, year after year. We finished the year with mid- teens currency-neutral revenue growth and a healthy marketplace — setting the foundation for sustainable, profitable growth in FY24 and beyond.”**

 

Fourth Quarter Income Statement Review

  • Revenues for NIKE, Inc. increased 5 percent to $12.8 billion compared to the prior year and were up 8 percent on a currency-neutral basis.
  • Revenues for the NIKE Brand were $12.2 billion, up 5 percent on a reported basis and up 8 percent on a currency-neutral basis, with growth across all brands, channels and geographies.
  • NIKE Direct revenues were $5.5 billion, up 15 percent compared to prior year and up 18 percent on a currency-neutral basis, led by NIKE-owned stores growth of 24 percent and NIKE Brand Digital growth of 14 percent.
  • Revenues for Converse were $586 million, down 1 percent on a reported basis and up 1 percent on a currency-neutral basis, led by double-digit growth in Asia, offset by declines in Europe.
  • Gross margin decreased 140 basis points to 43.6 percent, primarily due to higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates — partially offset by strategic pricing actions and lapping higher inventory obsolescence reserves in Greater China in the prior period.
  • Selling and administrative expense increased 8 percent to $4.4 billion.
  • Demand creation expense was $1.1 billion, up 3 percent, primarily due to sports marketing, and advertising and marketing expense.
  • Operating overhead expense increased 10 percent to $3.3 billion, primarily due to wage- related expenses and NIKE Direct variable costs.
  • The effective tax rate was 17.3 percent compared to (4.7) percent for the same period last year, due to a non-cash, one-time benefit in the prior year related to the onshoring of our non- U.S. intangible property.
  • Net income was $1.0 billion, down 28 percent, and Diluted earnings per share was $0.66, down 27 percent compared to prior year.


 

Fiscal 2023 Income Statement Review

  • Revenues for NIKE, Inc. increased 10 percent to $51.2 billion, up 16 percent on a currency- neutral basis.
  • Revenues for the NIKE Brand were $48.8 billion, up 10 percent on a reported basis and up 16 percent on a currency-neutral basis, driven by double-digit growth across NIKE Direct and our wholesale business.
  • NIKE Direct revenues were $21.3 billion, up 14 percent on a reported basis and up 20 percent on a currency-neutral basis, led by NIKE Brand Digital growth of 24 percent and NIKE-owned stores growth of 14 percent.
  • Revenues for Converse were $2.4 billion, up 3 percent on a reported basis and up 8 percent on a currency-neutral basis, led by double-digit growth in North America, partially offset by declines in Asia.
  • Gross margin decreased 250 basis points to 43.5 percent, primarily due to higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates — partially offset by strategic pricing actions.
  • Selling and administrative expense increased 11 percent to $16.4 billion.
  • Demand creation expense was $4.1 billion, up 5 percent compared to prior year, primarily due to advertising and marketing, and sports marketing expense.
  • Operating overhead expense increased 12 percent to $12.3 billion primarily due to wage-related expenses, NIKE Direct variable costs and higher strategic technology enterprise investments.
  • The effective tax rate was 18.2 percent, compared to 9.1 percent for the same period last year, due to decreased benefits from stock-based compensation and a non-cash, one-time benefit in the prior year related to the onshoring of our non-U.S. intangible property.
  • Net income was $5.1 billion, down 16 percent, and Diluted earnings per share was $3.23, down 14 percent compared to prior year.


 

May 31, 2023 Balance Sheet Review

  • Inventories for NIKE, Inc. were $8.5 billion, flat compared to the prior year period.
  • Cash and equivalents and short-term investments were $10.7 billion, $2.3 billion lower than prior year, as cash generated by operations was used for share repurchases, cash dividends, capital expenditures and the retirement of $500 million of debt upon maturity.


 

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 fourth quarter, the Company returned approximately $1.9 billion to shareholders, including:

  • Dividends of $524 million, up 9 percent from prior year.
  • Share repurchases of $1.4 billion, reflecting 11.5 million shares retired as part of the four-year, $18 billion program approved by the Board of Directors in June 2022.


In fiscal 2023, the Company returned approximately $7.5 billion to shareholders, including:

  • Dividends of $2.0 billion, up 10 percent from prior year.
  • Share repurchases of $5.5 billion, reflecting 50.0 million shares retired. The Company repurchased $0.7 billion, reflecting 6.5 million shares retired under the Company’s previous four-year, $15 billion program approved by the Board of Directors in June 2018 and $4.8 billion, reflecting 43.5 million shares retired under the Company’s current four-year, $18 billion program approved by the Board of Directors in June 2022.


Under the previous $15 billion program, which was terminated in August 2022, a total of 83.8 million shares for $9.4 billion were repurchased.

 

Conference Call

NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on June 29, 2023, 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 20, 2023.

 


 

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. Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories. For more information, NIKE, Inc.’s earnings releases and other financial information are available on the Internet at Investors.Nike.com. Individuals can also visit About.Nike.com and follow @NIKE.

* See additional information in the accompanying Divisional Revenues table or the Supplemental NIKE Brand Revenue table regarding this non-GAAP financial measure.

** 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 U.S. Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K.


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