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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Nike Inc | NYSE:NKE | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.99 | 1.08% | 92.99 | 93.92 | 92.54 | 93.63 | 11,595,018 | 01:00:00 |
From Apr 2019 to Apr 2024
NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2013 third quarter ended February 28, 2013. For continuing operations, strong demand for NIKE, Inc. brands propelled double-digit revenue growth on a currency neutral basis, and diluted earnings per share grew faster than revenue due to gross margin expansion, a lower tax rate and a lower average share count.
"Our team delivered strong results in Q3. We did it with a relentless flow of innovation into our key categories," said Mark Parker, President and CEO of NIKE, Inc. "Given the diversity of our portfolio, we're able to capture big opportunities that drive sustainable, profitable growth. At the same time we continue to invest in new ways to enhance athletic performance, build strong consumer communities, and improve how we design and manufacture our products. That’s how we increase our potential and drive shareholder value."*
Third Quarter Continuing Operations Income Statement Review
February 28, 2013 Balance Sheet Review for Continuing Operations
Share Repurchases
During the third quarter, NIKE, Inc. repurchased a total of 4.9 million shares for approximately $253 million as part of the four-year, $8 billion program approved by the Board of Directors in September 2012. As of the end of the third quarter, a total of 11.1 million shares were repurchased under this program at a cost of approximately $548 million.
Futures Orders
As of the end of the quarter, worldwide futures orders for NIKE Brand athletic footwear and apparel, scheduled for delivery from March through July 2013 totaled $9.9 billion, 6 percent higher than orders reported for the same period last year. Excluding currency changes, reported orders would have increased 7 percent.*
Discontinued Operations
The Company continually evaluates its existing portfolio of businesses to ensure resources are invested in those businesses that are accretive to the NIKE Brand, and represent the largest growth potential and highest returns. On May 31, 2012, the Company announced its intention to divest of the Umbro and Cole Haan businesses, allowing the Company to focus resources on driving growth in the NIKE, Jordan, Converse and Hurley brands.
As previously announced, the Company completed the sale of certain assets of the Umbro brand during the second quarter ended November 30, 2012 and recorded a loss on the sale of these assets of $107 million, net of tax, that was included in the net loss from discontinued operations for the second fiscal quarter of 2013.
On February 1, 2013, the Company completed the sale of Cole Haan to Apax Partners for an agreed upon purchase price of $570 million and received at closing $561 million, net of $9 million of purchase price adjustments. For the third quarter ended February 28, 2013, the Company recorded a gain on sale of $231 million, net of tax, representing the sales price less the asset value of Cole Haan and other miscellaneous charges. For the third quarter of 2013, the Company’s net income from discontinued operations was $204 million, which includes the gain recorded for the sale of Cole Haan, net of tax, less net operating losses and divesture transaction costs for Cole Haan and Umbro during the period.
Under the Cole Haan sale agreement, the Company will provide certain transition services to Cole Haan and will license NIKE proprietary technologies for a transition period. The continuing cash flows related to these items are not expected to be significant to Cole Haan and the Company will have no significant continuing involvement with Cole Haan beyond the transition services.
Conference Call
NIKE management will host a conference call beginning at approximately 2:00 p.m. PT on March 21, 2013, to review third quarter results. The conference call will be broadcast live over the Internet and can be accessed at http://investors.nikeinc.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, March 28, 2013.
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. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories. For more information, NIKE’s earnings releases and other financial information are available on the Internet at http://investors.nikeinc.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 significant portion of the business does not report futures orders.
(Additional Tables Follow)
NIKE, Inc. CONSOLIDATED STATEMENTS OF INCOME For the period ended February 28, 2013 THREE MONTHS ENDED % NINE MONTHS ENDED % (Dollars in millions, except per share data) 2/28/2013 2/29/2012 Change 2/28/2013 2/29/2012 Change Income from continuing operations: Revenues $ 6,187 $ 5,656 9 % $ 18,616 $ 17,095 9 % Cost of sales 3,451 3,171 9 % 10,522 9,616 9 % Gross profit 2,736 2,485 10 % 8,094 7,479 8 % Gross margin 44.2 % 43.9 % 43.5 % 43.7 % Demand creation expense 619 592 5 % 2,103 1,872 12 % Operating overhead expense 1,244 1,116 11 % 3,655 3,297 11 % Total selling and administrative expense 1,863 1,708 9 % 5,758 5,169 11 % % of revenue 30.1 % 30.2 % 30.9 % 30.2 % Interest (income) expense, net (2 ) - - (6 ) 3 - Other expense (income), net 17 (10 ) - (28 ) 17 - Income before income taxes 858 787 9 % 2,370 2,290 3 % Income taxes 196 218-10
%
602 580 4 % Effective tax rate 22.8 % 27.7 % 25.4 % 25.3 % NET INCOME FROM CONTINUING OPERATIONS 662 569 16 % 1,768 1,710 3 % NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 204 (9 ) - 49 (36 ) - NET INCOME $ 866 $ 560 55 % $ 1,817 $ 1,674 9 % Earnings per share from continuing operations: Basic earnings per common share $ 0.74 $ 0.62 19 % $ 1.97 $ 1.86 6 % Diluted earnings per common share $ 0.73 $ 0.61 20 % $ 1.93 $ 1.82 6 % Earnings per share from discontinued operations: Basic earnings per common share $ 0.23 $ (0.01 ) - $ 0.05 $ (0.04 ) - Diluted earnings per common share $ 0.22 $ (0.01 ) - $ 0.05 $ (0.04 ) - Weighted Average Common Shares Outstanding: Basic 893.9 915.1 898.9 921.2 Diluted 911.7 934.6 916.5 940.3 Dividends declared per common share $ 0.21 $ 0.18 $ 0.60 $ 0.52 Nike, Inc. CONSOLIDATED BALANCE SHEETS As of February 28, 2013 February 28, February 29, (Dollars in millions) 2013 2012 % Change ASSETS Current assets: Cash and equivalents $ 2,557 $ 2,021 27 % Short-term investments 1,485 1,176 26 % Accounts receivable, net 3,232 3,199 1 % Inventories 3,329 3,206 4 % Deferred income taxes 275 302 -9 % Prepaid expenses and other current assets 882 745 18 % Assets of discontinued operations 29 602 -95 % Total current assets 11,789 11,251 5 % Property, plant and equipment 5,370 4,988 8 % Less accumulated depreciation 3,110 2,855 9 % Property, plant and equipment, net 2,260 2,133 6 % Identifiable intangible assets, net 376 366 3 % Goodwill 131 131 0 % Deferred income taxes and other assets 1,059 913 16 % TOTAL ASSETS $ 15,615 $ 14,794 6 % LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 57 $ 49 16 % Notes payable 103 91 13 % Accounts payable 1,241 1,255 -1 % Accrued liabilities 1,899 1,798 6 % Income taxes payable 138 59 134 % Liabilities of discontinued operations 62 175 -65 % Total current liabilities 3,500 3,427 2 % Long-term debt 161 229 -30 % Deferred income taxes and other liabilities 1,287 962 34 % Redeemable preferred stock - - - Shareholders' equity 10,667 10,176 5 % TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 15,615 $ 14,794 6 % NIKE, Inc. DIVISIONAL REVENUES1 For the period ended February 28, 2013
% Change
% Change
Excluding
Excluding
THREE MONTHS ENDED
%
Currency
NINE MONTHS ENDED
%
Currency
(Dollars in millions) 2/28/2013 2/29/2012 ChangeChanges2
2/28/2013 2/29/2012 ChangeChanges2
North America Footwear $ 1,691 $ 1,470 15 % 15 % $ 4,894 $ 4,219 16 % 16 % Apparel 697 573 22 % 22 % 2,280 1,866 22 % 22 % Equipment 158 106 49 % 51 % 499 330 51 % 51 % Total 2,546 2,149 18 % 18 % 7,673 6,415 20 % 20 % Western Europe Footwear 692 606 14 % 14 % 1,951 1,875 4 % 10 % Apparel 298 305 -2 % -3 % 981 1,045 -6 % 0 % Equipment 50 51 -2 % -3 % 172 185 -7 % -1 % Total 1,040 962 8 % 8 % 3,104 3,105 0 % 6 % Central & Eastern Europe Footwear 179 161 11 % 8 % 491 476 3 % 9 % Apparel 119 96 24 % 21 % 370 330 12 % 18 % Equipment 20 18 11 % 10 % 65 64 2 % 9 % Total 318 275 16 % 13 % 926 870 6 % 12 % Greater China Footwear 410 449 -9 % -11 % 1,090 1,116 -2 % -4 % Apparel 196 221 -11 % -13 % 598 666 -10 % -11 % Equipment 29 24 21 % 22 % 96 90 7 % 5 % Total 635 694 -9 % -10 % 1,784 1,872 -5 % -6 % Japan Footwear 96 108 -11 % -4 % 309 311 -1 % 3 % Apparel 65 79 -18 % -10 % 224 234 -4 % -1 % Equipment 14 15 -7 % -1 % 44 49 -10 % -8 % Total 175 202 -13 % -6 % 577 594 -3 % 0 % Emerging Markets Footwear 590 553 7 % 9 % 1,912 1,780 7 % 15 % Apparel 195 187 4 % 6 % 679 602 13 % 20 % Equipment 54 53 2 % 5 % 167 159 5 % 13 % Total 839 793 6 % 8 % 2,758 2,541 9 % 16 % Global Brand Divisions3 30 27 11 % 11 % 84 84 0 % 5 % Total NIKE Brand 5,583 5,102 9 % 10 % 16,906 15,481 9 % 12 % Other Businesses4 615 563 9 % 9 % 1,768 1,636 8 % 8 % Corporate5 (11 ) (9 ) - - (58 ) (22 ) - - Total NIKE, Inc. Revenues From Continuing Operations $ 6,187 $ 5,656 9 % 10 % $ 18,616 $ 17,095 9 % 12 % Total NIKE Brand Footwear $ 3,658 $ 3,347 9 % 9 % $ 10,647 $ 9,777 9 % 12 % Apparel 1,570 1,461 7 % 8 % 5,132 4,743 8 % 11 % Equipment 325 267 22 % 23 % 1,043 877 19 % 22 % Global Brand Divisions3 30 27 11 % 11 % 84 84 0 % 5 %1 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
2 Fiscal 2013 results have been restated using fiscal 2012 exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment.
4 Other businesses represent activities of Converse, Hurley, and NIKE Golf.
5 Corporate revenues primarily consist of intercompany revenue eliminations and foreign currency revenue-related hedge gains and losses generated by entities within the NIKE Brand geographic operating segments and certain Other Businesses through our centrally managed foreign exchange risk management program.
NIKE, Inc. EARNINGS BEFORE INTEREST AND TAXES1,2 For the period ended February 28, 2013 THREE MONTHS ENDED % NINE MONTHS ENDED % (Dollars in millions) 2/28/2013 2/29/2012 Change 2/28/2013 2/29/2012 Change North America $ 625 $ 503 24 % $ 1,811 $ 1,468 23 % Western Europe 178 149 19 % 505 464 9 % Central & Eastern Europe 71 60 18 % 175 163 7 % Greater China 218 273 -20 % 567 664 -15 % Japan 24 24 0 % 91 93 -2 % Emerging Markets 221 215 3 % 749 652 15 % Global Brand Divisions3 (324 ) (299 ) -8 % (1,023 ) (846 ) -21 % TOTAL NIKE BRAND 1,013 925 10 % 2,875 2,658 8 % Other Businesses4 128 104 23 % 329 280 18 % Corporate5 (285 ) (242 ) -18 % (840 ) (645 ) -30 % TOTAL EARNINGS BEFORE INTEREST AND TAXES $ 856 $ 787 9 % $ 2,364 $ 2,293 3 % 1 The Company evaluates performance of individual operating segments based on earnings before interest and taxes (also commonly referred to as “EBIT”), which represents net income before interest expense, net, and income taxes.2 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment and selling general and administrative expenses that are centrally managed for the Nike Brand.
4 Other Businesses represent activities of Converse, Hurley, and NIKE Golf.
5 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 February 28, 2013 Reported Futures OrdersExcluding Currency Changes 2
North America 11 % 11 % Western Europe -5 % -5 % Central & Eastern Europe 11 % 11 % Greater China 4 % 3 % Japan -8 % 5 % Emerging Markets 12 % 16 % Total NIKE Brand Reported Futures 6 % 7 % 1 Futures orders by geography and in total for NIKE Brand athletic footwear and apparel scheduled for delivery from March 2013 through July 2013. The reported futures and advance 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 and because the mix of orders can shift between advance/futures and at-once orders and 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 and discounts can cause differences in the comparisons between advance/futures orders and actual revenues. Moreover, a significant portion of our revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE Brand footwear and apparel, sales of NIKE Brand equipment, sales from certain of our Direct to Consumer operations, and sales from our Other Businesses. 2 Reported futures restated using prior year exchange rates to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
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