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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 | |
---|---|---|---|---|---|---|---|---|
0.4183 | 0.45% | 93.7783 | 94.315 | 93.21 | 93.98 | 7,113,068 | 23:51:06 |
NIKE, Inc. (NYSE:NKE) today reported fiscal 2016 financial results for its fourth quarter and full year ended May 31, 2016. Strong global demand fueled revenue increases across nearly all geographies in fiscal 2016, while robust international revenue drove growth in the fourth quarter.
Diluted earnings per share for the quarter were $0.49 as international momentum and a lower average share count were offset by a higher tax rate; a gross margin decline partially due to the clearance of excess inventory in North America; and higher selling and administrative expense.
Fiscal 2016 diluted earnings per share rose 17 percent to $2.16, reflecting revenue growth of 6 percent, gross margin expansion, a lower tax rate and a lower average share count.
“Our consistent growth is fueled by innovation, which is why fiscal 2016 was such a breakthrough year for NIKE in everything we do,” said Mark Parker, President and CEO, NIKE, Inc. “From product to manufacturing to how we serve our consumers – more personally and at scale – we’ve raised the bar of what’s possible. It’s a great time to be in sports, and the NIKE Brand has never been stronger. Fueled by our unrivaled roster of athletes, fiscal 2017’s calendar of sport moments promises to build on our business momentum and inspire consumers.”*
Fourth Quarter Income Statement Review
Fiscal 2016 Income Statement Review
May 31, 2016 Balance Sheet Review
Share Repurchases
During the fourth quarter, NIKE, Inc. repurchased a total of 9.0 million shares for approximately $540 million as part of the four-year, $12 billion program approved by the Board of Directors in November 2015. As of the end of fiscal 2016, a total of 20.1 million shares had been repurchased under this program for approximately $1.2 billion, at an average cost of $59.21 per share.
In fiscal 2016, NIKE, Inc. repurchased a total of 55.4 million shares for approximately $3.2 billion, at an average cost of $58.44, under the new $12 billion program currently in use as well as the previous $8 billion program approved by the Board of Directors in September 2012.
Futures Orders
As of May 31, 2016, worldwide futures orders for NIKE Brand athletic footwear and apparel scheduled for delivery from June through November 2016 totaled $14.9 billion, 8 percent higher than orders reported for the same period last year, and 11 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 28, 2016, 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 5, 2016.
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, distributes and licenses casual sneakers, apparel and accessories; and Hurley, which designs and distributes a line of action sports and youth lifestyle 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 Securities and Exchange Commission (SEC), 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, “at once” and closeout 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) 5/31/2016 5/31/2015 Change 5/31/2016 5/31/2015 Change Revenues $ 8,244 $ 7,779 6 % $ 32,376 $ 30,601 6 % Cost of sales 4,458 4,186 6 % 17,405 16,534 5 % Gross profit 3,786 3,593 5 % 14,971 14,067 6 % Gross margin 45.9 % 46.2 % 46.2 % 46.0 % Demand creation expense 873 819 7 % 3,278 3,213 2 % Operating overhead expense 1,893 1,776 7 % 7,191 6,679 8 % Total selling and administrative expense 2,766 2,595 7 % 10,469 9,892 6 % % of revenue 33.6 % 33.4 % 32.3 % 32.3 % Interest expense (income), net 5 4 — 19 28 — Other (income) expense, net (58 ) (58 ) — (140 ) (58 ) — Income before income taxes 1,073 1,052 2 % 4,623 4,205 10 % Income tax expense 227 187 21 % 863 932 -7 % Effective tax rate 21.2 % 17.8 % 18.7 % 22.2 % NET INCOME $ 846 $ 865 -2 % $ 3,760 $ 3,273 15 % Earnings per common share: Basic $ 0.50 $ 0.50 0 % $ 2.21 $ 1.90 16 % Diluted $ 0.49 $ 0.49 0 % $ 2.16 $ 1.85 17 % Weighted average common shares outstanding: Basic 1,682.4 1,715.0 1,697.9 1,723.5 Diluted 1,723.1 1,759.6 1,742.5 1,768.8 Dividends declared per common share $ 0.16 $ 0.14 $ 0.62 $ 0.54 NIKE, Inc. CONSOLIDATED BALANCE SHEETS May 31, May 31, (Dollars in millions) 2016 2015 % Change ASSETS Current assets: Cash and equivalents $ 3,138 $ 3,852 -19% Short-term investments 2,319 2,072 12% Accounts receivable, net 3,241 3,358 -3% Inventories 4,838 4,337 12% Prepaid expenses and other current assets 1,489 1,968 -24% Total current assets 15,025 15,587 -4% Property, plant and equipment, net 3,520 3,011 17% Identifiable intangible assets, net 281 281 0% Goodwill 131 131 0% Deferred income taxes and other assets1 2,439 2,587 -6% TOTAL ASSETS $ 21,396 $ 21,597 -1% LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 44 $ 107 -59% Notes payable 1 74 -99% Accounts payable 2,191 2,131 3% Accrued liabilities1 3,037 3,949 -23% Income taxes payable 85 71 20% Total current liabilities 5,358 6,332 -15% Long-term debt 2,010 1,079 86% Deferred income taxes and other liabilities1 1,770 1,479 20% Redeemable preferred stock — — — Shareholders' equity 12,258 12,707 -4% TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 21,396 $ 21,597 -1% 1 During the fourth quarter of fiscal 2016, NIKE, Inc. adopted Accounting Standard Update No. 2015-17, which requires all deferred tax assets and deferred tax liabilities to be classified as non-current. All periods presented have been updated to reflect these changes. NIKE, Inc. DIVISIONAL REVENUES% Change
% Change
Excluding
Excluding
THREE MONTHS ENDED %Currency
TWELVE MONTHS ENDED %Currency
(Dollars in millions) 5/31/2016 5/31/20151 ChangeChanges2
5/31/2016 5/31/20151 ChangeChanges2
North America Footwear $ 2,367 $ 2,317 2% 2% $ 9,299 $ 8,506 9% 10% Apparel 1,163 1,187 -2% -2% 4,746 4,410 8% 8% Equipment 205 228 -10% -10% 719 824 -13% -13% Total 3,735 3,732 0% 0% 14,764 13,740 7% 8% Western Europe Footwear 1,027 900 14% 15% 3,985 3,876 3% 14% Apparel 411 310 33% 34% 1,628 1,552 5% 16% Equipment 64 57 12% 13% 271 277 -2% 8% Total 1,502 1,267 19% 19% 5,884 5,705 3% 14% Central & Eastern Europe Footwear 224 237 -5% -2% 882 827 7% 23% Apparel 102 102 0% 5% 463 499 -7% 9% Equipment 19 21 -10% 1% 86 95 -9% 7% Total 345 360 -4% 0% 1,431 1,421 1% 17% Greater China Footwear 681 551 24% 28% 2,599 2,016 29% 33% Apparel 268 245 9% 14% 1,055 925 14% 17% Equipment 30 33 -9% 1% 131 126 4% 7% Total 979 829 18% 23% 3,785 3,067 23% 27% Japan Footwear 187 145 29% 22% 570 452 26% 34% Apparel 70 63 11% 4% 228 230 -1% 5% Equipment 23 22 5% -3% 71 73 -3% 3% Total 280 230 22% 15% 869 755 15% 22% Emerging Markets Footwear 596 631 -6% 13% 2,536 2,641 -4% 14% Apparel 226 249 -9% 10% 947 1,021 -7% 11% Equipment 50 54 -7% 9% 218 236 -8% 11% Total 872 934 -7% 12% 3,701 3,898 -5% 13% Global Brand Divisions3 12 30 -60% -59% 73 115 -37% -30% Total NIKE Brand 7,725 7,382 5% 8% 30,507 28,701 6% 13% Converse 513 435 18% 18% 1,955 1,982 -1% 2% Corporate4 6 (38) — — (86) (82) — — Total NIKE, Inc. Revenues $ 8,244 $ 7,779 6% 9% $ 32,376 $ 30,601 6% 12% Total NIKE Brand Footwear $ 5,082 $ 4,781 6% 9% $ 19,871 $ 18,318 8% 15% Apparel 2,240 2,156 4% 7% 9,067 8,637 5% 11% Equipment 391 415 -6% -3% 1,496 1,631 -8% -2% Global Brand Divisions3 12 30 -60% -59% 73 115 -37% -30% 1 Certain prior year amounts have been reclassified to conform to fiscal 2016 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.2 Fiscal 2016 results have been restated using fiscal 2015 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.
3 Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.
4 Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse but managed through our central foreign exchange risk management program.
NIKE, Inc. SUPPLEMENTAL NIKE BRAND REVENUE DETAILS
% Change
Excluding
YEAR ENDED %Currency
(Dollars in millions) 5/31/2016 5/31/20151 ChangeChanges2
NIKE Brand Revenues by: Sales to Wholesale Customers $ 22,577 $ 21,952 3% 9% Sales Direct to Consumer 7,857 6,634 18% 25% Global Brand Divisions3 73 115 -37% -30% Total NIKE Brand Revenues $ 30,507 $ 28,701 6% 13% NIKE Brand Revenues on a Wholesale Equivalent Basis:4 Sales to Wholesale Customers $ 22,577 $ 21,952 3% 9% Sales from our Wholesale Operations to Direct to Consumer Operations 4,672 3,881 20% 27% Total NIKE Brand Wholesale Equivalent Revenues $ 27,249 $ 25,833 5% 12% NIKE Brand Wholesale Equivalent Revenues by:4 Men's $ 15,410 $ 14,689 5% 11% Women’s 6,296 5,732 10% 17% Young Athletes' 4,560 4,301 6% 11% Others5 983 1,111 -12% -4% Total NIKE Brand Wholesale Equivalent Revenues $ 27,249 $ 25,833 5% 12% NIKE Brand Wholesale Equivalent Revenues by:4 Running $ 5,017 $ 4,863 3% 10% NIKE Basketball 1,378 1,385 -1% 2% Jordan Brand 2,753 2,329 18% 21% Football (Soccer) 2,143 2,250 -5% 7% Men’s Training 2,611 2,545 3% 6% Women’s Training 1,344 1,281 5% 11% Action Sports 711 737 -4% 3% Sportswear 7,513 6,604 14% 22% Golf 706 769 -8% -6% Others6 3,073 3,070 0% 6% Total NIKE Brand Wholesale Equivalent Revenues $ 27,249 $ 25,833 5% 12%1 Certain prior year amounts have been reclassified to conform to fiscal 2016 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
2 Fiscal 2016 results have been restated using fiscal 2015 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.
3 Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.
4 References 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.
5 Others 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.
6 Others include all other categories and certain adjustments that are not allocated at the category level.
NIKE, Inc. EARNINGS BEFORE INTEREST AND TAXES1 THREE MONTHS ENDED % TWELVE MONTHS ENDED % (Dollars in millions) 5/31/2016 5/31/20152 Change 5/31/2016 5/31/20152 Change North America $ 936 $ 1,060 -12% $ 3,763 $ 3,645 3% Western Europe 308 277 11% 1,434 1,275 12% Central & Eastern Europe 46 71 -35% 289 249 16% Greater China 357 266 34% 1,372 993 38% Japan 55 38 45% 174 100 74% Emerging Markets 191 192 -1% 892 818 9% Global Brand Divisions3 (722) (627) -15% (2,596) (2,267) -15% TOTAL NIKE BRAND 1,171 1,277 -8% 5,328 4,813 11% Converse 128 80 60% 487 517 -6% Corporate4 (221) (301) 27% (1,173) (1,097) -7% TOTAL EARNINGS BEFORE INTEREST AND TAXES 1,078 1,056 2% 4,642 4,233 10% Interest expense (income), net 5 4 — 19 28 — TOTAL INCOME BEFORE INCOME TAXES $ 1,073 $ 1,052 2% $ 4,623 $ 4,205 10% 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 tax expense.2 Certain prior year amounts have been reclassified to conform to fiscal 2016 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 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 largely of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company’s corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.
NIKE, Inc. NIKE BRAND REPORTED FUTURES GROWTH BY GEOGRAPHY1 As of May 31, 2016Reported Futures
Excluding Currency
Orders
Changes2
North America 6% 6% Western Europe 8% 11% Central & Eastern Europe 3% 7% Greater China 19% 24% Japan 24% 15% Emerging Markets 3% 13% Total NIKE Brand Reported Futures 8% 11% 1 Futures orders for NIKE Brand footwear and apparel scheduled for delivery from June 2016 through November 2016. NIKE Brand reported futures include (1) orders from external wholesale customers and (2) internal orders from our DTC in-line stores and e-commerce operations which are reflected at prices that are comparable to prices charged to external wholesale customers. 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 sales of at-once and closeout NIKE Brand footwear and apparel, all sales of NIKE Brand equipment, the difference between retail sales and internal orders from our DTC in-line stores and e-commerce operations, and sales from Converse, NIKE Golf and Hurley. 2 Reported futures have been restated using prior year exchange rates for the comparative period 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/20160628006580/en/
NIKE, Inc.Investor Contact:Nitesh Sharan, 503-532-2828orMedia Contact:Kellie Leonard, 503-671-6171
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