10-KPeriod: FY2007

NIKE, Inc. Annual Report, Year Ended May 31, 2007

Filed July 27, 2007For Securities:NKE

Summary

NIKE, Inc. demonstrated solid performance in fiscal year 2007, reporting revenue growth of 9% to $16.3 billion and a 7% increase in net income to $1.5 billion. Diluted earnings per share also saw a healthy 11% increase to $2.93. The company's strategy focuses on delivering premium consumer experiences, innovative products, and operational excellence. A notable event impacting reported results was the adoption of SFAS No. 123R for stock-based compensation, which led to a $141.9 million pre-tax charge, alongside the settlement of a Converse arbitration. Excluding these items, net income grew by 11% and diluted EPS by 15%, highlighting the underlying strength of the business. The company also benefited from a reduced effective tax rate due to a European tax agreement. NIKE continued to return capital to shareholders through increased dividends and share repurchases, signaling confidence in its ongoing financial health and future prospects. Geographically, all four major regions and all three product business units contributed to revenue growth, with particular strength noted in the Asia Pacific region, driven by China.

Key Highlights

  • 1Revenue grew 9% to $16.3 billion in fiscal year 2007.
  • 2Net income increased by 7% to $1.5 billion.
  • 3Diluted Earnings Per Share (EPS) rose 11% to $2.93.
  • 4All four geographic regions and three product business units contributed to revenue growth.
  • 5The company adopted SFAS No. 123R for stock-based compensation, impacting reported expenses.
  • 6NIKE returned capital to shareholders through increased dividends and share repurchases.
  • 7Foot Locker, Inc. represented approximately 10% of global net sales.

Frequently Asked Questions

In fiscal year 2007, NIKE reported a 9% increase in revenue to $16.3 billion and a 7% increase in net income to $1.5 billion. Diluted earnings per share rose by 11% to $2.93. Excluding the impact of SFAS No. 123R adoption and the Converse arbitration settlement, the company saw even stronger growth in net income (11%) and diluted EPS (15%).

All four geographic regions – U.S., EMEA, Asia Pacific, and Americas – contributed to revenue growth in fiscal year 2007. The Asia Pacific region showed particularly strong performance, with China being a key driver of growth. The EMEA region also saw positive contributions, despite some challenging market conditions in the UK and France.

The adoption of SFAS No. 123R, which requires companies to expense stock-based compensation, resulted in a $141.9 million pre-tax charge in fiscal year 2007. This charge impacted reported net income and EPS, but the company provided adjusted figures to show the underlying business performance.

NIKE demonstrated a commitment to returning value to shareholders by increasing its quarterly dividend and actively repurchasing shares under its approved repurchase program. Cash flow from operations was robust, supporting these capital allocation activities.