Summary
NIKE, Inc. filed its 2012 10-K report, detailing its financial performance and strategic direction. The company reported record revenues of $24.1 billion, a 16% increase year-over-year, driven by strong demand across all NIKE Brand geographies and key product categories. Net income also saw a modest increase of 4% to $2.2 billion, with diluted earnings per share rising 8% to $4.73. Despite facing headwinds from higher product input costs which compressed gross margins, NIKE demonstrated operational efficiency by improving selling and administrative expense as a percentage of revenue. A significant strategic move announced was the intention to divest the Cole Haan and Umbro businesses to sharpen focus on the core NIKE, Jordan, Converse, and Hurley brands. The company continues to invest in innovation, highlighted by the launch of the NIKE Fuelband and Flyknit technology, and expansion of its NIKE+ platform. NIKE's robust financial health is supported by strong operating cash flow and a significant cash and short-term investments balance, enabling continued capital allocation through share repurchases and dividends.
Financial Highlights
51 data points| Revenue | $23.33B |
| Cost of Revenue | $13.18B |
| Gross Profit | $10.15B |
| SG&A Expenses | $7.08B |
| Operating Income | $2.26B |
| Net Income | $2.21B |
| EPS (Basic) | $1.20 |
| EPS (Diluted) | $1.18 |
| Shares Outstanding (Basic) | 1.84B |
| Shares Outstanding (Diluted) | 1.88B |
Key Highlights
- 1NIKE reported record revenues of $24.1 billion for fiscal year 2012, a 16% increase from the prior year, demonstrating strong top-line growth.
- 2Diluted earnings per share increased by 8% to $4.73, indicating improved profitability on a per-share basis.
- 3The company announced its strategic intention to divest the Cole Haan and Umbro businesses, aiming to concentrate resources on high-growth brands.
- 4Gross margins declined by 2.2 percentage points to 43.4%, primarily due to higher product input costs (materials and labor).
- 5Selling and administrative expenses as a percentage of revenue decreased by 1.3 percentage points to 30.8%, showing improved operational leverage.
- 6NIKE continues to invest in innovation, with new product technologies like NIKE Fuelband and Flyknit contributing to brand strength and demand.
- 7Direct to Consumer (DTC) channels represented 17% of NIKE Brand revenues, with DTC revenue growing 21% on a currency-neutral basis, highlighting the effectiveness of this sales strategy.