10-KPeriod: FY2016

NIKE, Inc. Annual Report, Year Ended May 31, 2016

Filed July 21, 2016For Securities:NKE

Summary

NIKE, Inc.'s 2016 10-K filing reveals a company in a strong growth phase, marked by a 6% revenue increase to $32.4 billion and a 17% rise in diluted EPS to $2.16, despite significant foreign currency headwinds. This growth was driven by broad-based performance across NIKE Brand geographies and key product categories, supported by innovative product technologies and strong brand marketing efforts. The company's Direct to Consumer (DTC) segment, particularly e-commerce, showed robust growth, increasing 51% year-over-year, and represented a significant portion of the NIKE Brand's revenue. The company continues to strategically invest in its infrastructure, DTC capabilities, and digital platforms to fuel future growth. NIKE also demonstrated strong capital deployment through its share repurchase program, returning significant value to shareholders. While facing competitive pressures and risks related to global economic conditions and currency fluctuations, NIKE's diversified portfolio and strategic focus on product innovation and consumer connection position it well for continued success.

Financial Highlights

49 data points
Beta

Revenue

$32.38B

46.2% Gross Margin

Net Income

$3.76B

11.6% Net Margin

EPS (Diluted)

$2.16

Total Assets

$21.38B

Cash & Equivalents

$3.14B

Free Cash Flow

$2.26B

Financial Statements
Beta
Revenue$32.38B
Cost of Revenue$17.41B
Gross Profit$14.97B
SG&A Expenses$10.47B
Net Income$3.76B
EPS (Basic)$2.21
EPS (Diluted)$2.16
Shares Outstanding (Basic)1.70B
Shares Outstanding (Diluted)1.74B

Key Highlights

  • 1Total revenues increased by 6% to $32.4 billion in fiscal year 2016.
  • 2Diluted earnings per common share (EPS) grew by 17% to $2.16.
  • 3The Direct to Consumer (DTC) channel, including e-commerce, saw revenue growth of 25% (currency-neutral), with online sales up 51%.
  • 4NIKE Brand revenues grew 6% (13% on a currency-neutral basis), with strong performance across all geographic segments, particularly Greater China and Western Europe.
  • 5The company returned capital to shareholders through share repurchases totaling $3.2 billion and dividends.
  • 6Gross margin improved by 20 basis points to 46.2%, driven by higher average selling prices and DTC growth.
  • 7Futures orders increased 8% (11% excluding currency changes), indicating strong forward demand.

Frequently Asked Questions

NIKE reported total revenues of $32.4 billion for fiscal year 2016, representing a 6% increase over the prior year. On a currency-neutral basis, revenues grew by 12%, highlighting strong underlying business momentum despite foreign currency headwinds.

The DTC segment demonstrated robust growth, with revenues increasing 18% (25% on a currency-neutral basis) for the NIKE Brand. E-commerce specifically experienced significant growth, with online sales up 51% in fiscal year 2016, showcasing the company's successful digital strategy.

Key growth drivers include innovative product development, strong brand marketing and endorsements, and the expansion of the DTC channel. Significant risks identified include intense competition, dependence on independent manufacturers, currency exchange rate fluctuations, potential disruptions in the global supply chain, and the need to anticipate and respond to rapidly changing consumer preferences.

NIKE continued its share repurchase program, buying back $3.2 billion of its common stock in fiscal year 2016 under a new $12 billion program. The company also increased its cash dividends declared per common share to $0.62. This demonstrates a commitment to returning capital to shareholders while investing in future growth.