10-KPeriod: FY2023

NIKE, Inc. Annual Report, Year Ended May 31, 2023

Filed July 20, 2023For Securities:NKE

Summary

NIKE, Inc. reported record revenues of $51.2 billion for fiscal year 2023, marking a 10% increase on a reported basis and a 16% increase on a currency-neutral basis, demonstrating strong global demand for its products despite economic uncertainties. The company saw significant growth in its NIKE Direct channel, with revenues up 14% to $21.3 billion, representing approximately 44% of total NIKE Brand revenues. This growth was driven by a 24% increase in NIKE Brand Digital sales and a 14% rise in comparable store sales. However, the company's gross margin decreased by 250 basis points to 43.5% due to higher product costs, elevated freight and logistics expenses, and unfavorable foreign currency exchange rate movements, partially offset by strategic pricing actions. Despite margin pressures, NIKE returned $7.5 billion to shareholders in fiscal 2023 through share repurchases and dividends, underscoring a commitment to shareholder value. Management noted improvements in supply chain conditions throughout the year, which stabilized product flow by the fourth quarter.

Financial Highlights

48 data points
Beta

Revenue

$51.22B

43.5% Gross Margin

Net Income

$5.07B

9.9% Net Margin

EPS (Diluted)

$3.23

Total Assets

$37.53B

Cash & Equivalents

$7.44B

Free Cash Flow

$4.87B

Financial Statements
Beta
Revenue$51.22B
Cost of Revenue$28.93B
Gross Profit$22.29B
SG&A Expenses$16.38B
Net Income$5.07B
EPS (Basic)$3.27
EPS (Diluted)$3.23
Shares Outstanding (Basic)1.55B
Shares Outstanding (Diluted)1.57B

Key Highlights

  • 1Record revenues of $51.2 billion for fiscal year 2023, a 10% increase reported and 16% increase currency-neutral.
  • 2NIKE Direct revenues grew 14% to $21.3 billion, accounting for 44% of total NIKE Brand revenues.
  • 3Gross margin declined by 250 basis points to 43.5% due to higher product costs and freight expenses, partially offset by strategic pricing.
  • 4Inventories remained flat at $8.5 billion, managed through actions taken to reduce excess stock.
  • 5Returned $7.5 billion to shareholders in fiscal 2023 via share repurchases and dividends.
  • 6Significant growth in NIKE Brand Footwear (20% currency-neutral) and Apparel (8% currency-neutral) on a wholesale equivalent basis.
  • 7North America and EMEA regions showed strong currency-neutral revenue growth of 18% and 21%, respectively.

Frequently Asked Questions

NIKE achieved record revenues of $51.2 billion in fiscal year 2023, an increase of 10% on a reported basis and 16% on a currency-neutral basis, indicating strong demand across its global markets.

Gross margin decreased by 250 basis points to 43.5% primarily due to higher product input costs, increased freight and logistics expenses, and unfavorable foreign currency exchange rate impacts. These were partially offset by strategic pricing actions and product mix.

NIKE's inventories remained flat at $8.5 billion. The company took proactive measures throughout the year, including reducing future inventory purchases and increasing promotional activities, to manage and reduce excess inventory levels, leading to a normalization of product flow by the fourth quarter.

NIKE's strategy focuses on its Consumer Direct Acceleration initiative, aiming to create premium, consistent, and seamless consumer experiences primarily through digital platforms and owned retail stores. The company is investing in technology and data analytics to enhance its digital transformation and accelerate growth by better serving consumer needs across Men's, Women's, and Kids' categories.