10-QPeriod: Q3 FY2024

NIKE, Inc. Quarterly Report for Q3 Ended Feb 29, 2024

Filed April 4, 2024For Securities:NKE

Summary

NIKE, Inc.'s third quarter of fiscal year 2024 (ending February 29, 2024) showed modest revenue growth, with total revenues reaching $12.43 billion, a slight increase from $12.39 billion in the prior year period. The company reported a consolidated gross margin of 44.8%, an improvement of 150 basis points year-over-year, driven by strategic pricing actions and lower logistics costs, which more than offset higher input costs and restructuring charges. However, net income saw a decrease of 5% to $1.17 billion, or $0.77 per diluted share, impacted by increased selling and administrative expenses, particularly demand creation and operating overhead expenses, which rose by 7% and 6% respectively, partly due to restructuring charges. Key strategic initiatives include continued investment in NIKE Direct operations and digital platforms, alongside efforts to elevate the wholesale partner experience. The company is also focused on accelerating innovation and streamlining its organization to drive future growth, expecting a majority of the annual wage savings from these actions to be reinvested in consumer-facing activities. Despite cautious consumer spending and high promotional activity across the industry, NIKE remains confident in its brand strength and consumer connections, focusing on gross margin expansion and disciplined cost control.

Financial Highlights

47 data points
Beta

Revenue

$12.43B

44.8% Gross Margin

Net Income

$1.17B

9.4% Net Margin

EPS (Diluted)

$0.77

Total Assets

$37.36B

Cash & Equivalents

$8.96B

Free Cash Flow

$1.92B

Financial Statements
Beta
Revenue$12.43B
Cost of Revenue$6.87B
Gross Profit$5.56B
SG&A Expenses$4.23B
Net Income$1.17B
EPS (Basic)$0.77
EPS (Diluted)$0.77
Shares Outstanding (Basic)1.51B
Shares Outstanding (Diluted)1.53B

Key Highlights

  • 1Revenues for the third quarter of fiscal 2024 reached $12.43 billion, a slight increase from $12.39 billion in the prior year period.
  • 2Gross margin improved by 150 basis points to 44.8%, driven by strategic pricing and lower logistics costs.
  • 3Net income decreased by 5% to $1.17 billion, translating to $0.77 per diluted share.
  • 4Selling and administrative expenses increased by 7%, influenced by higher demand creation and operating overhead costs, including restructuring charges.
  • 5NIKE Direct revenues were flat at $5.4 billion, with comparable store sales up 3% but digital sales down 4%.
  • 6Inventories decreased by 9% to $7.7 billion compared to May 31, 2023, primarily due to reduced units.
  • 7The company returned approximately $1.4 billion to shareholders in the quarter through share repurchases and dividends.

Frequently Asked Questions

NIKE, Inc. reported total revenues of $12.43 billion for the third quarter of fiscal year 2024, a slight increase of 0% compared to $12.39 billion in the same period last year. On a currency-neutral basis, revenues were also flat.

While gross margin improved by 150 basis points to 44.8% due to strategic pricing and cost efficiencies, net income decreased by 5% to $1.17 billion. This was mainly due to an increase in selling and administrative expenses, which rose by 7%, including significant restructuring charges.

NIKE's inventory levels as of February 29, 2024, stood at $7.7 billion, representing a decrease of 9% compared to May 31, 2023. This reduction was primarily driven by a decrease in the number of units.

NIKE announced an enterprise initiative in December 2023 to accelerate future growth by streamlining its organization and reducing its global workforce. The company expects to reinvest the majority of the resulting wage savings into consumer-facing activities to enhance consumer engagement and marketplace impact.