Summary
NIKE, Inc. reported revenues of $11.6 billion for the three months ended August 31, 2024, a decrease of 10% from $12.9 billion in the prior year period. This revenue decline was primarily driven by a decrease in North America and EMEA regions, as well as challenges in digital sales. The company's gross margin improved by 120 basis points to 45.4%, benefiting from lower product costs, reduced warehousing and logistics expenses, and strategic pricing actions. Despite the revenue headwinds, NIKE demonstrated operational improvements leading to a stronger gross margin. Net income for the quarter was $1.05 billion, down from $1.45 billion year-over-year, resulting in diluted earnings per share of $0.70 compared to $0.94. The company continued its commitment to shareholder returns, repurchasing $1.18 billion in stock and paying $558 million in dividends. Management cites cautious consumer spending and product portfolio rebalancing as key factors influencing the current performance.
Financial Highlights
47 data points| Revenue | $11.59B |
| Cost of Revenue | $6.33B |
| Gross Profit | $5.26B |
| SG&A Expenses | $4.05B |
| Net Income | $1.05B |
| EPS (Basic) | $0.70 |
| EPS (Diluted) | $0.70 |
| Shares Outstanding (Basic) | 1.50B |
| Shares Outstanding (Diluted) | 1.50B |
Key Highlights
- 1Revenues declined 10% to $11.6 billion year-over-year, impacted by softer demand in key regions like North America and EMEA, and a significant drop in NIKE Direct digital sales.
- 2Gross margin improved by 120 basis points to 45.4%, driven by lower product costs (ocean freight, input costs), reduced warehousing/logistics expenses, and strategic pricing.
- 3Net income decreased by 28% to $1.05 billion, with diluted EPS falling to $0.70 from $0.94 in the prior year period.
- 4The company returned approximately $1.8 billion to shareholders through share repurchases ($1.18 billion) and dividends ($558 million) during the quarter.
- 5Inventories increased by 10% sequentially to $8.3 billion, primarily due to higher unit purchases, suggesting a cautious outlook on sales velocity.
- 6Demand creation expenses increased by 15% year-over-year, reflecting strategic investments in brand marketing and key sports events.
- 7The Greater China region showed resilience with a modest revenue decline of 3% (currency-neutral), driven by wholesale strength, though NIKE Direct sales saw a significant decrease.