What is the main purpose of the operating segment realignment announced by NIKE?

The primary goal is to align with NIKE's 'Consumer Direct Offense' strategy, enabling the company to serve consumers more personally and at scale. The new four-geographic structure (North America, EMEA, Greater China, APLA) is intended to provide better insights into regional performance and strategic execution.

Why is NIKE discontinuing the reporting of Futures Orders?

NIKE has determined that Futures Orders are becoming an increasingly less reliable indicator of future performance. This is attributed to the company's strategic shifts towards direct-to-consumer sales, faster go-to-market models, and closer proximity to consumers, which reduce the predictive value of traditional wholesale order forecasting.

Will this change in reporting segments affect NIKE's previously reported financial results?

No, the changes in segment structure affect only the manner in which operating segment results are reported. The recast historical segment information does not impact the company's previously reported consolidated financial statements, including income statements, balance sheets, and cash flows.

Where can investors find the recast financial information for the new operating segments?

The unaudited summary financial information reflecting the realignment, including divisional revenues and EBIT details, has been posted to NIKE's website and is included as Exhibits 99.2, 99.3, and 99.4 to this Form 8-K filing.

NKE 8-K: Regulation FD — Sep 25, 2017

Summary

NIKE, Inc. filed an 8-K on September 25, 2017, to announce a significant restructuring of its NIKE Brand operating segments, effective for fiscal year 2018. The company is realigning its geographic segments into four new categories: North America, Europe, Middle East & Africa (EMEA), Greater China, and Asia Pacific & Latin America (APLA). This change aims to better serve consumers personally and at scale, aligning with their previously announced Consumer Direct Offense strategy. The filing also includes recast historical financial data to reflect this new segment structure, which will provide investors with a clearer view of performance across these key regions. Importantly, the company has also decided to discontinue the reporting of Futures Orders, citing their diminishing relevance as an indicator of future performance due to shifts towards direct-to-consumer and faster business models.

Key Highlights

1NIKE is realigning its NIKE Brand geographic operating segments into four new regions: North America, EMEA, Greater China, and APLA, starting in fiscal year 2018.
2This strategic shift is part of the 'Consumer Direct Offense' to enhance personalized consumer engagement and scale.
3Historical financial information has been recast to reflect the new segment structure, aiding investor analysis.
4The company is discontinuing the reporting of 'Futures Orders' in its financial disclosures from Q1 fiscal 2018 onwards.
5The discontinuation of Futures Orders is due to their decreased reliability as a performance indicator, reflecting NIKE's evolving business model towards direct-to-consumer and agility.
6Converse remains a separate reportable segment.
7The segment realignment does not impact previously reported consolidated financial statements.

NIKE, Inc. 8-K Report, Regulation FD Disclosure (Sep 25, 2017)

Summary

Key Highlights

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