Skip to content
AnalystLens

NIKE, Inc. 8-K Report, Financial Results (Mar 21, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed March 21, 2024
Period End
March 21, 2024
Security
NKE
In the record · 2016–202610-K1110-Q338-K113

NKE filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 113 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jun ’21Jun ’21
  2. Leadership change8-K · May ’23May ’23
  3. Restructuring8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed March 21, 2024. Cited figures are marked; the original filing is the authoritative source.

NIKE reported fiscal 2024 third-quarter results (quarter ended February 29, 2024) with revenue flat at $12.4 billiona, both on a reported and currency-neutral basis.

The NIKE Brand grew 2 percent to $11.9 billionb, with growth in North America, Greater China and APLA offset by a decline in EMEA. Converse revenue fell 19 percent to $495 million. Wholesale revenue rose 3 percent to $6.6 billion, while NIKE Direct was roughly flat at $5.4 billion and NIKE Brand Digital declined 3 percent on a reported basis.

Profitability was mixed. Gross margin expanded 150 basis points to 44.8 percent, driven by strategic pricing and lower ocean freight costs, but restructuring charges weighed on both gross margin (50 basis points) and selling and administrative expense, which rose 7 percent to $4.2 billionc, including $340 million of restructuring charges. Diluted EPS was $0.77, down 3 percent, versus $0.98 excluding restructuring charges, which the company presents as a non-GAAP measure.

EBIT margin fell to 10.9 percent from 11.9 percent a year earlier. Net income declined 5 percent to $1.2 billiond. The balance sheet remained solid, with inventories down 13 percent to $7.7 billion, reflecting lower units, and cash and short-term investments of about $10.6 billion.

NIKE returned roughly $1.4 billion to shareholders in the quarter through $562 million in dividends and $866 million in share repurchases. Management emphasized a restructuring program to build a faster, more efficient organization and a multiyear innovation cycle. Management's forward-looking statements carry the usual risks described in the company's SEC filings.

02—Key points

Key Highlights

  1. Revenue was flat at $12.4 billion (reported and currency-neutral); NIKE Brand grew 2 percent to $11.9 billion while Converse fell 19 percent to $495 million.
  2. Wholesale revenue grew 3 percent to $6.6 billion, while NIKE Brand Digital sales declined 3 percent on a reported basis, a notable weakness in the direct channel.
  3. Gross margin rose 150 basis points to 44.8 percent, helped by strategic pricing and lower ocean freight and logistics costs, partly offset by higher product input costs and restructuring charges.
  4. Diluted EPS was $0.77 (down 3 percent); excluding restructuring charges of $0.21 per share after tax, non-GAAP diluted EPS was $0.98.
  5. Selling and administrative expense rose 7 percent to $4.2 billion, including $340 million of restructuring charges; EBIT margin contracted to 10.9 percent from 11.9 percent.
  6. Regional performance was uneven: Greater China grew 5 percent, North America grew 3 percent and APLA grew 3 percent, while EMEA declined 3 percent.
  7. Inventories fell 13 percent to $7.7 billion on lower units, and NIKE returned about $1.4 billion to shareholders via dividends and share repurchases under its $18 billion four-year program.

03—Questions

Frequently Asked Questions

  1. Why did EPS decline even though gross margin improved?

    Gross margin expanded 150 basis points, but selling and administrative expense rose 7 percent, driven by $340 million of restructuring charges and higher demand creation spending. Those charges reduced diluted EPS by $0.21 after tax, so reported EPS fell to $0.77 from $0.79, while EPS excluding restructuring was $0.98.

  2. How did the company's regions and channels perform?

    Greater China (+5 percent), North America (+3 percent) and APLA (+3 percent) grew, while EMEA declined 3 percent on a reported basis. Wholesale grew 3 percent to $6.6 billion, NIKE Direct was roughly flat at $5.4 billion, and NIKE Brand Digital fell 3 percent. Converse was the weakest segment, down 19 percent.

  3. Is the company's balance sheet and liquidity under pressure?

    Liquidity remains strong, with cash and short-term investments of about $10.6 billion, roughly $0.2 billion lower than a year earlier after buybacks, dividends, capital expenditures and a bond repayment. Inventories declined 13 percent to $7.7 billion, which helps working capital, and long-term debt was stable at about $8.9 billion.

  4. How much is NIKE returning to shareholders, and is the dividend secure?

    NIKE returned about $1.4 billion in the quarter: $562 million in dividends (up 6 percent) and $866 million in share repurchases (7.9 million shares). Under the $18 billion program approved in June 2022, 73.8 million shares have been repurchased for about $8.0 billion. The company cites 22 consecutive years of dividend increases, and dividends declared per share rose to $0.370 from $0.340.

04—Continue

← View all 8-K filings