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NIKE, Inc. 8-K Report, Financial Results (Jun 27, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed June 27, 2024
Period End
June 27, 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 June 27, 2024. Cited figures are marked; the original filing is the authoritative source.

NIKE reported fiscal 2024 fourth-quarter and full-year results for the period ended May 31, 2024, with revenue roughly flat and profitability improving, though the company flagged near-term challenges serious enough to prompt an update to its Fiscal 2025 outlook.

Full-year revenue was $51.4 billiona, up 1% on a currency-neutral basis, while fourth-quarter revenue of $12.6 billion was down 2% reported and flat currency-neutral. Gross margin expanded 110 basis points to 44.6% for the year (44.7% in Q4), driven by strategic pricing actions and lower freight and logistics costs. Diluted EPS was $3.73 for the year and $0.99 for the quarter, including restructuring charges; excluding those charges, adjusted EPS was $3.95 and $1.01 respectively.

The quality of the quarter was mixed. NIKE Direct revenue fell 8%b in Q4 (digital down 10%, owned stores down 2%), while wholesale grew 5%, and North America declined. Converse revenue dropped 18% in the quarter and 14% for the year.

Selling and administrative expense fell 7% in Q4 as operating overhead declined on lower wage-related costs, and the effective tax rate dropped to 13.1%, which helped net income rise 45% for the quarter. Investors should note that a portion of the margin and earnings improvement came from cost reductions and tax benefits rather than top-line growth. On the balance sheet, cash and short-term investments were $11.6 billionc and inventories fell 11% to $7.5 billion, reflecting lower units.

NIKE returned about $6.4 billiond to shareholders in fiscal 2024 through $2.2 billion in dividends and $4.3 billion in buybacks, and it extended its 22-year record of rising dividend payouts. Management's updated Fiscal 2025 outlook, referenced in the CFO commentary, signals that the company is repositioning its business, and the forward-looking statements caveat indicates that actual results could differ materially from expectations.

02—Key points

Key Highlights

  1. Full-year FY2024 revenue of $51.4B, up 1% currency-neutral; Q4 revenue of $12.6B was down 2% reported and flat currency-neutral.
  2. Gross margin expanded 110 bps to 44.6% for FY2024 (44.7% in Q4), driven by strategic pricing and lower ocean freight and logistics costs.
  3. Q4 NIKE Direct revenue fell 8% (digital down 10%), while wholesale rose 5%, indicating a shift in channel mix and weakness in direct-to-consumer sales.
  4. Diluted EPS of $3.73 for FY2024 (GAAP) and $3.95 excluding restructuring charges; Q4 EPS of $0.99 (GAAP) and $1.01 adjusted.
  5. Q4 net income rose 45% to $1.5B, aided by a lower effective tax rate of 13.1% versus 17.3% a year earlier.
  6. Management updated its Fiscal 2025 outlook after challenges in Q4, and is taking actions to reposition the company for competitiveness.
  7. Shareholder returns totaled $6.4B in FY2024 ($2.2B dividends, $4.3B buybacks), with inventories down 11% and cash plus short-term investments at $11.6B.

03—Questions

Frequently Asked Questions

  1. Did NIKE grow revenue in fiscal 2024?

    Modestly. Full-year revenue was $51.4B, up about 1% on a currency-neutral basis, though reported growth was essentially flat versus $51.2B in fiscal 2023. Fourth-quarter revenue was down 2% reported and flat currency-neutral, showing that growth slowed late in the year.

  2. Why did profitability improve even though sales were flat?

    Gross margin rose 110 basis points, mainly from strategic pricing actions and lower ocean freight and logistics costs. Selling and administrative expense also fell in Q4 (down 7%), largely from lower wage-related costs in operating overhead, and the effective tax rate declined, boosting net income.

  3. What is the concern about NIKE Direct and Converse?

    NIKE Direct revenue fell 8% in Q4, with NIKE Brand Digital down 10%, suggesting weaker direct-to-consumer demand. Converse revenue declined 18% in Q4 and 14% for the year, driven by North America and Western Europe, which investors may view as signs of broader brand pressure.

  4. Is NIKE's shareholder return program still intact?

    Yes. The company returned about $6.4B in fiscal 2024, including $2.2B in dividends (up 8%) and $4.3B in share repurchases under its $18B four-year program. It also extended its streak of 22 consecutive years of rising dividend payouts.

  5. What should investors watch going forward?

    Investors should watch the updated Fiscal 2025 outlook, the pace of recovery in North America and NIKE Direct, and whether margin gains from pricing and cost reductions can persist. The filing's forward-looking statements caveat that actual results could differ materially from current expectations.

04—Continue

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