NIKE, Inc. Reports Fiscal 2022 Fourth Quarter And Full Year Results

BEAVERTON, Ore., June 27, 2022 — NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2022 fourth quarter and full year ended May 31, 2022.

Fourth quarter reported revenues were $12.2 billion, down 1 percent compared to prior year and up 3 percent on a currency-neutral basis*
NIKE Direct reported revenues for the fourth quarter were $4.8 billion, up 7 percent compared to prior year and up 11 percent on a currency-neutral basis
Wholesale reported revenues for the fourth quarter were $6.8 billion, down 7 percent compared to prior year and down 3 percent on a currency-neutral basis
Gross margin for the fourth quarter decreased 80 basis points to 45 percent.
Diluted earnings per share was $0.90 for the fourth quarter
The Company announced its Board of Directors has authorized a new four-year, $18 billion program to repurchase shares of NIKE's Class B Common Stock
“NIKE’s results this fiscal year are a testament to the unmatched strength of our brands and our deep connection with consumers," said John Donahoe, President and CEO, NIKE, Inc. “Our competitive advantages, including our pipeline of innovative product and expanding digital leadership, prove that our strategy is working as we create value through our relentless drive to serve the future of sport."**

Fourth quarter NIKE Direct revenues grew 7 percent on a reported basis and 11 percent on a currency-neutral basis, led by 25 percent growth in EMEA, 43 percent growth in APLA and 5 percent growth in North America, partially offset by a decline in Greater China. NIKE Brand Digital grew 15 percent on a reported basis and 18 percent on a currency-neutral basis, driven by double digit growth in APLA, North America and EMEA. NIKE-owned stores declined 2 percent on a reported basis and increased 1 percent on a currency-neutral basis.

“In this dynamic environment, NIKE's unrivaled strengths continue to fuel our momentum,” said Matt Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. "Two years into executing our Consumer Direct Acceleration, we are better positioned than ever to drive long-term growth while serving consumers directly at scale."**

Non-recurring Items Impacting Comparability in the Fourth Quarter
Fourth quarter results contain several non-comparable items, including non-recurring charges recorded in Other (income) expense, net, totaling approximately $150 million, associated with the deconsolidation of our Russian operations, and the transition of our businesses in Argentina, Chile and Uruguay to strategic distributor models.

Fourth Quarter Income Statement Review

Fiscal 2022 Income Statement Review

Revenues for NIKE, Inc. increased 5 percent to $46.7 billion, up 6 percent on a currency- neutral basis.
Revenues for the NIKE Brand were $44.4 billion, up 5 percent on a reported basis and 6 percent on a currency-neutral basis, driven by double-digit growth in NIKE Direct, partially offset by slight declines in wholesale revenues.
NIKE Direct revenues were $18.7 billion, up 14 percent on a reported basis and up 15 percent on a currency-neutral basis, led by NIKE Brand digital growth of 18 percent and NIKE-owned stores were up 10 percent.
Revenues for Converse were $2.3 billion, up 6 percent on a reported basis and up 7 percent on a currency-neutral basis, led by double-digit growth in our direct to consumer business, partially offset by lower wholesale revenues.
Gross margin increased 120 basis points to 46.0 percent, primarily due to margin expansion in our NIKE Direct business, a higher mix of full-price sales and favorable changes in net foreign currency exchange rates, including hedges, partially offset by elevated freight and logistics costs and higher inventory obsolescence reserves in Greater China in the fourth quarter.
Selling and administrative expense increased 14 percent to $14.8 billion.
Demand creation expense was $3.9 billion, up 24 percent compared to prior year, primarily due to normalization of spend against brand campaigns and continued investments in digital marketing to support heightened digital demand.
Operating overhead expense increased 11 percent to $11.0 billion due to higher strategic technology investments, and an increase in wage-related expenses and NIKE Direct variable costs.
The effective tax rate was 9.1 percent, compared to 14.0 percent for the same period last year, due to a shift in our earnings mix and a non-cash, one-time benefit related to the onshoring of our non-U.S. intangible property.
Net income was $6.0 billion, up 6 percent, and Diluted earnings per share was $3.75, up 5 percent compared to prior year.

May 31, 2022 Balance Sheet Review

In the fourth quarter, the Company returned approximately $1.5 billion to shareholders, including:

Dividends of $481 million, up 11 percent from prior year.
Share repurchases of $1.1 billion, reflecting 8.5 million shares retired as part of the four-year, $15 billion program approved by the Board of Directors in June 2018.
In fiscal 2022, the Company returned approximately $5.8 billion to shareholders, including:

Dividends of $1.8 billion, up 12 percent from prior year.

Share repurchases of $4.0 billion, reflecting 27.3 million shares retired. As of May 31, 2022, a total of 77.4 million shares for $8.7 billion had been repurchased under the current program.

In June 2022, the Board of Directors authorized a new four-year, $18 billion program to repurchase shares of NIKE's Class B common stock. The Company's new program will replace the current $15 billion share repurchase program, which will be terminated in fiscal year 2023. Repurchases under the Company's new program will be made in open market or privately negotiated transactions in compliance with the Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements and other relevant factors. The new share repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company's discretion.