Nike : Q2FY24 Financial Schedules & Key Financial Metrics

NIKE, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	THREE MONTHS ENDED	%	SIX MONTHS ENDED	%
(In millions, except per share data)	11/30/2023	11/30/2022	Change 11/30/2023	11/30/2022	Change
Revenues	$	13,388	$	13,315	1% $	26,327	$	26,002	1%
Cost of sales		7,417		7,604	-2%	14,636		14,676	0%
Gross profit		5,971		5,711	5%	11,691		11,326	3%
Gross margin		44.6 %		42.9 %		44.4 %		43.6 %
Demand creation expense		1,114		1,102	1%	2,183		2,045	7%
Operating overhead expense		3,032		3,022	0%	6,079		5,999	1%
Total selling and administrative expense		4,146		4,124	1%	8,262		8,044	3%
% of revenues		31.0 %		31.0 %		31.4 %		30.9 %
Interest expense (income), net		(22)		16	-	(56)		29	-
Other (income) expense, net		(75)		(79)	-	(85)		(225)	-
Income before income taxes		1,922		1,650	16%	3,570		3,478	3%
Income tax expense		344		319	8%	542		679	-20%
Effective tax rate		17.9 %		19.3 %		15.2 %		19.5 %
NET INCOME	$	1,578	$	1,331	19% $	3,028	$	2,799	8%
Earnings per common share:
Basic	$	1.04	$	0.85	22% $	1.99	$	1.79	11%
Diluted	$	1.03	$	0.85	21% $	1.97	$	1.77	11%
Weighted average common shares outstanding:
Basic		1,520.8		1,559.0		1,524.6		1,563.1
Diluted		1,532.1		1,572.4		1,537.7		1,579.1
Dividends declared per common share	$	0.370	$	0.340	$	0.710	$	0.645

NIKE, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 30,	November 30,
(Dollars in millions)		2023		2022	% Change
ASSETS
Current assets:
Cash and equivalents	$	7,919	$	6,490	22%
Short-term investments		2,008		4,131	-51%
Accounts receivable, net		4,782		5,437	-12%
Inventories		7,979		9,326	-14%
Prepaid expenses and other current assets		1,943		2,063	-6%
Total current assets		24,631		27,447	-10%
Property, plant and equipment, net		5,153		4,854	6%
Operating lease right-of-use assets, net		2,943		2,809	5%
Identifiable intangible assets, net		269		280	-4%
Goodwill		281		281	0%
Deferred income taxes and other assets		3,926		3,976	-1%
TOTAL ASSETS	$	37,203	$	39,647	-6%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	-	$	500	-100%
Notes payable		6		7	-14%
Accounts payable		2,709		2,810	-4%
Current portion of operating lease liabilities		456		426	7%
Accrued liabilities		5,470		6,020	-9%
Income taxes payable		358		436	-18%
Total current liabilities		8,999		10,199	-12%
Long-term debt		8,930		8,924	0%
Operating lease liabilities		2,785		2,668	4%
Deferred income taxes and other liabilities		2,343		2,584	-9%
Redeemable preferred stock		-		-	-
Shareholders' equity		14,146		15,272	-7%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	37,203	$	39,647	-6%

NIKE, Inc.

DIVISIONAL REVENUES

(Unaudited)

						% Change					% Change
	THREE MONTHS ENDED	%	Excluding	SIX MONTHS ENDED	%	Excluding
	Currency	Currency
(Dollars in millions)	11/30/2023	11/30/2022	Change		11/30/2022	Change
Changes1 11/30/2023	Changes1
North America
Footwear	$	3,757	$	3,963	-5%	-5% $	7,490	$	7,768	-4%	-3%
Apparel		1,668		1,685	-1%	-1%	3,147		3,179	-1%	-1%
Equipment		200		182	10%	10%	411		393	5%	5%
Total		5,625		5,830	-4%	-3%	11,048		11,340	-3%	-2%
Europe, Middle East & Africa
Footwear		2,186		2,063	6%	1%	4,446		4,075	9%	6%
Apparel		1,200		1,281	-6%	-10%	2,337		2,434	-4%	-7%
Equipment		181		145	25%	18%	394		313	26%	21%
Total		3,567		3,489	2%	-3%	7,177		6,822	5%	2%
Greater China
Footwear		1,361		1,370	-1%	3%	2,648		2,603	2%	7%
Apparel		469		393	19%	24%	870		767	13%	19%
Equipment		33		25	32%	36%	80		74	8%	12%
Total		1,863		1,788	4%	8%	3,598		3,444	4%	10%
Asia Pacific & Latin America
Footwear		1,303		1,108	18%	15%	2,444		2,172	13%	11%
Apparel		437		435	0%	-2%	808		848	-5%	-5%
Equipment		65		56	16%	15%	125		114	10%	9%
Total		1,805		1,599	13%	10%	3,377		3,134	8%	7%
Global Brand Divisions2		12		18	-33%	-41%	25		32	-22%	-25%
TOTAL NIKE BRAND		12,872		12,724	1%	0%	25,225		24,772	2%	2%
Converse		519		586	-11%	-13%	1,107		1,229	-10%	-11%
Corporate3		(3)		5	-	-	(5)		1	-	-
TOTAL NIKE, INC.	$	13,388	$	13,315	1%	-1% $	26,327	$	26,002	1%	1%
REVENUES
TOTAL NIKE BRAND
Footwear	$	8,607	$	8,504	1%	0% $	17,028	$	16,618	2%	2%
Apparel		3,774		3,794	-1%	-2%	7,162		7,228	-1%	-1%
Equipment		479		408	17%	15%	1,010		894	13%	12%
Global Brand Divisions2		12		18	-33%	-41%	25		32	-22%	-25%
TOTAL NIKE BRAND	$	12,872	$	12,724	1%	0% $	25,225	$	24,772	2%	2%
REVENUES

• The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

• Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

• Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through the Company's central foreign exchange risk management program.

NIKE, Inc.

EARNINGS BEFORE INTEREST AND TAXES1

(Unaudited)

	THREE MONTHS ENDED	%	SIX MONTHS ENDED	%
(Dollars in millions)	11/30/2023	11/30/2022	Change 11/30/2023	11/30/2022	Change
North America	$	1,526	$	1,497	2% $	2,960	$	2,874	3%
Europe, Middle East & Africa		927		990	-6%	1,857		1,965	-5%
Greater China		514		511	1%	1,039		1,052	-1%
Asia Pacific & Latin America		521		485	7%	935		985	-5%
Global Brand Divisions2		(1,168)		(1,226)	5%	(2,373)		(2,413)	2%
TOTAL NIKE BRAND1		2,320		2,257	3%	4,418		4,463	-1%
Converse		115		153	-25%	282		362	-22%
Corporate3		(535)		(744)	28%	(1,186)		(1,318)	10%
TOTAL NIKE, INC. EARNINGS BEFORE		1,900		1,666	14%	3,514		3,507	0%
INTEREST AND TAXES1
EBIT margin1		14.2 %		12.5 %		13.3 %		13.5 %
Interest expense (income), net		(22)		16	-	(56)		29	-
TOTAL NIKE, INC. INCOME BEFORE INCOME	$	1,922	$	1,650	16% $	3,570	$	3,478	3%
TAXES

• The Company evaluates the performance of individual operating segments based on earnings before interest and taxes (commonly referred to as "EBIT"), which represents Net income before Interest expense (income), net and Income tax expense. Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin are considered non-GAAP financial measures. Management uses these non-GAAP financial measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. EBIT margin is calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. References to EBIT and EBIT margin should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

• Global Brand Divisions primarily represent demand creation and operating overhead expense, including product creation and design expenses that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

• Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.