This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

NIKE, Inc. Reports Fiscal 2013 Third Quarter Results

Conference Call

NIKE management will host a conference call beginning at approximately 2:00 p.m. PT on March 21, 2013, to review third quarter results. The conference call will be broadcast live over the Internet and can be accessed at http://investors.nikeinc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location through 9:00 p.m. PT, March 28, 2013.

About NIKE, Inc.

NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories. For more information, NIKE’s earnings releases and other financial information are available on the Internet at http://investors.nikeinc.com and individuals can follow @Nike.

* The marked paragraphs contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by Nike with the S.E.C., including Forms 8-K, 10-Q, and 10-K. Some forward-looking statements in this release concern changes in futures orders that are not necessarily indicative of changes in total revenues for subsequent periods due to the mix of futures and “at once” orders, exchange rate fluctuations, order cancellations, discounts and returns, which may vary significantly from quarter to quarter, and because a significant portion of the business does not report futures orders.

(Additional Tables Follow)

 
NIKE, Inc.
CONSOLIDATED STATEMENTS OF INCOME
For the period ended February 28, 2013
           
THREE MONTHS ENDED % NINE MONTHS ENDED %
(Dollars in millions, except per share data)     2/28/2013       2/29/2012     Change     2/28/2013       2/29/2012     Change
Income from continuing operations:
Revenues $ 6,187 $ 5,656 9 % $ 18,616 $ 17,095 9 %
Cost of sales     3,451       3,171     9 %     10,522       9,616     9 %
Gross profit 2,736 2,485 10 % 8,094 7,479 8 %
Gross margin 44.2 % 43.9 % 43.5 % 43.7 %
 
Demand creation expense 619 592 5 % 2,103 1,872 12 %
Operating overhead expense     1,244       1,116     11 %     3,655       3,297     11 %
Total selling and administrative expense 1,863 1,708 9 % 5,758 5,169 11 %
% of revenue 30.1 % 30.2 % 30.9 % 30.2 %
 
Interest (income) expense, net (2 ) - - (6 ) 3 -
Other expense (income), net     17       (10 )   -       (28 )     17     -  
Income before income taxes 858 787 9 % 2,370 2,290 3 %
Income taxes     196       218    

-10

%

    602       580     4 %
Effective tax rate 22.8 % 27.7 % 25.4 % 25.3 %
                         
NET INCOME FROM CONTINUING OPERATIONS     662       569     16 %     1,768       1,710     3 %
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS     204       (9 )   -       49       (36 )   -  
NET INCOME   $ 866     $ 560     55 %   $ 1,817     $ 1,674     9 %
 
Earnings per share from continuing operations:
Basic earnings per common share $ 0.74 $ 0.62 19 % $ 1.97 $ 1.86 6 %
Diluted earnings per common share $ 0.73 $ 0.61 20 % $ 1.93 $ 1.82 6 %
 
Earnings per share from discontinued operations:
Basic earnings per common share $ 0.23 $ (0.01 ) - $ 0.05 $ (0.04 ) -
Diluted earnings per common share $ 0.22 $ (0.01 ) - $ 0.05 $ (0.04 ) -
 
Weighted Average Common Shares Outstanding:
Basic 893.9 915.1 898.9 921.2
Diluted 911.7 934.6 916.5 940.3
 
Dividends declared per common share   $ 0.21     $ 0.18         $ 0.60     $ 0.52      
 
Nike, Inc.
CONSOLIDATED BALANCE SHEETS
As of February 28, 2013
     
February 28, February 29,
(Dollars in millions)   2013   2012   % Change
ASSETS
Current assets:
Cash and equivalents $ 2,557 $ 2,021 27 %
Short-term investments 1,485 1,176 26 %
Accounts receivable, net 3,232 3,199 1 %
Inventories 3,329 3,206 4 %
Deferred income taxes 275 302 -9 %
Prepaid expenses and other current assets 882 745 18 %
Assets of discontinued operations     29     602   -95 %
Total current assets 11,789 11,251 5 %
Property, plant and equipment 5,370 4,988 8 %
Less accumulated depreciation     3,110     2,855   9 %
Property, plant and equipment, net 2,260 2,133 6 %
Identifiable intangible assets, net 376 366 3 %
Goodwill 131 131 0 %
Deferred income taxes and other assets     1,059     913   16 %
TOTAL ASSETS   $ 15,615   $ 14,794   6 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 57 $ 49 16 %
Notes payable 103 91 13 %
Accounts payable 1,241 1,255 -1 %
Accrued liabilities 1,899 1,798 6 %
Income taxes payable 138 59 134 %
Liabilities of discontinued operations     62     175   -65 %
Total current liabilities 3,500 3,427 2 %
Long-term debt 161 229 -30 %
Deferred income taxes and other liabilities 1,287 962 34 %
Redeemable preferred stock - - -
Shareholders' equity     10,667     10,176   5 %
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 15,615   $ 14,794   6 %
 
 
NIKE, Inc.
DIVISIONAL REVENUES 1
For the period ended February 28, 2013
               

 

 

% Change

 

 

% Change

Excluding

Excluding

THREE MONTHS ENDED

%

Currency

NINE MONTHS ENDED

%

Currency

(Dollars in millions)   2/28/2013   2/29/2012   Change  

Changes 2

  2/28/2013   2/29/2012   Change  

Changes 2

North America
Footwear $ 1,691 $ 1,470 15 % 15 % $ 4,894 $ 4,219 16 % 16 %
Apparel 697 573 22 % 22 % 2,280 1,866 22 % 22 %
Equipment     158       106     49 %   51 %     499       330     51 %   51 %
Total 2,546 2,149 18 % 18 % 7,673 6,415 20 % 20 %
Western Europe
Footwear 692 606 14 % 14 % 1,951 1,875 4 % 10 %
Apparel 298 305 -2 % -3 % 981 1,045 -6 % 0 %
Equipment     50       51     -2 %   -3 %     172       185     -7 %   -1 %
Total 1,040 962 8 % 8 % 3,104 3,105 0 % 6 %
Central & Eastern Europe
Footwear 179 161 11 % 8 % 491 476 3 % 9 %
Apparel 119 96 24 % 21 % 370 330 12 % 18 %
Equipment     20       18     11 %   10 %     65       64     2 %   9 %
Total 318 275 16 % 13 % 926 870 6 % 12 %
Greater China
Footwear 410 449 -9 % -11 % 1,090 1,116 -2 % -4 %
Apparel 196 221 -11 % -13 % 598 666 -10 % -11 %
Equipment     29       24     21 %   22 %     96       90     7 %   5 %
Total 635 694 -9 % -10 % 1,784 1,872 -5 % -6 %
Japan
Footwear 96 108 -11 % -4 % 309 311 -1 % 3 %
Apparel 65 79 -18 % -10 % 224 234 -4 % -1 %
Equipment     14       15     -7 %   -1 %     44       49     -10 %   -8 %
Total 175 202 -13 % -6 % 577 594 -3 % 0 %
Emerging Markets
Footwear 590 553 7 % 9 % 1,912 1,780 7 % 15 %
Apparel 195 187 4 % 6 % 679 602 13 % 20 %
Equipment     54       53     2 %   5 %     167       159     5 %   13 %
Total 839 793 6 % 8 % 2,758 2,541 9 % 16 %
Global Brand Divisions 3     30       27     11 %   11 %     84       84     0 %   5 %
Total NIKE Brand     5,583       5,102     9 %   10 %     16,906       15,481     9 %   12 %
Other Businesses 4 615 563 9 % 9 % 1,768 1,636 8 % 8 %
Corporate 5     (11 )     (9 )   -     -       (58 )     (22 )   -     -  
Total NIKE, Inc. Revenues From Continuing Operations   $ 6,187     $ 5,656     9 %   10 %   $ 18,616     $ 17,095     9 %   12 %
 
Total NIKE Brand
Footwear $ 3,658 $ 3,347 9 % 9 % $ 10,647 $ 9,777 9 % 12 %
Apparel 1,570 1,461 7 % 8 % 5,132 4,743 8 % 11 %
Equipment 325 267 22 % 23 % 1,043 877 19 % 22 %
Global Brand Divisions 3     30       27     11 %   11 %     84       84     0 %   5 %

1 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.

2 Fiscal 2013 results have been restated using fiscal 2012 exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment.

4 Other businesses represent activities of Converse, Hurley, and NIKE Golf.

5 Corporate revenues primarily consist of intercompany revenue eliminations and foreign currency revenue-related hedge gains and losses generated by entities within the NIKE Brand geographic operating segments and certain Other Businesses through our centrally managed foreign exchange risk management program.

 
NIKE, Inc.
EARNINGS BEFORE INTEREST AND TAXES 1,2
For the period ended February 28, 2013
           
THREE MONTHS ENDED % NINE MONTHS ENDED %
(Dollars in millions)   2/28/2013     2/29/2012     Change     2/28/2013   2/29/2012   Change
North America $ 625 $ 503 24 % $ 1,811 $ 1,468 23 %
Western Europe 178 149 19 % 505 464 9 %
Central & Eastern Europe 71 60 18 % 175 163 7 %
Greater China 218 273 -20 % 567 664 -15 %
Japan 24 24 0 % 91 93 -2 %
Emerging Markets 221 215 3 % 749 652 15 %
Global Brand Divisions 3     (324 )     (299 )   -8 %     (1,023 )     (846 )   -21 %
TOTAL NIKE BRAND     1,013       925     10 %     2,875       2,658     8 %
Other Businesses 4 128 104 23 % 329 280 18 %
Corporate 5     (285 )     (242 )   -18 %     (840 )     (645 )   -30 %
TOTAL EARNINGS BEFORE INTEREST AND TAXES   $ 856     $ 787     9 %   $ 2,364     $ 2,293     3 %
1 The Company evaluates performance of individual operating segments based on earnings before interest and taxes (also commonly referred to as “EBIT”), which represents net income before interest expense, net, and income taxes.

2 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.

3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment and selling general and administrative expenses that are centrally managed for the Nike Brand.

4 Other Businesses represent activities of Converse, Hurley, and NIKE Golf.

5 Corporate consists of unallocated general and administrative expenses, which includes expenses associated with centrally managed departments, depreciation and amortization related to the Company’s corporate headquarters, unallocated insurance and benefit programs, certain foreign currency gains and losses, including certain hedge gains and losses, corporate eliminations and other items.

 
NIKE, Inc.
NIKE BRAND REPORTED FUTURES GROWTH BY GEOGRAPHY 1
As of February 28, 2013
   
    Reported Futures Orders  

Excluding Currency Changes 2

North America 11 % 11 %
Western Europe -5 % -5 %
Central & Eastern Europe 11 % 11 %
Greater China 4 % 3 %
Japan -8 % 5 %
Emerging Markets   12 %   16 %
Total NIKE Brand Reported Futures   6 %   7 %
1 Futures orders by geography and in total for NIKE Brand athletic footwear and apparel scheduled for delivery from March 2013 through July 2013.
 
The reported futures and advance orders growth is not necessarily indicative of our expectation of revenue growth during this period. This is due to year-over-year changes in shipment timing and because the mix of orders can shift between advance/futures and at-once orders and the fulfillment of certain orders may fall outside of the schedule noted above. In addition, exchange rate fluctuations as well as differing levels of order cancellations and discounts can cause differences in the comparisons between advance/futures orders and actual revenues. Moreover, a significant portion of our revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE Brand footwear and apparel, sales of NIKE Brand equipment, sales from certain of our Direct to Consumer operations, and sales from our Other Businesses.
 
2 Reported futures restated using prior year exchange rates to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.




Stock quotes in this article: NKE 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs