NIKE, Inc. Reports Fiscal 2009 Fourth Quarter and Full Year Results

Business Wire, June 24, 2009

Select Results:

• Fourth quarter revenue down 7 percent to $4.7 billion, flat with the prior year excluding currency changes
• Fiscal 2009 revenue up 3 percent to $19.2 billion, up 4 percent excluding currency changes
• Fourth quarter diluted EPS of $0.70; excluding non-comparable items, diluted EPS up 5 percent to $0.99
• Fiscal 2009 diluted EPS of $3.03; excluding non-comparable items, diluted EPS up 10 percent to $3.81
• Worldwide futures orders down 12 percent, down 5 percent excluding currency changes
• Inventories down 3% versus prior year

BEAVERTON, Ore. -- NIKE, Inc. (NYSE:NKE) today reported financial results for the 2009 fiscal fourth quarter and full year ended May 31, 2009. Fourth quarter revenues decreased 7 percent to $4.7 billion, compared to $5.1 billion for the same period last year. Excluding changes in currency exchange rates, net revenue was essentially flat with the same period last year. For the full year, revenues grew 3 percent to $19.2 billion, compared to $18.6 billion last year. Excluding currency changes, net revenue was up 4 percent for the year. Fourth quarter net income decreased 30 percent to $341.4 million and diluted earnings per share decreased 29 percent to $0.70. Fiscal 2009 net income decreased 21 percent to $1.5 billion and diluted earnings per share decreased 19 percent to $3.03.

Results Excluding Non-comparable Items

Current and prior year results include a number of non-comparable items. In the fourth quarter of 2009, NIKE, Inc. realized a $195.0 million pre-tax restructuring charge associated with its previously announced corporate restructuring and cost reduction realignment. On an after-tax basis, the restructuring charge totaled $144.5 million, which decreased fourth quarter diluted earnings per share by $0.29. In the third quarter of 2009, the Company incurred a $240.7 million after-tax impairment charge related to its Umbro subsidiary. Fiscal 2008 results included $35.4 million in after-tax gains related to the sale of Bauer Hockey and the Starter Business, and a $105.4 million one-time tax benefit.

Excluding current and prior year non-comparable items, fourth quarter net income increased 3 percent to $485.9 million, and diluted earnings per share increased 5 percent to $0.99. For the full-year, comparable net income increased 7 percent to $1.9 billion and diluted earnings per share increased 10 percent to $3.81.

“Fiscal 2009 was a year that challenged companies to leverage core strengths and adapt quickly to a changing landscape. Our strong results demonstrate that we are meeting these challenges and seizing the opportunity to optimize our position as the industry leader,” said Mark Parker, President and CEO of NIKE, Inc. “By focusing on what Nike does best – creating great product, telling great stories, and connecting with consumers – I believe that we will become a stronger, more profitable, and more valuable company for our shareholders. We’ve made some tough decisions over the past year, yet given our ability to increase our competitive separation through product innovation and brand relevance across our portfolio of businesses, I remain strongly optimistic about our long-term potential.”*

Futures Orders

The Company reported worldwide futures orders for Nike brand athletic footwear and apparel, scheduled for delivery from June 2009 through November 2009, totaling $7.8 billion, 12 percent lower than orders reported for the same period last year. Excluding currency changes, reported orders would have declined 5 percent.*

By region, futures orders for the U.S. were down 4 percent; EMEA (which includes Europe, the Middle East and Africa) declined 24 percent; Asia Pacific decreased 5 percent; and the Americas dropped 7 percent. Excluding currency changes, futures orders would have declined 11 percent in EMEA, decreased 3 percent in Asia Pacific and increased 15 percent in the Americas region.

Regional Highlights

U.S.

During the fourth quarter, U.S. revenues decreased 2 percent to $1.6 billion. Footwear increased 2 percent to $1.2 billion, apparel revenues decreased 15 percent to $379.8 million and equipment revenues were up 2 percent to $85.5 million. Apparel revenue was down significantly compared to the prior year due to challenging market conditions and a strategic decision to optimize the product assortment. U.S. pre-tax income declined 5 percent to $375.7 million.

For the full fiscal year, U.S. revenues were up 2 percent to $6.5 billion. Footwear revenues increased 5 percent to $4.6 billion, apparel revenues were down 5 percent to $1.7 billion and equipment revenues declined 4 percent to $327.7 million. U.S. pre-tax income decreased 5 percent to $1.3 billion for the fiscal year.