This summary is based on the fourth quarter fiscal 2008 earnings call conducted by NIKE, Inc. (NKE) on June 25, 2008.
Management:
VP IR: Pamela Catlett
CEO: Mark Parker
President NIKE Brands: Charlie Denson
CFO: Don Blair
Key Investors Issues
- EPS were 98 cents a share compared to 86 cents a share last year.
- Net income was $490.5 million compared to $437.9 million in the year-earlier period.
- Sales jumped 16% to $5.1 billion.
Fourth Quarter Highlights
Revenues increased 16% to $5.1 billion, compared to $4.4 billion for the same period last year.
Net income increased 12% to $490.5 million, compared to $437.9 million in the prior year, and earnings per share increased 14% to 98 cents, versus 86 cents last year. Changes in currency exchange rates increased revenue growth by 7 percentage points.
The company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from June 2008 through November 2008, totaling $8.8 billion, 11% higher than such orders reported for the same period last year.
- Changes in currency exchange rates increased reported orders growth by 3 percentage points.
- By region, futures orders for the U.S. were flat to last year; Europe (which includes the Middle East and Africa) increased 10%, Asia Pacific grew 31%, and the Americas increased 30%. Changes in currency exchange rates increased reported futures orders growth in Europe by 6 percentage points, by 7 percentage points in the Asia Pacific region, and by 1 percentage point in the Americas region.
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U.S. revenues increased 4% to $1.7 billion versus $1.6 billion for the same period last year.
- Footwear revenues increased 6% to $1.1 billion.
- Apparel revenues increased 2% to $447.9 million.
- Equipment revenues decreased 15% to $78.2 million.
- U.S. pre-tax income declined 10% to $390.7 million.
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Revenues for the European region grew 19% to $1.5 billion from $1.3 billion for the same period last year. Changes in currency exchange rates increased revenue growth by 15 percentage points.
- Footwear revenues increased 17% to $889.2 million.
- Apparel revenues grew by 22% to $531.1 million and equipment revenues increased 16% to $113.9 million.
- Pre-tax income increased 8% to $326.2 million.
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Revenues for the Asia Pacific region grew 39% to $828 million compared to $596.9 million a year ago. Changes in currency exchange rates increased revenue growth by 13 percentage points.
- Footwear revenues were up 42% to $422 million, apparel revenues increased 40% to $337.7 million and equipment revenues grew 14% to $68.3 million.
- Pre-tax income increased 32% to $166 million.
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Revenues in the Americas region increased 30% to $306.6 million compared to the same period last year. Changes in currency exchange rates increased revenue growth by 11 percentage points.
- Footwear revenues were up 19% to $202.1 million, apparel revenues increased 77% to $78.9 million and equipment revenues rose 22% to $25.6 million.
- Pre-tax income was up 53% to $60.8 million for the quarter.
Other business revenues, which include, Converse Inc., NIKE Golf, Cole Haan, NIKE Bauer Hockey, Hurley International LLC, and Umbro Ltd. grew 15% to $749.5 million and pre-tax income was up 2% to $92.9 million.
- Gross margins were 45.8% compared to 43.8% for the same period last year.
- Selling and administrative expenses were 33.1% of revenue compared to 29% for the same period last year.
- The effective tax rate was 24.3% compared to 33.5% for the same period last year, benefiting from a larger proportion of earnings coming from outside the United States where the company benefits from lower tax rates.
- The company purchased a total of 4,447,605 shares for approximately $290 million in conjunction with the company’s four-year, $3 billion share repurchase program approved by the Board of Directors in June 2006.
Fourth Quarter 2008 Highlights
- Revenues grew 14% to $18.6 billion, compared to $16.3 billion last year.
- Net income increased 26% to $1.9 billion, compared to $1.5 billion last year, and earnings per share increased 28% to $3.74 versus $2.93 last year.
- Changes in currency exchange rates increased revenue growth by 5 percentage points.
- U.S. revenues were up 4% to $6.4 billion.
- Footwear revenues increased 6% to $4.3 billion, apparel revenues grew 2% to $1.7 billion and equipment revenues decreased 5% to $306.1 million.
- U.S. pre-tax income increased 2% to $1.4 billion.
