Nike FY'13 revenues rise 8 percent

REPORT_ Nike reported fiscal 2013 financial results for its fourth quarter and full year ended May 31, 2013. For continuing operations, strong demand for Nike brands drove fourth quarter revenue to 6.7 billion dollars, up 7

percent, or 9 percent on a currency neutral basis. Fourth quarter diluted EPS from continuing operations grew faster than revenue, up 27 percent, mainly as a result of gross margin expansion, a lower effective tax rate and a lower average share count.

Fiscal 2013 revenues from continuing operations were 25.3 billion dollars, up 8 percent, or 11 percent excluding the impact of changes in foreign currency. For continuing operations, fiscal 2013 diluted EPS growth outpaced revenue growth, up 11 percent to 2.69 dollars, primarily due to gross margin improvement, a lower tax rate and a lower average share count, which more than offset the impact of SG&A deleverage.

“Fiscal 2013 was a great year for Nike, driven by our innovative products and the power of our brands,” said Mark Parker, President and CEO of Beaverton-based Nike, adding, “And we’re excited about what lies ahead. We have the best leadership team in the industry and a deep innovation pipeline. Both are aligned against our biggest opportunities to drive growth, manage risk and drive long-term shareholder value.”

Nike Q4 2013 brand revenues higher in running, basketball and men's and women's training

In the fourth quarter, brand revenues rose 8 percent with growth across each product type and in every geography except Western Europe and Greater China. For the fourth quarter, Nike Brand revenues were higher in running, basketball, men’s training, and women’s training, offsetting slight declines in sportswear, action sports and football (soccer), which reflects comparisons to strong sales in advance of the European Football Championships in 2012. Revenues for other businesses grew 10 percent, including a 1 point reduction from changes in currency exchange rates, as revenues increased for each business during the quarter.

Net income increased 25 percent to 696 million dollars while diluted earnings per share increased 27 percent to 0.76 dollars, reflecting a 2 percent decline in the number of weighted average diluted common shares outstanding.

For the fiscal 2013 Nike Brand revenues rose 11 percent excluding the impact of changes in foreign currency, driven by growth in each key category, product type and geography except Greater China. On a currency-neutral basis, Nike Brand wholesale revenues increased 8 percent to 18.4 billion dollars, while direct to consumer revenues grew 24 percent to 4.3 billion dollars, driven by 14 percent growth in same store sales and new door expansion. As of May 31, 2013 the Nike Brand had 645 DTC stores in operation as compared to 557 a year ago.

Revenues for other businesses grew 9 percent with no significant impact from changes in foreign currency exchange rates, driven by growth across all businesses. Gross margin increased 10 basis points to 43.6 percent, primarily driven by higher selling prices and easing material costs. These positive factors were largely offset by higher labor costs, unfavorable changes in foreign exchange rates, a shift in the mix of the Company’s revenues to lower margin geographies, products and businesses, and higher discounts, particularly in Greater China.

As of the end of the quarter, worldwide futures orders for Nike Brand athletic footwear and apparel, scheduled for delivery from June through November 2013 totaled 12.1 billion dollars, 8 percent higher than orders reported for the same period last year. Changes in foreign currency exchange rates did not have a significant impact on total reported futures orders growth.