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What changed in Nike, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Nike, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+346 added−342 removedSource: 10-K (2024-07-25) vs 10-K (2023-07-20)

Top changes in Nike, Inc.'s 2024 10-K

346 paragraphs added · 342 removed · 299 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+7 added−3 removed42 unchanged
Biggest changeDonahoe, 63, was appointed President and Chief Executive Officer in January 2020 and has been a director since 2014. He brings expertise in digital commerce, technology and global strategy. He previously served as President and Chief Executive Officer at ServiceNow, Inc. Prior to joining ServiceNow, Inc., he served as President and Chief Executive Officer of eBay, Inc.
Biggest changeDonahoe, 64, joined NIKE in 2014 as a member of the Board of Directors and has served as President and Chief Executive Officer of NIKE, Inc. since January 2020. He is responsible for NIKE’s global business portfolio, which includes the NIKE, Jordan and Converse brands. Prior to joining NIKE, Mr.
MANUFACTURING Nearly all of our footwear and apparel products are manufactured outside the United States by independent manufacturers ("contract manufacturers"), many of which operate multiple factories. We are also supplied, primarily indirectly, by a number of materials, or "Tier 2" suppliers, who provide the principal materials used in footwear and apparel finished goods products.
MANUFACTURING Nearly all of our footwear and apparel products are manufactured outside the United States by independent contract manufacturers ("contract manufacturers"), many of which operate multiple factories. We are also supplied, primarily indirectly, by a number of materials, or "Tier 2" suppliers, who provide the principal materials used in footwear and apparel finished goods products.
Important aspects of competition in this industry are: • Product attributes such as quality; performance and reliability; new product style, design, innovation and development; as well as consumer price/value. • Consumer connection, engagement and affinity for brands and products, developed through marketing, promotion and digital experiences; social media interaction; customer support and service; identification with prominent and influential athletes, influencers, public figures, coaches, teams, colleges and sports leagues who endorse our brands and use our products and active engagement through sponsored sporting events and clinics. • Effective sourcing and distribution of products, with attractive merchandising and presentation at retail, both in-store and on digital platforms.
Important aspects of competition in this industry are: • Product attributes such as quality; innovation and development; performance and reliability; new product style, and design; as well as consumer price/value. • Consumer connection, engagement and affinity for brands and products, developed through marketing, promotion and digital experiences; social media interaction; customer support and service; identification with prominent and influential athletes, influencers, public figures, coaches, teams, colleges and sports leagues who endorse our brands and use our products and active engagement through sponsored sporting events and clinics. • Effective sourcing and distribution of products, with attractive merchandising and presentation at retail, both in-store and on digital platforms.
We believe providing for growth and retention of our employees is essential in fostering such a culture and are dedicated to giving access to training programs and career development opportunities, including trainings on NIKE's values, history and business, trainings on developing leadership skills at all levels, tools and resources for managers and qualified tuition reimbursement opportunities.
We believe providing for growth and retention of our employees is essential in fostering such a culture and are dedicated to providing access to training programs and career development opportunities, including trainings on NIKE's values, history and business, trainings on developing leadership skills at all levels, tools and resources for managers and qualified tuition reimbursement opportunities.
Using market intelligence and research, our various design teams identify opportunities to leverage new technologies in existing categories to respond to consumer preferences. The proliferation of Nike Air, Zoom, Free, Dri-FIT, Flyknit, FlyEase, ZoomX, Air Max, React and Forward technologies, among others, typifies our dedication to designing innovative products.
Using market intelligence and research, our various design teams identify opportunities to leverage new technologies in existing categories to respond to consumer preferences. The proliferation of Nike Air, Zoom, Free, Dri-FIT, Flyknit, FlyEase, ZoomX, Air Max, and React technologies, among others, typifies our dedication to designing innovative products.
We continue to enhance our efforts to recruit diverse talent through our traditional channels and through initiatives, such as partnerships with athletes and sports-related organizations to create apprenticeship programs and new partnerships with organizations, colleges and universities that serve diverse populations.
We continue our efforts to recruit talent through our traditional channels and through initiatives, such as partnerships with athletes and sports-related organizations to create apprenticeship programs and new partnerships with organizations, colleges and universities that serve diverse populations.
Our initiatives in this area include: • We are committed to competitive pay and to reviewing our pay and promotion practices annually. • We have an annual company bonus plan and a retail-focused bonus plan applicable to all eligible employees.
Our initiatives in this area include: • We are committed to competitive pay, pay equity and to reviewing our pay and promotion practices annually. • We have an annual company bonus plan and a retail-focused bonus plan applicable to all eligible employees.
We have followed a policy of applying for and registering intellectual property rights in the United States and select foreign countries on trademarks, inventions, innovations and designs that we deem valuable.
We have followed a policy of applying for and registering intellectual property rights in the United States and select foreign countries on trademarks, inventions, innovations and designs that we deem protectable and valuable.
However, we believe we could abate any such disruption, and that much of the adverse impact on supply would, therefore, be of a short-term nature, although alternate sources of supply might not be as cost-effective and could have an ongoing adverse impact on profitability. 2023 FORM 10-K 4 Table of Contents Our international operations are also subject to compliance with the U.S.
However, we believe we could abate any such disruption, and that much of the adverse impact on supply would, therefore, be of a short-term nature, although alternate sources of supply might not be as cost-effective and could have an ongoing adverse impact on profitability. 2024 FORM 10-K 4 Table of Contents Our international operations are also subject to compliance with the U.S.
Because NIKE is a consumer products company, the relative popularity and availability of various sports and fitness activities, as well as changing design trends, affect the demand for our products.
Because NIKE is a consumer products company, the relative popularity and availability of various sports and fitness activities, as well as changing design trends and consumer preferences, affect the demand for our products.
Health Plan, including access to both restorative services and personal care. • We provide all U.S. employees with unlimited free financial coaching through a third-party provider. Additional information related to our human capital strategy can be found in our FY22 NIKE, Inc. Impact Report, which is available on the Impact section of about.nike.com.
Health Plan, including access to both restorative services and personal care. • We provide all U.S. employees with unlimited free financial coaching through a third-party provider. Additional information related to our human capital strategy can be found in our FY23 NIKE, Inc. Impact Report, which is available on the Impact section of about.nike.com.
We also have Employee Networks, collectively known as NikeUNITED, representing various employee groups. 2023 FORM 10-K 6 Table of Contents Our DE&I focus extends beyond our workforce and includes our communities, which we support in a number of ways. We have committed to investments that aim to address racial inequality and improve diversity and representation in our communities.
We also have Employee Networks, collectively known as NikeUNITED, representing various employee groups. 2024 FORM 10-K 6 Table of Contents Our DE&I focus extends beyond our workforce and includes our communities, which we support in a number of ways. We have committed to investments that aim to address racial inequality and improve diversity and representation in our communities.
We consider our NIKE and Swoosh Design trademarks to be among our most valuable assets and we have registered these trademarks in over 190 jurisdictions worldwide. In addition, we own many other trademarks that we use in marketing our products. We own common law rights in the trade dress of several distinctive shoe designs and elements.
We consider our NIKE and Swoosh Design trademarks to be among our most valuable assets and we have registered these trademarks in over 190 jurisdictions worldwide. In addition, we own many other trademarks that we use in marketing our products. Throughout the world, we own common law rights in the trade dress of several distinctive shoe designs and elements.
We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital"), to retail accounts and to a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.
We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.
We compete internationally with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies and large companies having diversified lines of athletic and leisure footwear, apparel and equipment, including adidas, Anta, ASICS, Li Ning, lululemon athletica, New Balance, Puma, Under Armour and V.F. Corporation, among others.
We compete internationally with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies and large companies having diversified lines of athletic and leisure footwear, apparel and equipment, including adidas, Anta, ASICS, Deckers, Li Ning, lululemon athletica, New Balance, On, Puma, Under Armour and V.F. Corporation, among others.
We sell our products to thousands of retail accounts in the United States, including a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops and other retail accounts. In the United States, we utilize NIKE sales offices to solicit such sales.
We sell our products to thousands of wholesale accounts in the United States, including a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops and other wholesale accounts. In the United States, we utilize NIKE sales offices to solicit such sales.
NIKE has never experienced a material interruption of operations due to labor disagreements. DIVERSITY, EQUITY AND INCLUSION Diversity, equity and inclusion ("DE&I") is a strategic priority for NIKE and we are committed to having an increasingly diverse team and culture.
NIKE has never experienced a material interruption of operations due to labor disagreements. DIVERSITY, EQUITY AND INCLUSION Diversity, equity and inclusion ("DE&I") is a strategic priority for NIKE and we are committed to having an inclusive and diverse team and culture.
We also continue to vigorously protect our intellectual property, including trademarks, patents and trade secrets against third-party infringement and misappropriation. 2023 FORM 10-K 5 Table of Contents HUMAN CAPITAL RESOURCES At NIKE, we consider the strength and effective management of our workforce to be essential to the ongoing success of our business.
We also continue to vigorously protect and enforce our intellectual property, including trademarks, patents and trade secrets against third-party infringement and misappropriation. 2024 FORM 10-K 5 Table of Contents HUMAN CAPITAL RESOURCES At NIKE, we consider the strength and effective management of our workforce to be essential to the ongoing success of our business.
The largest single finished goods footwear factory accounted for approximately 9% of total fiscal 2023 NIKE Brand footwear production. For fiscal 2023, factories in Vietnam, Indonesia and China manufactured approximately 50%, 27% and 18% of total NIKE Brand footwear, respectively.
The largest single finished goods footwear factory accounted for approximately 9% of total fiscal 2024 NIKE Brand footwear production. For fiscal 2024, factories in Vietnam, Indonesia and China manufactured approximately 50%, 27% and 18% of total NIKE Brand footwear, respectively.
Both programs are focused on rewarding employees for company performance, which we believe reinforces our culture and rewards behaviors that support collaboration and teamwork. • We provide comprehensive family care benefits in the U.S. and globally where practicable, including family planning coverage, backup care and child/elder care assistance as well as an income-based childcare subsidy for eligible employees. • Our Military Leave benefit provides up to 12 weeks of paid time off every 12 months. • We offer free access to our Sport Centers at our world headquarters for our full-time employees and North America store employees. • We provide employees free access to mindfulness and meditation resources, as well as live classes through our Sport Centers. • We provide all employees and their families globally with free and confidential visits with a mental health counselor through a third-party provider and our global Employee Assistance Program (EAP). • We provide support to our employees in a variety of ways during times of crisis, including pay continuity under certain circumstances, our natural disaster assistance program, and ongoing support for challenges related to the COVID-19 pandemic. • We provide a hybrid work approach for the majority of employees, as well as a Four Week Flex, which provides employees an opportunity to work from a location of their choice for up to four weeks per year. • We offer a Well-Being Week where we close our corporate offices for a full-week in the summer and Well-Being Days for our teammates in our retail stores and distribution centers, and encourage our teammates to focus on their well-being. • We provide inclusive family planning benefits and transgender healthcare coverage for eligible employees covered on the U.S.
Both programs are focused on rewarding employees for company performance, which we believe reinforces our culture and rewards behaviors that support collaboration and teamwork. • We provide comprehensive family care benefits in the U.S. and globally where practicable, including family planning coverage, backup care and child/elder care assistance as well as an income-based childcare subsidy for eligible employees. • Our Military Leave benefit provides up to 12 weeks of paid time off every 12 months. • We offer free access to our sport centers at our World Headquarters for our full-time employees and North America store employees. • We provide employees free access to mindfulness and meditation resources, as well as live classes through our sport centers. • We provide all employees and their families globally with free and confidential visits with a mental health counselor through a third-party provider and our global Employee Assistance Program (EAP). • We provide support to our employees in a variety of ways during times of crisis, including pay continuity under certain circumstances, and our natural disaster assistance program. • We provide a hybrid work approach for the majority of employees, as well as a Four Week Flex program, which provides employees an opportunity to work remotely for up to four weeks per year. • We offer a Well-Being Week where we close our corporate offices for a full week in the summer and Well-Being Days for our teammates in our retail stores and distribution centers, and encourage our teammates to focus on their well-being. • We provide inclusive family planning benefits and transgender healthcare coverage for eligible employees covered on the U.S.
The focus of this investment continues to be inspiring kids to be active through play and sport as well as uniting and inspiring communities to create a better and more equitable future for all.
The focus of this investment continues to be inspiring youth to be active through play and sport as well as uniting and inspiring communities to create a better and more equitable future for all.
During fiscal 2023, Air Manufacturing Innovation, a wholly-owned subsidiary, with facilities near Beaverton, Oregon, in Dong Nai Province, Vietnam, and St. Charles, Missouri, as well as contract manufacturers in China and Vietnam, were our suppliers of NIKE Air-Sole cushioning components used in footwear.
During fiscal 2024, Air Manufacturing Innovation, a wholly-owned subsidiary, with facilities near Beaverton, Oregon, in Dong Nai Province, Vietnam, and St. Charles, Missouri, as well as contract manufacturers in China and Vietnam, were our suppliers of NIKE Air-Sole and other cushioning components used in footwear.
Additionally, we are prioritizing DE&I education so that all NIKE employees and leaders have the cultural awareness and understanding to lead inclusively and build diverse and inclusive teams.
Additionally, we are prioritizing DE&I education so that all NIKE employees and leaders have the cultural knowledge and understanding to lead inclusively and build diverse and inclusive teams.
As part of our commitment to make a positive impact on our communities, we maintain a goal of investing 2% of our prior fiscal year's pre-tax income into global communities.
As part of our commitment to making a positive impact on our communities, we maintain a goal of investing 2% of our prior fiscal year's pre-tax income into global communities.
Since joining NIKE, she has held a variety of key roles, including leading NIKE's marketplace and four geographic operating regions, leading NIKE Direct and accelerating NIKE's retail and digital-commerce business and creating and leading NIKE's Women’s business. Prior to NIKE, Ms. O'Neill held roles at Levi Strauss & Company and Foote, Cone & Belding.
Since joining NIKE, she has held a variety of key roles, including leading NIKE's marketplace and four geographic operating regions, leading NIKE Direct and NIKE's retail and digital-commerce business and creating and leading NIKE's Women’s business. Prior to joining NIKE, Ms. O'Neill held roles at Levi Strauss & Company and was a Vice President at Foote, Cone & Belding.
We aim to foster an inclusive and accessible workplace through recruitment, development and retention of diverse talent with the goal of expanding representation across all dimensions of diversity over the long term.
We aim to foster an inclusive and accessible workplace through recruitment, development and retention of talent from diverse experiences and backgrounds with the goal of expanding representation across all dimensions of diversity over the long term.
Refer to Item 1A. Risk Factors. OUR MARKETS We report our NIKE Brand operations based on our internal geographic organization. Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment.
This is a continuing risk. Refer to Item 1A. Risk Factors. OUR MARKETS We report our NIKE Brand operations based on our internal geographic organization. Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment.
We must, therefore, respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories and influencing sports and fitness preferences through extensive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability. This is a continuing risk.
We must, therefore, respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings and channels, developing new products, styles and categories and influencing sports and fitness preferences through extensive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability.
For fiscal 2023, one apparel contract manufacturer accounted for more than 10% of apparel production, and the top five contract manufacturers in the aggregate accounted for approximately 52% of NIKE Brand apparel production. NIKE's contract manufacturers buy raw materials for the manufacturing of our footwear, apparel and equipment products.
For fiscal 2024, one apparel contract manufacturer accounted for more than 10% of apparel production, and the top five contract manufacturers in the aggregate accounted for approximately 51% of NIKE Brand apparel production. NIKE's contract manufacturers buy raw materials for the manufacturing of our footwear, apparel and equipment products.
During fiscal 2023, our three largest United States customers accounted for approximately 22% of sales in the United States. Our NIKE Direct and Converse direct to consumer operations sell our products to consumers through various digital platforms.
During fiscal 2024, our three largest United States customers accounted for approximately 21% of sales in the United States. Our NIKE Direct and Converse direct to consumer operations sell our products to consumers through various digital platforms.
Information contained on or accessible through our website is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only. 2023 FORM 10-K 7 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of NIKE, Inc. as of July 20, 2023, are as follows: Mark G.
Information contained on or accessible through our website is not incorporated into, and does not form a part of, this Annual Report or any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only. 2024 FORM 10-K 7 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of NIKE, Inc. as of July 25, 2024, are as follows: Mark Parker , Executive Chairman — Mr.
UNITED STATES MARKET For fiscal 2023, NIKE Brand and Converse sales in the United States accounted for approximately 43% of total revenues, compared to 40% and 39% for fiscal 2022 and fiscal 2021, respectively.
UNITED STATES MARKET For fiscal 2024, NIKE Brand and Converse sales in the United States accounted for approximately 42% of total revenues, compared to 43% and 40% for fiscal 2023 and fiscal 2022, respectively.
Refer to Item 2. Properties for further information. 2023 FORM 10-K 2 Table of Contents INTERNATIONAL MARKETS For fiscal 2023, non-U.S. NIKE Brand and Converse sales accounted for approximately 57% of total revenues, compared to 60% and 61% for fiscal 2022 and fiscal 2021, respectively.
Refer to Item 2. Properties for additional information. 2024 FORM 10-K 2 Table of Contents INTERNATIONAL MARKETS For fiscal 2024, non-U.S. NIKE Brand and Converse sales accounted for approximately 58% of total revenues, compared to 57% and 60% for fiscal 2023 and fiscal 2022, respectively.
We sell our products to retail accounts through our own NIKE Direct operations and through a mix of independent distributors, licensees and sales representatives around the world. We sell to thousands of retail accounts and ship products from 67 distribution centers outside of the United States. Refer to Item 2.
We sell our products through NIKE Direct operations and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives around the world. We sell to thousands of retail accounts and ship products from 68 distribution centers outside of the United States. Refer to Item 2.
As of May 31, 2023, we had 146 strategic Tier 2 suppliers. As of May 31, 2023, our contract manufacturers operated 123 finished goods footwear factories located in 11 countries. For fiscal 2023, NIKE Brand footwear finished goods were manufactured by 15 contract manufacturers, many of which operate multiple factories.
As of May 31, 2024, we had 169 strategic Tier 2 suppliers. As of May 31, 2024, our contract manufacturers operated 96 finished goods footwear factories located in 11 countries. For fiscal 2024, NIKE Brand footwear finished goods were manufactured by 15 contract manufacturers, many of which operate multiple factories.
We also utilize independent contractors and temporary personnel to supplement our workforce. None of our employees are represented by a union, except certain employees in the EMEA and APLA geographies are members of and/or represented by trade unions, as allowed or required by local law and/or collective bargaining agreements.
We also utilize independent contractors and temporary personnel to supplement our workforce. Most of our employees are not represented by unions, except for certain employees in the EMEA and APLA geographies who are members of and/or represented by trade unions, as allowed or required by local law and/or collective bargaining agreements.
RETAIL STORES NUMBER NIKE Brand factory stores 560 NIKE Brand in-line stores (including employee-only stores) 49 Converse stores (including factory stores) 54 TOTAL 663 SIGNIFICANT CUSTOMER No customer accounted for 10% or more of our consolidated net Revenues during fiscal 2023. PRODUCT RESEARCH, DESIGN AND DEVELOPMENT We believe our research, design and development efforts are key factors in our success.
RETAIL STORES NUMBER NIKE Brand factory stores 561 NIKE Brand in-line stores (including employee-only stores) 53 Converse stores (including factory stores) 54 TOTAL 668 SIGNIFICANT CUSTOMER No customer accounted for 10% or more of our consolidated net Revenues during fiscal 2024. PRODUCT RESEARCH, DESIGN AND DEVELOPMENT We believe our research, design and development efforts are key factors in our success.
Our community investments are an important part of our culture in that we also support employees in giving back to community organizations through donations and volunteering, which are matched by the NIKE Foundation where eligible. EMPLOYEE BASE As of May 31, 2023, we had approximately 83,700 employees worldwide, including retail and part-time employees.
Our community investments are an important part of our culture, and we support employees in giving back to community organizations through volunteering and donations, which are matched by the NIKE Foundation where eligible. EMPLOYEE BASE As of May 31, 2024, we had approximately 79,400 employees worldwide, including retail and part-time employees.
For fiscal 2023, four footwear contract manufacturers each accounted for greater than 10% of footwear production and in the aggregate accounted for approximately 58% of NIKE Brand footwear production. As of May 31, 2023, our contract manufacturers operated 291 finished goods apparel factories located in 31 countries.
For fiscal 2024, four footwear contract manufacturers each accounted for greater than 10% of footwear production and in the aggregate accounted for approximately 57% of NIKE Brand footwear production. As of May 31, 2024, our contract manufacturers operated 285 finished goods apparel factories located in 33 countries.
In addition, our NIKE Direct and Converse direct to consumer operations sell products through the following number of retail stores in the United States: U.S. RETAIL STORES NUMBER NIKE Brand factory stores 213 NIKE Brand in-line stores (including employee-only stores) 74 Converse stores (including factory stores) 82 TOTAL 369 In the United States, NIKE has eight significant distribution centers.
In addition, our NIKE Direct and Converse direct to consumer operations sell products through the following number of retail stores in the United States: U.S. RETAIL STORES NUMBER NIKE Brand factory stores 211 NIKE Brand in-line stores (including employee-only stores) 85 Converse stores (including factory stores) 81 TOTAL 377 In the United States, NIKE has eight significant distribution centers.
For fiscal 2023, NIKE Brand apparel finished goods were manufactured by 55 contract manufacturers, many of which operate multiple factories. The largest single finished goods apparel factory accounted for approximately 8% of total fiscal 2023 NIKE Brand apparel production.
For fiscal 2024, NIKE Brand apparel finished goods were manufactured by 68 contract manufacturers, many of which operate multiple factories. The largest single finished goods apparel factory accounted for approximately 9% of total fiscal 2024 NIKE Brand apparel production.
Properties for further information on distribution facilities outside of the United States. During fiscal 2023, NIKE's three largest customers outside of the United States accounted for approximately 14% of total non-U.S. sales.
Properties for additional information on distribution facilities outside of the United States. During fiscal 2024, NIKE's three largest customers outside of the United States accounted for approximately 15% of total non-U.S. sales.
CULTURE Each employee shapes NIKE's culture through behaviors and practices. This starts with our Maxims, which represent our core values and, along with our Code of Conduct, feature the fundamental behaviors that help anchor, inform and guide us and apply to all employees.
This starts with our Maxims, which represent our core values and, along with our Code of Conduct, feature the fundamental behaviors that help anchor, inform and guide us and apply to all employees.
For fiscal 2023, factories in Vietnam, China and Cambodia manufactured approximately 29%, 18% and 16% 2023 FORM 10-K 3 Table of Contents of total NIKE Brand apparel, respectively.
For fiscal 2024, factories in Vietnam, China and Cambodia manufactured approximately 28%, 16% and 15% 2024 FORM 10-K 3 Table of Contents of total NIKE Brand apparel, respectively.
We believe that it is important to attract, develop and retain a diverse and engaged workforce at all levels of our business and that such a workforce fosters creativity and accelerates innovation. We are focused on building an increasingly diverse talent pipeline that reflects our consumers, athletes and the communities we serve.
We believe that it is important to attract, develop and retain a diverse and engaged workforce at all levels of our business and that such a workforce fosters creativity and accelerates innovation. We are focused on building a talent pipeline that reflects our consumers, athletes and the communities we serve. CULTURE Each employee shapes NIKE's culture through behaviors and practices.
Since 1972, Sojitz Corporation of America ("Sojitz America"), a large Japanese trading company and the sole owner of our redeemable preferred stock, has performed import-export financing services for us.
Risk Factors, for additional discussion of the impact of sourcing risks on our business. Since 1972, Sojitz Corporation of America ("Sojitz America"), a large Japanese trading company and the sole owner of our redeemable preferred stock, has performed import-export financing services for us.
Ann M. Miller , Executive Vice President, Chief Legal Officer — Ms. Miller, 49, joined NIKE in 2007 and serves as EVP, Chief Legal Officer for NIKE, Inc. In her capacity as Chief Legal Officer, she oversees all legal, compliance, government & public affairs, social community impact, security, resilience and investigation matters of the Company.
Miller, 50, joined NIKE in 2007 and has served as Executive Vice President, Chief Legal Officer of NIKE, Inc. since 2022. In her capacity as Chief Legal Officer, she oversees all legal, compliance, government & public affairs, social community impact, security, resilience and investigation matters of the Company. Previously, Ms.
However, the mix of product sales may vary considerably as a result of changes in seasonal and geographic demand for particular types of footwear, apparel and equipment, as well as other macroeconomic, strategic, operating and logistics-related factors.
Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third fiscal quarters. However, the mix of product sales may vary considerably as a result of changes in seasonal and geographic demand for particular types of footwear, apparel and equipment, as well as other macroeconomic, strategic, operating and logistics-related factors.
Parker , Executive Chairman — Mr. Parker, 67, is Executive Chairman of the Board of Directors and served as President and Chief Executive Officer from 2006 - January 2020. He has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing and brand management. Mr.
Parker, 68, joined NIKE in 1979, is Executive Chairman of the Board of Directors and served as President and Chief Executive Officer of NIKE, Inc. from 2006 to 2020. During his employment with NIKE, he has had primary responsibilities in product research, design and development, marketing and brand management. Mr.
He was also appointed Vice President of Investor Relations in 2019. Mr. Friend was appointed as Executive Vice President and Chief Financial Officer of NIKE, Inc. in April 2020. Prior to joining NIKE, he worked in the financial industry including roles as VP of investment banking and mergers and acquisitions at Goldman Sachs and Morgan Stanley. Monique S.
Friend previously served in various roles at NIKE including as Vice President of Investor Relations and Chief Financial Officer of the NIKE Brand. Prior to joining NIKE, Mr. Friend worked in the financial industry, including as Vice President in the investment banking and mergers and acquisitions groups at Goldman Sachs and Morgan Stanley.
Parker was appointed divisional Vice President in charge of product development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998 and President of the NIKE Brand in 2001. John J. Donahoe II , President and Chief Executive Officer — Mr.
Parker previously served in various roles at NIKE including President of the NIKE Brand, Vice President of Global Footwear, General Manager, corporate Vice President and divisional Vice President in charge of product development. John Donahoe II , President and Chief Executive Officer — Mr.
Our Men's and Women's apparel products currently lead in apparel sales and we expect them to continue to do so. We often market footwear, apparel and accessories in "collections" of similar use or by category. We also market apparel with licensed college and professional team and league logos.
We often market footwear, apparel and accessories in "collections" of similar use or by category. We also market apparel with licensed college and professional team and league logos.
The program provides every employee throughout the globe an opportunity to provide confidential feedback on key areas known to drive employee engagement, including their satisfaction with their managers, their work and the Company generally. The program also measures our employees’ emotional commitment to NIKE as well as NIKE's culture of diversity, equity and inclusion.
These tools provide employees throughout the globe an opportunity to provide confidential feedback on key areas known to drive employee engagement, including their satisfaction with their managers, their work and the Company generally. These tools also measure our employees' connection to NIKE's culture.
All references to fiscal 2023, 2022, 2021 and 2020 are to NIKE, Inc.'s fiscal years ended May 31, 2023, 2022, 2021 and 2020, respectively. Any references to other fiscal years refer to a fiscal year ending on May 31 of that year. PRODUCTS Our NIKE Brand product offerings are aligned around our consumer construct focused on Men's, Women's and Kids'.
All references to fiscal 2025, 2024, 2023, 2022 and 2021 are to NIKE, Inc.'s fiscal years ended May 31, 2025, 2024, 2023, 2022 and 2021, respectively. Any references to other fiscal years refer to a fiscal year ending on May 31 of that year.
In addition to the products we sell to our wholesale customers and directly to consumers through our NIKE Direct operations, we have also entered into license agreements that permit unaffiliated parties to manufacture and sell, using NIKE-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities. 2023 FORM 10-K 1 Table of Contents We also offer interactive consumer services and experiences as well as digital products through our digital platforms, including fitness and activity apps; sport, fitness and wellness content; and digital services and features in retail stores that enhance the consumer experience.
In addition to the products we sell to our wholesale customers and directly to consumers through our NIKE Direct operations, we have also entered into license agreements that permit unaffiliated parties to manufacture and sell, using NIKE-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities.
We remain committed to the targets announced in fiscal 2021 for the Company to work toward by fiscal 2025, including increasing representation of women in our global corporate workforce and leadership positions, as well as increasing representation of U.S. racial and ethnic minorities in our U.S. corporate workforce and at the Director level and above.
We remain committed to the targets announced in fiscal 2021 for the Company to work toward by fiscal 2025, including diverse representation in our corporate workforce and leadership positions.
Heidi O'Neill , President, Consumer, Brand & Product — Ms. O'Neill, 58, joined NIKE in 1998 and leads the integration of global Men's, Women's & Kids' consumer teams, the entire global product engine and global brand marketing and sports marketing to build deep storytelling, relationships and engagement with the brand.
O’Neill leads the integration of the global Men's, Women's & Kids' consumer teams, the entire global product engine and global brand marketing and sports marketing to build deep storytelling, relationships and engagement with the brand. Most recently, Ms. O’Neill has also served as President, Consumer and Marketplace from 2020 to 2023 and President, Direct to Consumer from 2016 to 2020.
As part of our commitment to empowering our employees to help shape our culture, we source employee feedback through our Engagement Survey program, including several corporate pulse surveys.
In empowering our employees to help shape our culture, we source employee feedback through a variety of survey tools: our annual Engagement Survey program, corporate pulse surveys and listening sessions.
Prior to NIKE, he was Senior Vice President, The Coca-Cola Co., and President of The McDonald's Division (TMD) Worldwide. Mr. Williams has also held roles at CIBA Vision and Kraft Foods Inc., and served five years in the U.S. Navy as a Naval Nuclear Power Officer. 2023 FORM 10-K 8 Table of Contents
Williams held executive leadership positions at The Coca-Cola Company as well as roles at CIBA Vision, a subsidiary of Novartis AG, and Kraft Foods Inc. Mr. Williams also served five years in the U.S. Navy as a Naval Nuclear Power Officer. 2024 FORM 10-K 8 Table of Contents
We also are leveraging our global scale to accelerate business diversity, including investing in business training programs for women and increasing the proportion of services supplied by minority-owned businesses. COMPENSATION AND BENEFITS NIKE's total rewards are intended to be competitive and equitable, meet the diverse needs of our global teammates and reinforce our values.
We also are leveraging our global scale to support business diversity among the businesses with which we work. COMPENSATION AND BENEFITS NIKE's total rewards are intended to be competitive and equitable, meet the diverse needs of our global teammates and reinforce our values.
He also held leadership roles at Bain & Company for two decades. Matthew Friend , Executive Vice President and Chief Financial Officer — Mr. Friend, 45, joined NIKE in 2009 and leads the Company's finance, demand & supply management, procurement and global places & services organizations.
Matthew Friend , Executive Vice President and Chief Financial Officer — Mr. Friend, 46, joined NIKE in 2009 and has served as Executive Vice President and Chief Financial Officer of NIKE, Inc. since 2020, and leads the Company's finance, demand and supply management, procurement and global places and services organizations. Mr.
For the past six years, she served as Vice President, Corporate Secretary and Chief Ethics & Compliance Officer. She previously served as Converse's General Counsel, and brings more than 20 years of legal and business expertise to her role. Prior to joining NIKE, Ms. Miller worked at the law firm Sullivan & Cromwell.
Miller served as Vice President, Corporate Secretary from 2017 to 2022. Ms. Miller has also previously held other roles in the NIKE legal department, including Chief Ethics & Compliance Officer and Converse's General Counsel. Prior to joining NIKE, Ms. Miller worked at the law firm Sullivan & Cromwell LLP. Ms.
We also design products specifically for the Jordan Brand and Converse. We believe this approach allows us to create products that better meet individual consumer needs while accelerating our largest growth opportunities. NIKE's athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes.
PRODUCTS Our NIKE Brand product offerings are aligned around our consumer construct focused on Men's, Women's and Kids'. We also design products specifically for the Jordan Brand and Converse. We believe this approach allows us to create products that better meet individual consumer needs while accelerating our largest growth opportunities.
Despite competition for certain materials during fiscal 2023, contract manufacturers were able to source sufficient quantities of raw materials for use in our footwear and apparel products. Refer to Item 1A. Risk Factors, for additional discussion of the impact of sourcing risks on our business.
From time to time, certain materials used in the production of our products experience periods of high demand, shortages and price volatility. In fiscal 2024, contract manufacturers were able to source sufficient quantities of raw materials for use in our footwear and apparel products. Refer to Item 1A.
We believe that we are competitive in all of these areas. TRADEMARKS AND PATENTS We believe that our intellectual property rights are important to our brand, our success and our competitive position. We strategically pursue available protections of these rights and vigorously protect them against third-party theft and infringement.
We strategically pursue available protections of these rights and vigorously protect and enforce them against third-party theft and infringement.
Craig Williams , President, Geographies & Marketplace — Mr. Williams, 54, joined NIKE in 2019 and leads NIKE's four geographies and marketplace across the NIKE Direct and wholesale business. In addition, he leads the Supply Chain and Logistics organization. Mr. Williams joined NIKE as President of Jordan Brand overseeing a team of designers, product developers, marketers and business leaders.
Williams leads the NIKE Supply Chain and Logistics organization. Mr. Williams previously served as President of Jordan Brand from 2019 to June 2023, overseeing the global business and team of designers, footwear and apparel developers, marketers and geography leaders. Prior to joining NIKE, Mr.
Matheson , Executive Vice President, Chief Human Resources Officer — Ms. Matheson, 56, joined NIKE in 1998, with primary responsibilities in the human resources function. She was appointed as Vice President and Senior Business Partner in 2011 and Vice President, Chief Talent and Diversity Officer in 2012. Ms. Matheson was appointed Executive Vice President, Global Human Resources in 2017.
Monique Matheson , Executive Vice President, Chief Human Resources Officer — Ms. Matheson, 57, joined NIKE in 1998 and has served as Executive Vice President, Chief Human Resources Officer of NIKE, Inc. since 2017, overseeing and driving the Company’s strategic global Human Resources strategy. In this role, Ms.
We place considerable emphasis on innovation and high-quality construction in the development and manufacturing of our products. Our Men's, Women's and Jordan Brand footwear products currently lead in footwear sales and we expect them to continue to do so.
NIKE's athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. We place considerable emphasis on innovation and high-quality construction in the development and manufacturing of our products.
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SALES AND MARKETING We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third fiscal quarters.
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We also offer interactive consumer services and experiences as well as digital products through our digital platforms, including fitness and activity apps; sport, fitness and wellness content; and digital services and features in retail stores that enhance the consumer experience. 2024 FORM 10-K 1 Table of Contents SALES AND MARKETING We experience moderate fluctuations in aggregate sales volume during the year.
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In fiscal 2023, we experienced ongoing supply chain volatility during the first part of the year, which improved gradually during the course of the year. We also experienced higher supply chain network costs primarily due to inflationary pressures during the year.
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We believe that we are competitive in all of these areas. See Item 1A. Risk Factors, including the risk factor titled "Our products, services and experiences face intense competition." TRADEMARKS AND PATENTS We believe that our intellectual property rights are important to our brand, our success and our competitive position.
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He joined NIKE as Senior Director of Corporate Strategy and Development, and was appointed Chief Financial Officer of Emerging Markets in 2011. In 2014, Mr. Friend was appointed Chief Financial Officer of Global Categories, Product and Functions, and was subsequently appointed Chief Financial Officer of the NIKE Brand in 2016.
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Donahoe was the President and Chief Executive Officer of ServiceNow, Inc. from 2017 to 2020 and, prior to that, the President and Chief Executive Officer of eBay Inc. Earlier in his career, he worked for Bain & Company for nearly two decades, becoming the firm’s President and Chief Executive Officer in 1999.
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Matheson leads through the lens of people — managing functions including recruitment, succession planning, learning and career development, diversity and inclusion, organizational effectiveness, employee engagement, pay and benefits and people solutions. Previously, Ms.
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Matheson has held roles including Vice President, Chief Talent and Diversity Officer and Vice President, Senior Human Resources Business Partner for North America, Global Product Creation (Footwear, Apparel and Equipment), Global Finance and NIKE, Inc. Affiliates. Prior to joining NIKE, Ms. Matheson practiced employment law. Ann Miller , Executive Vice President, Chief Legal Officer — Ms.
Added
Miller brings more than 25 years of legal and business expertise to her role. Heidi O'Neill , President, Consumer, Product & Brand — Ms. O'Neill, 59, joined NIKE in 1998 and has served as President, Consumer, Product & Brand of NIKE, Inc. since 2023. In this role, Ms.
Added
Craig Williams , President, Geographies & Marketplace — Mr. Williams, 55, joined NIKE in 2019 and has served as President, Geographies & Marketplace of NIKE, Inc. since 2023. In this role, Mr. Williams leads NIKE's four geographic operating units, the global direct to consumer business and wholesale marketplace partnerships. In addition, Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe risks and uncertainties are detailed from time to time in reports filed by NIKE with the SEC, including reports filed on Forms 8-K, 10-Q and 10-K, and include, among others, the following: international, national and local political, civil, economic and market conditions, including high, and increases in, inflation and interest rates; the size and growth of the overall athletic or leisure footwear, apparel and equipment markets; intense competition among designers, marketers, distributors and sellers of athletic or leisure footwear, apparel and equipment for consumers and endorsers; demographic changes; changes in consumer preferences; popularity of particular designs, categories of products and sports; seasonal and geographic demand for NIKE products; difficulties in anticipating or forecasting changes in consumer preferences, consumer demand for NIKE products and the various market factors described above; our ability to execute on our sustainability strategy and achieve our sustainability-related goals and targets, including sustainable product offerings; difficulties in implementing, operating and maintaining NIKE's increasingly complex information technology systems and controls, including, without limitation, the systems related to demand and supply planning and inventory control; interruptions in data and information technology systems; consumer data security; fluctuations and difficulty in forecasting operating results, including, without limitation, the fact that advance orders may not be indicative of future revenues due to changes in shipment timing, the changing mix of orders with shorter lead times, and discounts, order cancellations and returns; the ability of NIKE to sustain, manage or forecast its growth and inventories; the size, timing and mix of purchases of NIKE's products; increases in the cost of materials, labor and energy used to manufacture products; new product development and introduction; the ability to secure and protect trademarks, patents and other intellectual property; product performance and quality; customer service; adverse publicity and an inability to maintain NIKE's reputation and brand image, including without limitation, through social media or in connection with brand damaging events; the loss of significant customers or suppliers; dependence on distributors and licensees; business disruptions; increased costs of freight and transportation to meet delivery deadlines; increases in borrowing costs due to any decline in NIKE's debt ratings; changes in business strategy or development plans; general risks associated with doing business outside of the United States, including, without limitation, exchange rate fluctuations, import duties, tariffs, quotas, sanctions, political and economic instability, conflicts and terrorism; the potential impact of new and existing laws, regulations or policy, including, without limitation, tariffs, import/export, trade, wage and hour or labor and immigration regulations or policies; changes in government regulations; the impact of, including business and legal developments relating to, climate change, extreme weather conditions and natural disasters; litigation, regulatory proceedings, sanctions or any other claims asserted against NIKE; the ability to attract and retain qualified employees, and any negative public perception with respect to key personnel or our corporate culture, values or purpose; the effects of NIKE's decision to invest in or divest of businesses or capabilities; health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic; and other factors referenced or incorporated by reference in this Annual Report and other reports.
Biggest changeThe risks and uncertainties are detailed from time to time in reports filed by NIKE with the SEC, including reports filed on Forms 8-K, 10-Q and 10-K, and include, among others, the following: risks relating to our multi-year enterprise initiative, including the risk that NIKE is not able to identify opportunities to deliver anticipated cost savings, risks related to any delays in the timing for implementing the initiative or potential disruptions to NIKE's business or operations as it executes on the initiative, and other factors that may cause NIKE to be unable to achieve the expected benefits of the initiative; intense competition among designers, marketers, distributors and sellers of athletic or leisure footwear, apparel and equipment for consumers and endorsers; NIKE's ability to successfully innovate and compete in various categories; new product development and innovation; demographic changes; changes in consumer preferences and channel mix; popularity of particular designs, categories of products and sports; seasonal and geographic demand for NIKE products; difficulties in anticipating or forecasting, and responding to changes in consumer preferences, consumer demand for NIKE products, changes in channel mix and the various market factors described above; the size and growth of the overall athletic or leisure footwear, apparel and equipment markets; international, national and local political, civil, economic and market conditions, including high and increasing inflation and interest rates; our ability to execute on our sustainability strategy and achieve our sustainability-related goals and targets, including sustainable product offerings; difficulties in implementing, operating and maintaining NIKE's increasingly complex information technology systems and controls, including, without limitation, the systems related to demand and supply planning and inventory control; interruptions in data and information technology systems; consumer data security; fluctuations and difficulty in forecasting operating results, including, without limitation, the fact that advance orders may not be indicative of future revenues due to changes in shipment timing, the changing mix of orders with shorter lead times, and discounts, order cancellations and returns; the ability of NIKE to sustain, manage or forecast its growth and inventories; the size, timing and mix of purchases of NIKE's products; increases in the cost of materials, labor and energy used to manufacture products; the ability to secure and protect trademarks, patents and other intellectual property; product performance and quality; customer service; adverse publicity and an inability to maintain NIKE's reputation and brand image, including without limitation, through social media or in connection with brand damaging events; the loss of significant customers or suppliers; dependence on distributors and licensees; business disruptions; increased costs of freight and transportation to meet delivery deadlines; increases in borrowing costs due to any decline in NIKE's debt ratings; changes in business strategy or development plans; general risks associated with doing business outside of the United States, including, without limitation, exchange rate fluctuations, inflation, import duties, tariffs, quotas, sanctions, political and economic instability, conflicts and terrorism; the potential impact of new and existing laws, regulations or policy, including, without limitation, tariffs, import/export, trade, wage and hour or labor and immigration regulations or policies; changes in government regulations; the impact of, including business and legal developments relating to, climate change, extreme weather conditions and natural disasters; litigation, regulatory proceedings, sanctions or any other claims asserted against NIKE; the ability to attract and retain qualified employees, and any negative public perception with respect to key personnel or our corporate culture, values or purpose; the effects of NIKE's decision to invest in or divest of businesses or capabilities; health epidemics, pandemics and similar outbreaks; and other factors referenced or incorporated by reference in this Annual Report and other reports.
Maintaining, promoting and growing our brands will depend on our design and marketing efforts, including advertising and consumer campaigns, product innovation and product quality. Our commitment to product innovation, quality and sustainability, and our continuing investment in design (including materials), marketing and sustainability measures may not have the desired impact on our brand image and reputation.
Maintaining, promoting and growing our brands will depend on our design and marketing efforts, including product innovation, product quality and advertising and consumer campaigns. Our commitment to product innovation, quality and sustainability, and our continuing investment in design (including materials), marketing and sustainability measures may not have the desired impact on our brand image and reputation.
Any negative sentiment toward the United States as a result of any such changes could also adversely affect our business. In addition, disease outbreaks, terrorist acts and military conflict have increased the risks of doing business abroad.
Any negative sentiment toward the United States as a result of any such changes could also adversely affect our business. In addition, terrorist acts, military conflict and disease outbreaks have increased the risks of doing business abroad.
For example, the Organization for Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the "Inclusive Framework") has put forth two proposals—Pillar One and Pillar Two—that revise the existing profit allocation and nexus rules and ensure a minimal level of taxation, respectively.
For example, the Organization for Economic Co-operation and Development (the "OECD") and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the "Inclusive Framework") has put forth two proposals—Pillar One and Pillar Two—that revise the existing profit allocation and nexus rules and ensure a minimal level of taxation, respectively.
From time to time, we may invest in technology, business infrastructure, new businesses or capabilities, product offering and manufacturing innovation and expansion of existing businesses, such as our NIKE Direct operations, which require substantial cash investments and management attention.
From time to time, we may invest in product offering and manufacturing innovation and expansion of existing businesses, such as our NIKE Direct operations, technology, business infrastructure, new businesses or capabilities, which require substantial cash investments and management attention.
Risks presented by pandemics and other public health emergencies include, but are not limited to: • Deterioration in economic conditions in the United States and globally, including the effect of prolonged periods of inflation on our consumers and vendors; • Disruption to our distribution centers, contract manufacturers, finished goods factories and other vendors, through the effects of facility closures, increased operating costs, reductions in operating hours, labor shortages, and real time changes in operating procedures, such as additional cleaning and disinfection procedures, which have had, and could in the future again have, a significant impact on our planned inventory production and distribution, including higher inventory levels or inventory shortages in various markets; 2023 FORM 10-K 12 Table of Contents • Impacts to our distribution and logistics providers' ability to operate, including labor and container shortages, and increases in their operating costs.
Risks presented by pandemics and other public health emergencies include, but are not limited to: • Deterioration in economic conditions in the United States and globally, including the effect of prolonged periods of inflation on our consumers and vendors; 2024 FORM 10-K 12 Table of Contents • Disruption to our distribution centers, contract manufacturers, finished goods factories and other vendors, through the effects of facility closures, increased operating costs, reductions in operating hours, labor shortages, and real time changes in operating procedures, such as additional cleaning and disinfection procedures, which have had, and could in the future again have, a significant impact on our planned inventory production and distribution, including higher inventory levels or inventory shortages in various markets; • Impacts to our distribution and logistics providers' ability to operate, including labor and container shortages, and increases in their operating costs.
In addition, even if we are able to expand existing or find new manufacturing capacity or sources of materials, we may encounter delays in production and added costs as a result of the time it takes to train suppliers and manufacturers in our methods, products, quality control standards and labor, health and safety standards.
Even if we are able to expand existing or find new manufacturing capacity or sources of materials, we may encounter delays in production and added costs as a result of the time it takes to train suppliers and manufacturers in our methods, products, quality control standards and labor, health and safety standards.
Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of performance products or away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond to these changes.
Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of products or away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond to these changes.
However, lead times for many of our products may make it more difficult for us to respond rapidly to new or changing product trends or consumer preferences. All of our products are subject to changing consumer preferences that cannot be predicted with certainty.
However, lead times for many of our products make it more difficult for us to respond rapidly to new or changing product trends or consumer preferences. All of our products are subject to changing consumer preferences that cannot be predicted with certainty.
In addition, federal, state or local governmental authorities in various countries have proposed, and are likely to continue to propose, legislative and regulatory initiatives to reduce or mitigate the impacts of climate change on the environment.
In addition, federal, state or local governmental authorities in various countries are implementing, have proposed and are likely to continue to propose, legislative and regulatory initiatives to reduce or mitigate the impacts of climate change on the environment.
If we do not adequately and timely anticipate and respond to our competitors, our costs may increase, demand for our products may decline, possibly significantly, or we may need to reduce wholesale or suggested retail prices for our products. 2023 FORM 10-K 10 Table of Contents Economic factors beyond our control, and changes in the global economic environment, including fluctuations in inflation and currency exchange rates, could result in lower revenues, higher costs and decreased margins and earnings.
If we do not adequately and timely anticipate and respond to our competitors, our costs may increase, demand for our products may decline, possibly significantly, or we may need to reduce wholesale or suggested retail prices for our products. 2024 FORM 10-K 10 Table of Contents Economic factors beyond our control, and changes in the global economic environment, including fluctuations in inflation and currency exchange rates, could result in lower revenues, higher costs and decreased margins and earnings.
Product offerings, technologies, marketing expenditures (including expenditures for advertising and endorsements), pricing, costs of production, customer service, digital commerce platforms, digital services and experiences and social media presence are areas of intense competition.
Product offerings, product innovations and technologies, marketing expenditures (including expenditures for advertising and endorsements), pricing, costs of production, customer service, digital commerce platforms, digital services and experiences and social media presence are areas of intense competition.
If we are unable to maintain our current associations with professional athletes, sports teams and leagues, or other public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments.
If we are unable to negotiate new, or maintain our current, associations with professional athletes, sports teams and leagues, or other public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments.
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. 2023 FORM 10-K 9 Table of Contents Economic and Industry Risks Global economic conditions could have a material adverse effect on our business, operating results and financial condition.
Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. 2024 FORM 10-K 9 Table of Contents Economic and Industry Risks Global economic conditions could have a material adverse effect on our business, operating results and financial condition.
Further, our reputation and brand image could be damaged as a result of our support of, association with or lack of support or disapproval of certain social causes, as well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
Further, our reputation and brand image could be damaged as a result of our support of, association with or lack of support or disapproval of certain social causes and public personalities, as well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
In addition, our success in maintaining, extending and expanding our brand image depends on our ability to adapt to a rapidly changing media and digital environment, including our reliance on social media and other digital advertising networks, and digital dissemination of advertising campaigns on our digital platforms and through our digital experiences and products.
In addition, our success in maintaining, extending and expanding our brand image depends on our ability to adapt to a rapidly changing media and digital environment, including our reliance on social media, digital advertising networks, digital and advertising technology, and digital dissemination of advertising campaigns on our digital platforms and through our digital experiences and products.
The failure of these systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes, failure to properly maintain, protect, repair or upgrade systems, or problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, could require significant capital investments to remediate the problem which may not be sufficient to cover all eventualities, and may have an adverse effect on our reputation, results of operations and financial condition.
The failure of these systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, ransomware, denial of service attacks, natural disasters, vendor business interruptions or other causes, failure to properly maintain, protect, repair or upgrade systems, or problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, could require significant time and capital investments to remediate the problem which may not be sufficient to cover all eventualities, and may have an adverse effect on our reputation, results of operations and financial condition.
In addition, supply chain issues caused by factors including the COVID-19 pandemic and geopolitical conflicts have impacted and may continue to impact the availability, pricing and timing for obtaining commodities and raw materials. • If retailers of our products experience declining revenues or experience difficulty obtaining financing in the capital and credit markets to purchase our products, this could result in reduced orders for our products, order cancellations, late retailer payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt expense. • In the past, certain retailers of our products have experienced severe financial difficulty, become insolvent and ceased business operations, and this could occur in the future, which could negatively impact the sale of our products to consumers. • If contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing in the capital and credit markets to purchase raw materials or to finance capital equipment and other general working capital needs, it may result in delays or non-delivery of shipments of our products.
In addition, supply chain issues caused by factors including geopolitical conflicts and pandemics have impacted and may in the future impact the availability, pricing and timing for obtaining commodities and raw materials. • If retailers of our products experience declining revenues or experience difficulty obtaining financing to purchase our products, this could result in reduced orders for our products, order cancellations, late retailer payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt expense. • In the past, certain retailers of our products have experienced severe financial difficulty, become insolvent and ceased business operations, and this could occur in the future, which could negatively impact the sale of our products to consumers. • If contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing to purchase raw materials or to finance capital equipment and other general working capital needs, it may result in delays or non-delivery of shipments of our products.
In addition, our customers may cancel orders, change delivery schedules or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period.
In addition, our customers may, and from time to time do, cancel orders, change delivery schedules or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period.
These risks and uncertainties include, but are not 2023 FORM 10-K 11 Table of Contents limited to, our ability to execute our strategies and achieve our goals within the currently projected costs and the expected timeframes; the availability and cost of raw materials and renewable energy; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future technology developments, including the ability to scale projects and technologies on a commercially competitive basis such as carbon sequestration and/or other related processes; compliance with, and changes or additions to, global and regional regulations, taxes, charges, mandates or requirements relating to greenhouse gas emissions, carbon costs or climate-related goals; adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; and the actions of competitors and competitive pressures.
These risks and uncertainties include, but are not limited to, our ability to execute our strategies and achieve our goals within the currently projected costs and the expected timeframes; the availability and cost of raw materials and renewable energy; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future technology developments, including the ability to scale projects and technologies on a commercially competitive basis such as carbon sequestration and/or other related processes; compliance with, and changes or additions to, global and regional regulations, taxes, charges, mandates or requirements relating to greenhouse gas emissions, carbon costs or climate-related goals; adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; and the actions of competitors and competitive pressures.
The uncertain state of the global economy, including high and rising levels of inflation and interest rates and the risk of a recession, continues to impact businesses around the world.
The uncertain state of the global economy, including sustained high levels of inflation and interest rates and the risk of a recession, continues to impact businesses around the world.
For example, our world headquarters is located in an active seismic zone, which is at a higher risk for earthquakes and the related consequences or effects.
For example, our World Headquarters is located in a seismic zone, which is at a higher risk for earthquakes and the related consequences or effects.
As a result, there is no assurance that we will be able to successfully execute our strategies and achieve our sustainability-related goals, which could damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of operations and financial condition.
As a result, there is no assurance that we will be able to adequately meet stakeholder expectations, successfully execute our strategies or achieve our sustainability-related goals, which could damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of operations and financial condition.
Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, inventory reserves, hedge accounting for derivatives, income taxes and other contingencies.
Significant assumptions and estimates used in preparing our consolidated financial statements include those related to sales-related reserves, inventory reserves, hedge accounting for derivatives, income taxes and other contingencies.
While we strive to produce products that help to enhance athletic performance and reduce injury and maximize comfort, if we fail to introduce technical innovation in our products, consumer demand for our products could decline, and if we experience problems with the quality of our products, we may incur substantial expense to remedy the problems and loss of consumer confidence.
While we strive to produce products that help to enhance athletic performance and reduce injury and maximize comfort, if we fail to introduce technical innovation in our products, consumer demand for our products could decline, and if we experience problems with the quality of our products (including the introduction of bias or inaccuracies in our products), we may incur substantial expense to remedy the problems and loss of consumer confidence.
If the technology-based systems that give our consumers the ability to shop or interact with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally or to retain our customer base, could be materially adversely affected. Many of our consumers shop with us through our digital platforms.
If the technology-based systems, applications and platforms that give our consumers the ability to shop or interact with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally or to retain our customer base, could be materially adversely affected.
As of June 30, 2023, Swoosh, LLC beneficially owned approximately 77% of our Class A Common Stock. If, on June 30, 2023, all of these shares were converted into Class B Common Stock, Swoosh, LLC's commensurate ownership percentage of our Class B Common Stock would be approximately 16%.
As of June 28, 2024, Swoosh, LLC beneficially owned approximately 77% of our Class A Common Stock. If, on June 28, 2024, all of these shares were converted into Class B Common Stock, Swoosh, LLC's commensurate ownership percentage of our Class B Common Stock would be approximately 16%.
If one or more of our significant suppliers were to sever their relationship with us or significantly alter the terms of our relationship, including due to changes in applicable trade policies, or be unable to perform, we may not be able to obtain replacement products in a timely manner, which could have a material adverse effect on our business operations, sales, financial condition or results of operations.
If one or more of our significant suppliers 2024 FORM 10-K 17 Table of Contents were to sever their relationship with us or significantly alter the terms of our relationship, including due to changes in applicable trade policies, or be unable to perform, we may not be able to obtain replacement products in a timely manner, which could have a material adverse effect on our business operations, sales, financial condition or results of operations.
In addition, actions taken or statements made by athletes, teams or leagues, or other endorsers, associated with our products or brand that harm the reputations of those athletes, teams or leagues, or endorsers, or our decisions to cease collaborating with certain endorsers in light of actions taken or statements made by them, have in the past harmed and could in the future seriously harm our brand image with consumers and, as a result, could have an adverse effect on 2023 FORM 10-K 14 Table of Contents our sales and financial condition.
In addition, actions taken or statements made by athletes, teams or leagues, or other endorsers, associated with our products or brand that harm the reputations of those athletes, teams or leagues, or endorsers, or our decisions to cease collaborating with certain endorsers in light of actions taken or statements made by them, have in the past harmed and could in the future seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
Any country in which our products are produced or sold may eliminate, adjust or impose new quotas, duties, tariffs, safeguard measures, anti-dumping duties, cargo restrictions to prevent terrorism, restrictions on the transfer of currency, climate change legislation, product safety regulations or other charges or restrictions, any of which could have an adverse effect on our results of operations and financial condition.
Any country in which our products are produced or sold may 2024 FORM 10-K 20 Table of Contents eliminate, adjust or impose new quotas, duties, tariffs, safeguard measures, anti-dumping duties, cargo restrictions to prevent terrorism, restrictions on the transfer of currency, climate change legislation, product safety regulations or other charges or restrictions, any of which could have an adverse effect on our results of operations and financial condition.
We believe the diversity of locations in which we operate, our operational size, disaster recovery and business continuity planning and our information technology systems and networks, including the Internet and third-party services ("Information Technology Systems"), position us well, but may not be sufficient for all or for concurrent eventualities.
The diversity of locations in which we operate, our operational size, disaster recovery and business continuity planning and our information technology systems and networks, including the Internet and third-party services ("Information Technology Systems"), may not be sufficient for all or for concurrent eventualities.
In addition, if there were a significant increase in the number of members of our workforce who are members of labor organizations or become parties to collective bargaining agreements, we could be vulnerable to a strike, work stoppage or other labor action, which could have an adverse effect on our business.
In addition, if there were a significant increase in the number of members of our workforce who are members of labor organizations or become parties to collective bargaining agreements, we could be vulnerable to a strike, work stoppage or other labor action, as well as additional expenses, expectations or requirements, which could have an adverse effect on our business.
Changes in U.S. trade policies, including modifications to import tariffs and existing trade policies and agreements, have also had, and could continue to have a significant impact on our activities in foreign jurisdictions, and could adversely affect our reputation or results of operations. Our success depends on our global distribution facilities.
Changes in U.S. trade policies, including modifications to import tariffs and existing trade policies and agreements, have also had, and could continue to have a significant impact on our activities in foreign jurisdictions, and could adversely affect our reputation or results of operations.
In addition, new products we offer, such as virtual goods, may raise various novel intellectual property law considerations, including adequacy and scope of assignment, licensing, transfer, copyright and other right-of-use issues. 2023 FORM 10-K 20 Table of Contents In addition, the laws of certain countries may not protect or allow enforcement of intellectual property rights to the same extent as the laws of the United States.
In addition, new products we offer, such as virtual goods, may raise various novel intellectual property law considerations, including adequacy and scope of assignment, licensing, transfer, copyright and other right-of-use issues. In addition, the laws of certain countries may not protect or allow enforcement of intellectual property rights to the same extent as the laws of the United States.
If Information Technology Systems suffer severe damage, disruption or shutdown and our business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage.
If Information Technology Systems suffer severe damage, disruption or shutdown and our 2024 FORM 10-K 16 Table of Contents business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage.
Further, our contract manufacturers have experienced and may continue to experience in the future, unexpected closures, unexpected increases in work wages or other 2023 FORM 10-K 18 Table of Contents changes in labor standards, whether government mandated or otherwise, and increases in compliance costs due to governmental regulation concerning certain metals, fabrics or raw materials used in the manufacturing of our products.
Further, our contract manufacturers have experienced and may continue to experience in the future, unexpected closures, unexpected increases in work wages or other changes in labor standards, whether government mandated or otherwise, and increases in compliance costs due to governmental regulation concerning certain metals, fabrics or raw materials used in the manufacturing of our products.
In addition, the competitive nature of retail, including shifts in the ways in which consumers shop, and the continued proliferation of digital commerce, constitutes a risk factor implicating our NIKE Direct and wholesale operations.
In addition, the competitive nature of retail, including shifts in the ways in which consumers shop, constitutes a risk factor implicating our NIKE Direct and wholesale operations.
A growing portion of consumers access our NIKE Direct digital platforms, but in the event that it is more difficult for consumers to access and use our digital platforms, consumers find that our digital platforms do not effectively meet their needs or expectations or consumers choose not to access or use our digital platforms or use devices that do not offer access to our platforms, the success of our NIKE Direct operations could be adversely impacted.
A growing portion of consumers access our NIKE Direct digital platforms, but in the event that it is more difficult for consumers to access and use our digital platforms, consumers find that our digital platforms do not effectively meet their needs or expectations or consumers choose not to access or use our digital platforms or use devices that do not offer access to our platforms, the success of our 2024 FORM 10-K 15 Table of Contents NIKE Direct operations could be adversely impacted.
Accordingly, we are subject to the risks generally associated with global trade and doing business abroad, which include foreign laws and regulations, varying consumer preferences across geographic regions, political tensions, unrest, disruptions or delays in cross-border shipments and changes in economic conditions in countries in which our products are manufactured or where we sell products.
Accordingly, we are subject to the risks generally associated with global trade and doing business abroad, which include foreign laws and regulations, varying consumer preferences across geographic regions, political tensions, unrest, disruptions or delays in cross-border shipments and changes in economic conditions in countries in which our 2024 FORM 10-K 18 Table of Contents products are manufactured or where we sell products.
The misuse of a brand by or negative publicity involving a licensee could have a material adverse effect on that brand and on us. 2023 FORM 10-K 16 Table of Contents Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk and impair our ability to sell products.
The misuse of a brand by or negative publicity involving a licensee could have a material adverse effect on that brand and on us. Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk and impair our ability to sell products.
Although we believe we have clearly reflected the economics of these transactions 2023 FORM 10-K 21 Table of Contents and the proper local transfer pricing documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may impact our mix of earnings in countries with differing statutory tax rates.
Although we believe we have clearly reflected the economics of these transactions and the proper local transfer pricing documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may impact our mix of earnings in countries with differing statutory tax rates.
We may fail to meet market expectations, which could cause the price of our stock to decline. Our Class B Common Stock is traded publicly, and at any given time various securities analysts follow our financial results and issue reports on us.
We have in the past failed and may in the future fail to meet market expectations, which has caused and could in the future cause the price of our stock to decline. Our Class B Common Stock is traded publicly, and at any given time various securities analysts follow our financial results and issue reports on us.
If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience 2023 FORM 10-K 22 Table of Contents difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.
If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.
Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors, and to do comparison shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms.
Many of our consumers shop with us through our digital platforms. Consumers frequently use mobile-based devices and applications to shop online with us and with our competitors, and to do comparison shopping, as well as to engage with us and our competitors through digital services and experiences that are offered on mobile platforms.
We rely on technical innovation and high-quality products to compete in the market for our products. Technical innovation and quality control in the design and manufacturing processes of footwear, apparel, equipment and other products and services are essential to the commercial success of our products and development of new products. Research and development play a key role in technical innovation.
Technical innovation and quality control in the design and manufacturing processes of footwear, apparel, equipment and other products and services are essential to the commercial success of our products and development of new products. Research and development play a key role in technical innovation.
As a result, we are required to exercise our judgment as to whether or how certain laws or regulations apply, or may in the future 2023 FORM 10-K 19 Table of Contents apply, and it is possible that legislators, regulators and courts may disagree with our conclusions.
As a result, we are required to exercise our judgment as to whether or how certain laws or regulations apply, or may in the future apply, and it is possible that legislators, regulators and courts may disagree with our conclusions.
Many factors unique to retail operations, some of which are beyond our control, pose risks and uncertainties. Risks include, but are not limited to: credit card fraud; mismanagement of existing retail channel partners; inability to manage costs associated with store construction and operation; and theft.
Many factors unique to retail operations, some of which are beyond our control, pose risks and uncertainties. Risks include, but are not limited to: credit card fraud and theft in both our retail stores and on digital platforms; mismanagement of existing retail channel partners; inability to manage costs associated with store construction and operation; and supply chain and inventory management.
A majority of our products are manufactured and sold outside of the United States, and we conduct purchase and sale transactions in various currencies, which creates exposure to the volatility of global economic conditions, including fluctuations in inflation and foreign currency exchange rates.
A majority of our products are manufactured and sold outside of the United States, and we conduct purchase and sale transactions in various currencies, which creates exposure to the volatility of global economic conditions, including fluctuations in inflation and foreign currency exchange rates. Central banks deploy various strategies to combat inflation, including increasing interest rates, which impact our borrowing costs.
In 2023 FORM 10-K 15 Table of Contents addition, as use of our digital platforms continues to grow, we will need an increasing amount of technical infrastructure to continue to satisfy our consumers' needs.
In addition, as use of our digital platforms continues to grow, we will need an increasing amount of technical infrastructure to continue to satisfy our consumers' needs.
The risk of counterparty default or failure may be heightened during economic downturns and periods of uncertainty in the financial markets.
The risk of counterparty default or failure may be heightened during periods of sustained high interest rates and uncertainty in the financial markets as well as economic downturns.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Class B Common Stock.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Class B Common Stock. 2024 FORM 10-K 23 Table of Contents Anti-takeover provisions may impair an acquisition of the Company or reduce the price of our common stock.
Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business. We establish relationships with professional athletes, sports teams and leagues, as well as other public figures, including artists, designers and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers.
We establish relationships with professional athletes, sports teams and leagues, as well as other public figures, including artists, designers and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers.
We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third fiscal quarters.
Our business is affected by seasonality, which could result in fluctuations in our operating results. We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third fiscal quarters.
Negative publicity regarding production methods, alleged unethical or illegal practices or workplace or related conditions of any of our suppliers, manufacturers or licensees could adversely affect our brand image and sales, force us to locate alternative suppliers, manufacturers or licenses or result in the imposition of additional regulations, including new or additional quotas, tariffs, sanctions, product safety regulations or other regulatory measures, by governmental authorities.
Negative publicity regarding production methods, alleged unethical or illegal practices or workplace or related conditions of any of our suppliers, manufacturers or licensees could adversely affect our brand image and sales, force us to locate alternative suppliers, manufacturers or licenses or result in the imposition of additional regulations, including new or additional quotas, tariffs, sanctions, product safety regulations or other regulatory measures, by governmental authorities. 2024 FORM 10-K 22 Table of Contents Risks Related to Our Securities, Investments and Liquidity Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns.
These, in addition to ongoing rapid changes in technology, a reduction in barriers to the creation of new footwear and apparel companies and consumer preferences in the markets for athletic and leisure footwear, apparel, and equipment, services and experiences, constitute significant risk factors in our operations.
These, in addition to ongoing rapid changes in technology (including marketing and advertising technology), a reduction in barriers to starting new footwear and apparel companies and an increase in the number of such companies (some of which may be able to react more nimbly to changes in consumer preferences) and changes in consumer preferences in the markets for athletic and leisure footwear, apparel, and equipment, services and experiences, constitute significant risk factors in our operations.
Risks specific to our digital commerce business also include diversion of sales from our and our retailers' brick and mortar stores, difficulty in recreating the in-store experience through direct channels and liability for online content. Our failure to successfully respond to these risks might adversely affect sales in our digital commerce business, as well as damage our reputation and brands.
Risks specific to our digital commerce business also include diversion of sales from our and our retailers' brick and mortar stores, pricing pressure on our products, difficulty in recreating the in-store experience through direct channels and liability for online content.
In addition, we and our contract manufacturers compete with other companies and industries for raw materials used in our products. Our NIKE Direct operations, both through our digital commerce operations and retail stores, also compete with multi-brand retailers, which sell our products through their digital platforms and physical stores, and with digital commerce platforms.
Our NIKE Direct operations, both through our digital commerce operations and retail stores, also compete with multi-brand retailers, which sell our products through their digital platforms and physical stores, and with digital commerce platforms.
Any interruption in Information Technology Systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation, and loss of users. We are subject to the risk our licensees may not generate expected sales or maintain the value of our brands.
Any interruption in Information Technology Systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation, and loss of users.
Although we cannot predict whether or in what form these proposals will be enacted into law, these changes, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense and cash flows. Portions of our operations are subject to a reduced tax rate or are under a tax holiday.
Although we cannot predict whether or in what form these proposals, or any other changes in the U.S. or foreign tax laws or regulations, will be enacted into law, these changes, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense and cash flows.
If our stock price is volatile for any reason, we may become involved in this type of litigation in the future. Any litigation could result in reputational damage, substantial costs and a diversion of management's attention and resources needed to successfully run our business. 2023 FORM 10-K 23 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any litigation could result in reputational damage, substantial costs and a diversion of management's attention and resources needed to successfully run our business. 2024 FORM 10-K 24 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
We rely significantly on information technology to operate our business, including our supply chain and retail operations, and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business.
Our failure to successfully respond to these risks might adversely affect sales in our digital commerce business, as well as damage our reputation and brands. We rely significantly on information technology to operate our business, including our supply chain and retail operations, and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business.
We currently license, and expect to continue licensing, certain of our proprietary rights, such as trademarks or copyrighted material, to third parties.
We are subject to the risk our licensees may not generate expected sales or maintain the value of our brands. We currently license, and expect to continue licensing, certain of our proprietary rights, such as trademarks or copyrighted material, to third parties.
Our operating margins are also sensitive to a number of additional factors that are beyond our control, including manufacturing and transportation costs, shifts in product sales mix and geographic sales trends, all of which we expect to continue. Results of operations in any period should not be considered indicative of the results to be expected for any future period.
Our operating margins are also sensitive to a number of additional factors that are beyond our control, including manufacturing and transportation costs, shifts in product sales 2024 FORM 10-K 14 Table of Contents mix and geographic sales trends, all of which we expect to continue.
The impact of any changes in conditions would be the loss of certainty in treatment thus potentially impacting our effective income tax rate. For example, in January 2019, the European Commission opened a formal investigation to examine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company.
For example, in January 2019, the European Commission opened a formal investigation to examine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company.
Any adverse effect on the quality of these decisions could impact our ability to retain real estate locations adequate to meet our targets or efficiently manage the profitability of our existing fleet of stores, which could have an adverse effect on our operating results and financial condition. 2023 FORM 10-K 17 Table of Contents The success of our business depends, in part, on high-quality employees, including key personnel as well as our ability to maintain our workplace culture and values.
Any adverse effect on the quality of these decisions could impact our ability to retain real estate locations adequate to meet our targets or efficiently manage the profitability of our existing fleet of stores, which could have an adverse effect on our operating results and financial condition.
Our success depends in part on the continued service of high-quality employees, including key executive officers and personnel. The loss of the services of key individuals, or any negative perception with respect to these individuals, or our workplace culture or values, could harm our business.
The success of our business depends, in part, on high-quality employees, including key personnel as well as our ability to maintain our workplace culture and values. Our success depends in part on the continued service of high-quality employees, including key executive officers and personnel.
Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change. Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on global earnings and could increase the U.S. corporate tax rate.
Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on global earnings and could increase the U.S. corporate tax rate.
For example, while we require our suppliers of our products to operate their business in compliance with applicable laws and regulations, we do not control their practices. Negative publicity relating to a violation or an alleged violation of policies or laws by such suppliers could damage our brand image and diminish consumer trust in our brand.
For example, while we require our suppliers of our products to operate their business in compliance with applicable laws and regulations, we do not control their practices.
If our operating results are below the estimates or expectations of public market analysts and investors, our stock price could decline. In the past, securities class action litigation has been brought against NIKE and other companies following a decline in the market price of their securities.
If our operating results are below the estimates or expectations of public market analysts and investors, our stock price could decline (which has recently happened in the past and could happen in the future).
We also utilize tax rulings and other agreements to obtain certainty in treatment of certain tax matters. Tax holidays and rulings can expire from time to time and may be extended when certain conditions are met, or terminated if certain conditions are not met.
Tax holidays and rulings can expire from time to time and may be extended when certain conditions are met, or terminated if certain conditions are not met. The impact of any changes in conditions would be the loss of certainty in treatment thus potentially impacting our effective income tax rate.
We could be subject to changes in tax rates, adoption of new tax laws, additional tax liabilities or increased volatility in our effective tax rate. We earn a substantial portion of our income in foreign countries and, as such, we are subject to the tax laws in the United States and numerous foreign jurisdictions.
We could be subject to changes in tax rates, adoption of new tax laws or regulations, or changes in the interpretations thereof, additional tax liabilities or increased volatility in our effective tax rate.
On December 12, 2022, the European Union member states agreed to implement the Inclusive Framework's global corporate minimum tax rate of 15%. Other countries are also actively considering changes to their tax laws to adopt certain parts of the Inclusive Framework's proposals.
Several countries in which we operate, including several European Union member states' have adopted domestic legislation to implement the Inclusive Framework's global corporate minimum tax rate of 15% which will be effective beginning fiscal 2025. Other countries are also actively considering changes to their tax laws to adopt certain parts of the Inclusive Framework's proposals.
If we are unable to anticipate consumer preferences and develop new products, we may not be able to maintain or increase our revenues and profits. Our success depends on our ability to identify, originate and define product trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner.
Our success depends on our ability to identify, originate and define product trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner so that our product offerings evolve and are responsive to consumer demands.
In addition, we market our products globally through a diverse spectrum of advertising and promotional programs and campaigns, including social media and other digital advertising networks. If we do not successfully market our products or if advertising and promotional costs increase, these factors could have an adverse effect on our business, financial condition and results of operations.
In addition, we market our products globally through a diverse spectrum of advertising and promotional programs and campaigns, including social media and other digital advertising networks.
Our success also depends on our ability to recruit, retain and engage our personnel sufficiently, both to maintain our current business and to execute our strategic initiatives. Competition for employees in our industry is intense and we may not be successful in attracting and retaining such personnel.
Competition for employees in our industry is intense and we may not be successful in attracting and retaining such personnel.
These laws impose additional obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored. Compliance with existing, proposed and recently enacted laws and regulations can be costly and time consuming, and any failure to comply with these regulatory standards could subject us to legal, operational and reputational risks.
Compliance with existing, proposed and recently enacted laws and regulations is costly and time consuming, and any failure to comply with these regulatory 2024 FORM 10-K 21 Table of Contents standards could subject us to legal, operational and reputational risks.
We compete internationally with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies, private labels and large companies that have diversified lines of athletic and leisure footwear, apparel and equipment. We also compete with other companies for the production capacity of contract manufacturers that produce our products.
We compete with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies, private label brands offered by major retailers and various other large companies that have diversified lines of athletic and leisure footwear, apparel and equipment. New competitors frequently enter the markets we serve.
If 2023 FORM 10-K 13 Table of Contents the reputation, culture or image of any of our brands is tarnished or if we receive negative publicity, then our sales, financial condition and results of operations could be materially and adversely affected. Our business is affected by seasonality, which could result in fluctuations in our operating results.
If the reputation, culture or image of any of our brands is tarnished or if we receive negative publicity, then our sales, financial condition and results of operations could be materially and adversely affected. If we are unable to anticipate consumer preferences and develop new products, we may not be able to maintain or increase our revenues and profits.
Central banks may deploy various strategies to combat inflation, including increasing interest rates, which may impact our borrowing costs. Additionally, there has been, and may continue to be, volatility in currency exchange rates that impact the U.S. Dollar value relative to other international currencies.
Government shutdowns or the risk of government shutdowns, as well as the impact or expected impact of elections, both in the United States and in other countries around the world, may also increase volatility. Additionally, there has been, and may continue to be, volatility in currency exchange rates that impact the U.S. Dollar value relative to other international currencies.
As of May 31, 2023, our contract manufacturers operated 123 finished goods footwear factories located in 11 countries. We rely upon contract manufacturers, which we do not own or operate, to manufacture all of the footwear products we sell.
We rely upon a concentrated amount of contract manufacturers, which we do not own or operate, to manufacture all of the footwear products we sell, see "Manufacturing" for additional information. Our ability to meet our customers' needs depends on our ability to maintain a steady supply of products from our contract manufacturers.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES The following is a summary of principal properties owned or leased by NIKE: The NIKE World Campus, owned by NIKE and located near Beaverton, Oregon, USA, is an approximately 400-acre site consisting of over 40 buildings which, together with adjacent leased properties, functions as our world headquarters and is occupied by approximately 11,400 employees engaged in management, research, design, development, marketing, finance and other administrative functions serving nearly all of our segments.
Biggest changePROPERTIES The following is a summary of principal properties owned or leased by NIKE: The NIKE World Headquarters, owned by NIKE and located near Beaverton, Oregon, USA, is an approximately 400-acre site consisting of over 40 buildings which, together with adjacent leased properties, functions as our global headquarters and is occupied by approximately 10,700 employees engaged in management, research, design, development, marketing, finance and other administrative functions serving nearly all of our segments.
We lease approximately 1,027 retail stores worldwide, which primarily consist of factory stores. See "United States Market" and "International Markets" for additional information regarding our retail stores. Our leases expire at various dates through the fiscal year 2052.
We lease approximately 1,040 retail stores worldwide, which primarily consist of factory stores. See "United States Market" and "International Markets" for additional information regarding our retail stores. Our leases expire at various dates through the fiscal year 2058.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 2023 FORM 10-K 24 Table of Contents PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 2024 FORM 10-K 26 Table of Contents PART II
ITEM 3. LEGAL PROCEEDINGS We do not believe there are any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for further information.
ITEM 3. LEGAL PROCEEDINGS We do not believe there are any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or of which any of our property is the subject. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures 24 PART II 25 ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 ITEM 6. Reserved 27 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 49 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 26 PART II 27 ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 ITEM 6. Reserved 29 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 30 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 51 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe new share repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company's discretion. All share repurchases were made under NIKE's publicly announced program, and there are no other programs under which the Company repurchases shares.
Biggest changeAll share repurchases were made under NIKE's publicly announced program, and there are no other programs under which the Company repurchases shares.
The performance graph above is being furnished solely to accompany this Annual Report pursuant to Item 201(e) of Regulation S-K, is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 2023 FORM 10-K 26 Table of Contents
The performance graph above is being furnished solely to accompany this Annual Report pursuant to Item 201(e) of Regulation S-K, is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 2024 FORM 10-K 28 Table of Contents
Footwear Index and the Standard & Poor's Apparel, Accessories & Luxury Goods Index include companies in two major lines of business in which the Company competes. The indices do not encompass all of the Company's competitors, nor all product categories and lines of business in which the Company is engaged.
The Dow Jones U.S. Footwear Index and the Standard & Poor's Apparel, Accessories & Luxury Goods Index include companies in two major lines of business in which the Company competes. The indices do not encompass all of the Company's competitors, nor all product categories and lines of business in which the Company is engaged.
Footwear Index; and the Standard & Poor's Apparel, Accessories & Luxury Goods Index. The graph assumes an investment of $100 on May 31, 2018, in each of the indices and our Class B Common Stock. Each of the indices assumes that all dividends were reinvested on the day of issuance.
Footwear Index; and the Standard & Poor's Apparel, Accessories & Luxury Goods Index. The graph assumes an investment of $100 on May 31, 2019, in each of the indices and our Class B Common Stock. Each of the indices assumes that all dividends were reinvested on the day of issuance. The Dow Jones U.S.
At July 12, 2023, there were 21,813 holders of record of NIKE's Class B Common Stock and 15 holders of record of NIKE's Class A Common Stock. These figures do not include beneficial owners who hold shares in nominee name.
At July 10, 2024, there were 21,354 holders of record of NIKE's Class B Common Stock and 16 holders of record of NIKE's Class A Common Stock. These figures do not include beneficial owners who hold shares in nominee name.
Footwear Index, the price and returns of NIKE stock have a substantial effect on this index. The Standard & Poor's Apparel, Accessories & Luxury Goods Index consists of Ralph Lauren Corporation, Tapestry, Inc. and V.F. Corporation. The Dow Jones U.S.
Footwear Index consists of NIKE, Crocs Inc., Deckers Outdoor Corporation and Skechers U.S.A., Inc. Because NIKE is part of the Dow Jones U.S. Footwear Index, the price and returns of NIKE stock have a substantial effect on this index. The Standard & Poor's Apparel, Accessories & Luxury Goods Index consists of Ralph Lauren Corporation, Tapestry, Inc. and lululemon athletica.
The following table presents a summary of share repurchases made during the quarter ended May 31, 2023: PERIOD TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE PAID PER SHARE APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (IN MILLIONS) March 1 — March 31, 2023 4,118,427 $ 120.04 $ 14,099 April 1 — April 30, 2023 3,282,288 $ 125.01 $ 13,689 May 1 — May 31, 2023 4,134,824 $ 118.30 $ 13,200 11,535,539 $ 120.83 2023 FORM 10-K 25 Table of Contents PERFORMANCE GRAPH The following graph demonstrates a five-year comparison of cumulative total returns for NIKE's Class B Common Stock; the Standard & Poor's 500 Stock Index; the Dow Jones U.S.
The following table presents a summary of share repurchases made during the quarter ended May 31, 2024: PERIOD TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE PAID PER SHARE APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (IN MILLIONS) March 1 — March 31, 2024 2,583,730 $ 98.42 $ 9,739 April 1 — April 30, 2024 3,606,667 $ 93.73 $ 9,401 May 1 — May 31, 2024 4,895,400 $ 93.16 $ 8,945 11,085,797 $ 94.57 2024 FORM 10-K 27 Table of Contents PERFORMANCE GRAPH The following graph demonstrates a five-year comparison of cumulative total returns for NIKE's Class B Common Stock; the Standard & Poor's 500 Stock Index; the Dow Jones U.S.
As of May 31, 2023, the Company had repurchased 43.5 million shares at an average price of $110.38 per share for a total approximate cost of $4.8 billion under the new program.
In June 2022, the Board of Directors approved a four-year, $18 billion share repurchase program. As of May 31, 2024, the Company had repurchased 84.9 million shares at an average price of $106.65 per share for a total approximate cost of $9.1 billion under this program.
Removed
In August 2022, the Company terminated the previous four-year, $15 billion share repurchase program approved by the Board of Directors in June 2018.
Removed
Prior to the program's termination, the Company purchased 6.5 million shares at an average price of $109.85 per share for a total approximate cost of $710.0 million during the first quarter of fiscal 2023 and 83.8 million shares at an average price of $111.82 per share for a total approximate cost of $9.4 billion during the term of this program.
Removed
Upon termination of the $15 billion program, the Company began purchasing shares under a new four-year, $18 billion share repurchase program authorized by the Board of Directors in June 2022.
Removed
Repurchases under the Company's new program will be made in open market or privately negotiated transactions in compliance with the Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements and other relevant factors.
Removed
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG NIKE, INC.; S&P 500 INDEX; THE DOW JONES U.S. FOOTWEAR INDEX; AND S&P APPAREL, ACCESSORIES & LUXURY GOODS INDEX The Dow Jones U.S. Footwear Index consists of NIKE, Crocs Inc., Deckers Outdoor Corporation and Skechers U.S.A., Inc. Because NIKE is part of the Dow Jones U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

127 edited+17 added−31 removed57 unchanged
Biggest changeFISCAL 2023 COMPARED TO FISCAL 2022 Corporate's loss before interest and taxes increased $621 million during fiscal 2023, primarily due to the following: • an unfavorable change of $371 million primarily related to higher wage and other professional services expenses, reported as a component of consolidated Operating overhead expense; • an unfavorable change of $352 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross margin; • an unfavorable change of $45 million largely due to net unfavorable activity related to our strategic distributor partnership transition within APLA, including the loss recognized upon completion of the sale our entities in Argentina and Uruguay to a third-party distributor in the second quarter of fiscal 2023.
Biggest changeFISCAL 2024 COMPARED TO FISCAL 2023 Corporate's loss before interest and taxes decreased $221 million during fiscal 2024, primarily due to the following: • a favorable change in net foreign currency gains and losses of $588 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated Gross profit; • a favorable change of $80 million primarily related to lower wage-related expenses, partially offset by higher professional services, reported as a component of consolidated Operating overhead expense; • a favorable change of $27 million primarily related to the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, partially offset by the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, as well as net favorable settlements of legal matters in the prior year, reported as a component of consolidated Other (income) expense, net; and • an unfavorable change of $443 million related to restructuring charges, $379 million reported as a component of consolidated Operating overhead expense and $64 million reported as a component of consolidated Cost of sales.
Fluctuations in currency exchange rates create volatility in our reported results as we are required to translate the balance sheets, operational results and cash flows of these subsidiaries into U.S. Dollars for consolidated reporting. The translation of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S.
Dollar. Fluctuations in currency exchange rates create volatility in our reported results as we are required to translate the balance sheets, operational results and cash flows of these subsidiaries into U.S. Dollars for consolidated reporting. The translation of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S.
Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories businesses. Our strategy is to achieve long-term revenue growth by creating innovative, "must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.
Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories businesses. Our strategy is to achieve sustainable profitable long-term revenue growth by creating innovative, "must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.
These amounts represent the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which are reflected net of foreign tax credits we utilized. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for further information related to our off-balance sheet arrangements, bank guarantees and letters of credit.
These amounts represent the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which are reflected net of foreign tax credits we utilized. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information related to our off-balance sheet arrangements, bank guarantees and letters of credit.
We have, in the past, hedged and may, in the future, hedge net investment positions in certain foreign subsidiaries to mitigate the effects of foreign exchange fluctuations on these net investments. These hedges are accounted for as net investment hedges in accordance with U.S. GAAP. There were no outstanding net investment hedges as of May 31, 2023 and 2022.
We have, in the past, hedged and may, in the future, hedge net investment positions in certain foreign subsidiaries to mitigate the effects of foreign exchange fluctuations on these net investments. These hedges are accounted for as net investment hedges in accordance with U.S. GAAP. There were no outstanding net investment hedges as of May 31, 2024 and 2023.
As of May 31, 2023, we were in full compliance with each of these covenants, and we believe it is unlikely we will fail to meet any of these covenants in the foreseeable future. Liquidity is also provided by our $3 billion commercial paper program.
As of May 31, 2024, we were in full compliance with each of these covenants, and we believe it is unlikely we will fail to meet any of these covenants in the foreseeable future. Liquidity is also provided by our $3 billion commercial paper program.
OFF-BALANCE SHEET ARRANGEMENTS As of May 31, 2023, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current and future financial condition, results of operations, liquidity, capital expenditures or capital resources.
OFF-BALANCE SHEET ARRANGEMENTS As of May 31, 2024, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current and future financial condition, results of operations, liquidity, capital expenditures or capital resources.
For further information, see "Use of Non-GAAP Financial Measures". (2) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
For additional information, see "Use of Non-GAAP Financial Measures". (2) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
If we estimate the net realizable value of our inventory is less than the cost of the inventory recorded on our books, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value. This reserve is recorded as a charge to Cost of sales.
If we estimate the net realizable value of our inventory is less than the cost of the inventory, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value. This reserve is recorded as a charge to Cost of sales.
Refer to Note 7 — Income Taxes and Note 11 — Benefit Plans in the accompanying Notes to the Consolidated Financial Statements for further information related to uncertain tax positions and post-retirement benefits, respectively.
Refer to Note 7 — Income Taxes and Note 11 — Benefit Plans in the accompanying Notes to the Consolidated Financial Statements for additional information related to uncertain tax positions and post-retirement benefits, respectively.
We sell our products through NIKE Direct operations, which is comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital"), to wholesale accounts and to a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.
We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.
We do not hold or issue derivative instruments for trading or speculative purposes. 2023 FORM 10-K 42 Table of Contents Refer to Note 4 — Fair Value Measurements and Note 12 — Risk Management and Derivatives in the accompanying Notes to the Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end.
We do not hold or issue derivative instruments for trading or speculative purposes. 2024 FORM 10-K 44 Table of Contents Refer to Note 4 — Fair Value Measurements and Note 12 — Risk Management and Derivatives in the accompanying Notes to the Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end.
In addition to contingent liabilities recorded for probable losses, we disclose contingent liabilities when there is a reasonable possibility the ultimate loss will materially exceed the recorded liability. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information. 2023 FORM 10-K 48 Table of Contents
In addition to contingent liabilities recorded for probable losses, we disclose contingent liabilities when there is a reasonable possibility the ultimate loss will materially exceed the recorded liability. Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information. 2024 FORM 10-K 50 Table of Contents
As of and for the fiscal years ended May 31, 2023 and 2022, we did not have any borrowings outstanding under our $3 billion program. We may continue to issue commercial paper or other debt securities depending on general corporate needs.
As of and for the fiscal years ended May 31, 2024 and 2023, we did not have any borrowings outstanding under our $3 billion program. We may issue commercial paper or other debt securities depending on general corporate needs.
Unit sales of footwear increased 7%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.
Unit sales of footwear increased 6%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.
It is not possible to determine how much we will spend on this product on an annual basis as the amount of product provided to the endorsers will depend on many factors and the contracts generally do not stipulate a minimum amount of cash to be spent on the product. • Product Purchase Obligations — As of May 31, 2023, we had product purchase obligations of $6.4 billion, all of which are payable within the next 12 months.
It is not possible to determine how much we will spend on this product on an annual basis as the amount of product provided to the endorsers will depend on many factors and the contracts generally do not stipulate a minimum amount of cash to be spent on the product. • Product Purchase Obligations — As of May 31, 2024, we had product purchase obligations of $5.7 billion, all of which are payable within the next 12 months.
EBIT divided by total NIKE, Inc. Revenues. Our EBIT Margin calculation for fiscal 2023 and fiscal 2022 is as follows: YEAR ENDED MAY 31, (Dollars in millions) 2023 2022 Numerator Earnings before interest and taxes $ 6,195 $ 6,856 Denominator Total NIKE, Inc.
EBIT divided by total NIKE, Inc. Revenues. Our EBIT Margin calculation for fiscal 2024, 2023 and 2022 are as follows: YEAR ENDED MAY 31, (Dollars in millions) 2024 2023 2022 Numerator Earnings before interest and taxes $ 6,539 $ 6,195 $ 6,856 Denominator Total NIKE, Inc.
ROIC is considered a non-GAAP financial measure, see "Use of Non-GAAP Financial Measures" for further information. For discussion related to the results of operations and changes in financial condition for fiscal 2022 compared to fiscal 2021 refer to Part II, Item 7.
ROIC is considered a non-GAAP financial measure, see "Use of Non-GAAP Financial Measures" for additional information. For discussion related to the results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022 refer to Part II, Item 7.
Revenues $ 51,217 $ 46,710 EBIT Margin 12.1% 14.7% 2023 FORM 10-K 29 Table of Contents Return on Invested Capital ("ROIC") : Represents a performance measure that management believes is useful information in understanding the Company's ability to effectively manage invested capital.
Revenues $ 51,362 $ 51,217 $ 46,710 EBIT Margin 12.7% 12.1% 14.7% 2024 FORM 10-K 31 Table of Contents Return on Invested Capital ("ROIC") : Represents a performance measure that management believes is useful information in understanding the Company's ability to effectively manage invested capital.
(5) Others include products not allocated to Men's, Women's, NIKE Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer. 2023 FORM 10-K 32 Table of Contents FISCAL 2023 NIKE BRAND REVENUE HIGHLIGHTS The following tables present NIKE Brand revenues disaggregated by reportable operating segment, distribution channel and major product line: FISCAL 2023 COMPARED TO FISCAL 2022 • NIKE, Inc.
(4) Others include products not allocated to Men's, Women's, Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer. 2024 FORM 10-K 34 Table of Contents FISCAL 2024 NIKE BRAND REVENUE HIGHLIGHTS The following tables present NIKE Brand revenues disaggregated by reportable operating segment, distribution channel and major product line: FISCAL 2024 COMPARED TO FISCAL 2023 • NIKE, Inc.
As of May 31, 2023, we had Cash and equivalents and Short-term investments totaling $10.7 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S. Treasury obligations and other investment grade fixed-income securities. Our fixed-income investments are exposed to both credit and interest rate risk.
As of May 31, 2024, we had Cash and equivalents and Short-term investments totaling $11.6 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S. Treasury obligations and other investment grade fixed-income securities. Our fixed-income investments are exposed to both credit and interest rate risk.
There were no cash flows from net investment hedge settlements for the years ended May 31, 2023, 2022 and 2021. LIQUIDITY AND CAPITAL RESOURCES CASH FLOW ACTIVITY Cash provided (used) by operations was an inflow of $5,841 million for fiscal 2023, compared to $5,188 million for fiscal 2022.
There were no cash flows from net investment hedge settlements for the years ended May 31, 2024, 2023 and 2022. LIQUIDITY AND CAPITAL RESOURCES CASH FLOW ACTIVITY Cash provided (used) by operations was an inflow of $7,429 million for fiscal 2024, compared to $5,841 million for fiscal 2023.
Higher ASP per pair was primarily due to higher NIKE Direct ASP and a higher mix of full-price sales, largely offset by a lower mix of NIKE Direct sales. • Apparel revenues decreased 7% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's.
Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP. • Apparel revenues decreased 6% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's.
We estimate the combination of the translation of foreign currency-denominated profits from our international businesses, and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had an unfavorable impact on our Income before income taxes of $1,023 million for fiscal 2023.
We estimate the combination of the translation of foreign currency-denominated profits from our international businesses, and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had an unfavorable impact on our Income before income taxes of $68 million for fiscal 2024.
NTC sales to a NIKE entity with a different functional currency results in a foreign currency exposure for the NTC. b. Other NIKE entities purchase product directly from third-party factories in U.S. Dollars. These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S. Dollar. In both purchasing scenarios, a weaker U.S.
NTC sales to a NIKE entity with a different functional currency results in a foreign currency exposure for the NTC. b. Other NIKE entities purchase product directly from third-party factories predominantly in U.S. Dollars. These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S. Dollar.
On March 11, 2022, we entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $2 billion of borrowings, with the option to increase borrowings up to $3 billion in total with lender approval.
The Shelf expires on July 21, 2025. On March 11, 2022, we entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $2 billion of borrowings, with the option to increase borrowings up to $3 billion in total with lender approval.
Based on our current analysis of the provisions, we do not expect these tax law changes to have a material impact on our financial statements; however, we will continue to evaluate their impact as further information becomes available. 2023 FORM 10-K 35 Table of Contents OPERATING SEGMENTS As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, our operating segments are evidence of the structure of the Company's internal organization.
Based on our current analysis of Pillar Two provisions, we do not expect these tax law changes to have a material impact on our Consolidated Financial Statements; however, we will continue to evaluate their impact as additional information becomes available. 2024 FORM 10-K 37 Table of Contents OPERATING SEGMENTS As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, our operating segments are evidence of the structure of the Company's internal organization.
NEW ACCOUNTING PRONOUNCEMENTS Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards. 2023 FORM 10-K 46 Table of Contents CRITICAL ACCOUNTING ESTIMATES Our previous discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
NEW ACCOUNTING PRONOUNCEMENTS Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards. CRITICAL ACCOUNTING ESTIMATES Our previous discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
Our material cash requirements as of May 31, 2023, were as follows: • Debt Obligations — Refer to Note 5 — Short-Term Borrowings and Credit Lines and Note 6 — Long-Term Debt in the accompanying Notes to the Consolidated Financial Statements for further information. • Operating Leases — Refer to Note 17 — Leases in the accompanying Notes to the Consolidated Financial Statements for further information. • Endorsement Contracts — As of May 31, 2023, we had endorsement contract obligations of $7.6 billion, with $1.3 billion payable within 12 months, representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.
Our material cash requirements as of May 31, 2024, were as follows: • Debt Obligations — Refer to Note 5 — Short-Term Borrowings and Credit Lines and Note 6 — Long-Term Debt in the accompanying Notes to the Consolidated Financial Statements for additional information. • Operating Leases — Refer to Note 17 — Leases in the accompanying Notes to the Consolidated Financial Statements for additional information. 2024 FORM 10-K 47 Table of Contents • Endorsement Contracts — As of May 31, 2024, we had endorsement contract obligations of $10.6 billion, with $1.7 billion payable within 12 months, representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.
In some cases, prices are subject to change throughout the production process. • Other Purchase Obligations — As of May 31, 2023, we had $3.3 billion of other purchase obligations, with $1.7 billion payable within the next 12 months.
In some cases, prices are subject to change throughout the production process. • Other Purchase Obligations — As of May 31, 2024, we had $3.5 billion of other purchase obligations, with $1.9 billion payable within the next 12 months.
EBIT for fiscal 2023 and fiscal 2022 is as follows: YEAR ENDED MAY 31, (Dollars in millions) 2023 2022 Net income $ 5,070 $ 6,046 Add: Interest expense (income), net (6) 205 Add: Income tax expense 1,131 605 Earnings before interest and taxes $ 6,195 $ 6,856 EBIT Margin : Calculated as total NIKE, Inc.
EBIT for fiscal 2024, 2023 and 2022 are as follows: YEAR ENDED MAY 31, (Dollars in millions) 2024 2023 2022 Net income $ 5,700 $ 5,070 $ 6,046 Add: Interest expense (income), net (161) (6) 205 Add: Income tax expense 1,000 1,131 605 Earnings before interest and taxes $ 6,539 $ 6,195 $ 6,856 EBIT Margin : Calculated as total NIKE, Inc.
Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under generally accepted accounting principles in the United States of America ("U.S. GAAP"). We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments. The combination of the purchase and sale of the U.S.
Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S. GAAP. We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments. The combination of the purchase and sale of the U.S.
Accordingly, changes in fair value of these instruments are recognized in Other (income) expense, net and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged. TRANSLATIONAL EXPOSURES Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar.
Accordingly, changes in fair value of these instruments are recognized in Other (income) expense, net and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged. 2024 FORM 10-K 45 Table of Contents TRANSLATIONAL EXPOSURES Many of our foreign subsidiaries operate in functional currencies other than the U.S.
Dollar reduces inventory costs incurred by NIKE whereas a stronger U.S. Dollar increases its cost. 2. Factory input costs: NIKE operates a foreign currency adjustment program with certain factories.
In both purchasing scenarios, a weaker U.S. Dollar reduces inventory costs incurred by NIKE whereas a stronger U.S. Dollar increases its cost. 2. Factory input costs: NIKE operates a foreign currency adjustment program with certain factories.
Generally, these are accounted for as cash flow hedges. 2023 FORM 10-K 43 Table of Contents Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement are not formally designated as hedging instruments.
Generally, these are accounted for as cash flow hedges. Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement are not formally designated as hedging instruments.
As a part of the transition tax related to the Tax Cuts and Jobs Act, as of May 31, 2023, we had $644 million in estimated future cash payments, with $161 million payable within the next 12 months.
As a part of the transition tax related to the Tax Cuts and Jobs Act, as of May 31, 2024, we had $483 million in estimated future cash payments, with $215 million payable within the next 12 months.
USE OF NON-GAAP FINANCIAL MEASURES Throughout this Annual Report on Form 10-K, we discuss non-GAAP financial measures, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with U.S. GAAP.
USE OF NON-GAAP FINANCIAL MEASURES Throughout this Annual Report on Form 10-K, we discuss non-GAAP financial measures, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP").
This was partially offset by higher full-price ASP, net of discounts, largely due to strategic pricing actions and product mix. • Selling and administrative expense increased 15% due to higher operating overhead and demand creation expense.
The higher full-price ASP, net of discounts, was largely due to strategic pricing actions, partially offset by product mix. • Selling and administrative expense increase of 2% due to higher demand creation and operating overhead expense.
As a result, our calculation of this metric may not be comparable to similarly titled metrics used by other companies. 2023 FORM 10-K 30 Table of Contents RESULTS OF OPERATIONS (Dollars in millions, except per share data) FISCAL 2023 FISCAL 2022 % CHANGE FISCAL 2021 % CHANGE Revenues $ 51,217 $ 46,710 10 % $ 44,538 5 % Cost of sales 28,925 25,231 15 % 24,576 3 % Gross profit 22,292 21,479 4 % 19,962 8 % Gross margin 43.5 % 46.0 % 44.8 % Demand creation expense 4,060 3,850 5 % 3,114 24 % Operating overhead expense 12,317 10,954 12 % 9,911 11 % Total selling and administrative expense 16,377 14,804 11 % 13,025 14 % % of revenues 32.0 % 31.7 % 29.2 % Interest expense (income), net (6) 205 — 262 — Other (income) expense, net (280) (181) — 14 — Income before income taxes 6,201 6,651 -7 % 6,661 0 % Income tax expense 1,131 605 87 % 934 -35 % Effective tax rate 18.2 % 9.1 % 14.0 % NET INCOME $ 5,070 $ 6,046 -16 % $ 5,727 6 % Diluted earnings per common share $ 3.23 $ 3.75 -14 % $ 3.56 5 % 2023 FORM 10-K 31 Table of Contents CONSOLIDATED OPERATING RESULTS REVENUES (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) NIKE, Inc.
As a result, our calculation of this metric may not be comparable to similarly titled metrics used by other companies. 2024 FORM 10-K 32 Table of Contents RESULTS OF OPERATIONS (Dollars in millions, except per share data) FISCAL 2024 FISCAL 2023 % CHANGE FISCAL 2022 % CHANGE Revenues $ 51,362 $ 51,217 0 % $ 46,710 10 % Cost of sales 28,475 28,925 -2 % 25,231 15 % Gross profit 22,887 22,292 3 % 21,479 4 % Gross margin 44.6 % 43.5 % 46.0 % Demand creation expense 4,285 4,060 6 % 3,850 5 % Operating overhead expense 12,291 12,317 0 % 10,954 12 % Total selling and administrative expense 16,576 16,377 1 % 14,804 11 % % of revenues 32.3 % 32.0 % 31.7 % Interest expense (income), net (161) (6) — 205 — Other (income) expense, net (228) (280) — (181) — Income before income taxes 6,700 6,201 8 % 6,651 -7 % Income tax expense 1,000 1,131 -12 % 605 87 % Effective tax rate 14.9 % 18.2 % 9.1 % NET INCOME $ 5,700 $ 5,070 12 % $ 6,046 -16 % Diluted earnings per common share $ 3.73 $ 3.23 15 % $ 3.75 -14 % 2024 FORM 10-K 33 Table of Contents CONSOLIDATED OPERATING RESULTS REVENUES (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) NIKE, Inc.
Unit sales of footwear increased 17%, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth.
Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth.
This was partially offset by higher full-price ASP, net of discounts, due to product mix and strategic pricing actions. • Selling and administrative expense increased 8% due to higher operating overhead and demand creation expense.
This was partially offset by higher full-price ASP, net of discounts, primarily due to product mix and strategic pricing actions. • Selling and administrative expense increase of 4% due to higher demand creation and operating overhead expense. Demand creation expense increased primarily due to higher digital marketing and sports marketing expense.
Net income, adjusted for non-cash items, generated $6,354 million of operating cash inflow for fiscal 2023, compared to $6,848 million for fiscal 2022. The net change in working capital and other assets and liabilities resulted in a decrease to Cash provided (used) by operations of $513 million for fiscal 2023 compared to a decrease of $1,660 million for fiscal 2022.
Net income, adjusted for non-cash items, generated $6,713 million of operating cash inflow for fiscal 2024, compared to $6,354 million for fiscal 2023. The net change in working capital and other assets and liabilities resulted in an increase to Cash provided (used) by operations of $716 million for fiscal 2024 compared to a decrease of $513 million for fiscal 2023.
On March 10, 2023, we entered into a 364-day committed credit facility agreement with a syndicate of banks which provides for up to $1 billion of borrowings, with the option to increase borrowings up to $1.5 billion in total with lender approval. The facility matures on March 8, 2024, with an option to extend the maturity date by 364 days.
On March 8, 2024, we entered into a 364-day committed credit facility agreement with a syndicate of banks which provides for up to $1 billion of borrowings, with the option to increase borrowings up to $1.5 billion in total with lender approval.
TOTAL SELLING AND ADMINISTRATIVE EXPENSE (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE FISCAL 2021 % CHANGE Demand creation expense (1) $ 4,060 $ 3,850 5 % $ 3,114 24 % Operating overhead expense 12,317 10,954 12 % 9,911 11 % Total selling and administrative expense $ 16,377 $ 14,804 11 % $ 13,025 14 % % of revenues 32.0 % 31.7 % 30 bps 29.2 % 250 bps (1) Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary product, television, digital and print advertising and media costs, brand events and retail brand presentation.
TOTAL SELLING AND ADMINISTRATIVE EXPENSE (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE FISCAL 2022 % CHANGE Demand creation expense (1) $ 4,285 $ 4,060 6 % $ 3,850 5 % Operating overhead expense 12,291 12,317 0 % 10,954 12 % Total selling and administrative expense $ 16,576 $ 16,377 1 % $ 14,804 11 % % of revenues 32.3 % 32.0 % 30 bps 31.7 % 30 bps (1) Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary product, television, digital and print advertising and media costs, brand events and retail brand presentation.
Reported EBIT increased 2% due to higher revenues and the following: • Gross margin contraction of approximately 190 basis points primarily due to higher product costs, reflecting product mix and higher input costs, as well as unfavorable changes in standard foreign currency exchange rates.
Reported EBIT decreased 2% reflecting higher revenues and the following: • Gross margin contraction of approximately 220 basis points primarily due to unfavorable changes in standard foreign currency exchange rates, lower margin in NIKE Direct and higher product costs, reflecting higher product input costs and product mix.
SALES-RELATED RESERVES Provisions for anticipated sales returns consist of both contractual return rights and discretionary authorized returns. Provisions for post-invoice sales discounts consist of both contractual programs and discretionary discounts that are expected to be granted at a later date.
Provisions for post-invoice sales discounts consist of both contractual programs and discretionary discounts that are expected to be granted at a later date.
REVENUES $ 51,217 $ 46,710 10 % 16 % $ 44,538 5 % 6 % (1) The percent change excluding currency changes represents a non-GAAP financial measure. For further information, see "Use of Non-GAAP Financial Measures".
REVENUES $ 51,362 $ 51,217 0 % 1 % $ 46,710 10 % 16 % (1) The percent change excluding currency changes represents a non-GAAP financial measure. For additional information, see "Use of Non-GAAP Financial Measures".
Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S.
MANAGING TRANSLATIONAL EXPOSURES To minimize the impact of translating foreign currency denominated revenues and expenses into U.S. Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S.
We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net had an unfavorable impact of approximately $1,023 million and a favorable impact of approximately $132 million and $19 million on our Income before income taxes for the years ended May 31, 2023, 2022 and 2021, respectively.
We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net had an unfavorable impact of approximately $68 million on our Income before income taxes for the year ended May 31, 2024.
Unit sales of footwear increased 13%, while higher average selling price ("ASP") per pair contributed approximately 7 percentage points of footwear revenue growth.
Unit sales of footwear decreased 2%, while higher average selling price ("ASP") per pair contributed approximately 3 percentage points of footwear revenue growth.
Unit sales of apparel decreased 8%, while higher ASP per unit contributed approximately 1 percentage point of apparel revenue growth. Higher ASP per unit was primarily due to a higher mix of full price sales, partially offset by lower off-price ASP.
Unit sales of apparel decreased 9%, while higher ASP per unit contributed approximately 7 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price ASP, off-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.
REVENUES $ 51,217 $ 46,710 10 % 16 % $ 44,538 5 % 6 % Supplemental NIKE Brand Revenues Details: NIKE Brand Revenues by: Sales to Wholesale Customers $ 27,397 $ 25,608 7 % 14 % $ 25,898 -1 % -1 % Sales through NIKE Direct 21,308 18,726 14 % 20 % 16,370 14 % 15 % Global Brand Divisions (2) 58 102 -43 % -43 % 25 308 % 302 % TOTAL NIKE BRAND REVENUES $ 48,763 $ 44,436 10 % 16 % $ 42,293 5 % 6 % NIKE Brand Revenues on a Wholesale Equivalent Basis (1) : Sales to Wholesale Customers $ 27,397 $ 25,608 7 % 14 % $ 25,898 -1 % -1 % Sales from our Wholesale Operations to NIKE Direct Operations 12,730 10,543 21 % 27 % 9,872 7 % 7 % TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,127 $ 36,151 11 % 18 % $ 35,770 1 % 1 % NIKE Brand Wholesale Equivalent Revenues by: (1),(4) Men's $ 20,733 $ 18,797 10 % 17 % $ 18,391 2 % 3 % Women's 8,606 8,273 4 % 11 % 8,225 1 % 1 % NIKE Kids' 5,038 4,874 3 % 10 % 4,882 0 % 0 % Jordan Brand 6,589 5,122 29 % 35 % 4,780 7 % 7 % Others (5) (839) (915) 8 % -3 % (508) -80 % -79 % TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,127 $ 36,151 11 % 18 % $ 35,770 1 % 1 % (1) The percent change excluding currency changes and the presentation of wholesale equivalent revenues represent non-GAAP financial measures.
REVENUES $ 51,362 $ 51,217 0 % 1 % $ 46,710 10 % 16 % Supplemental NIKE Brand Revenues Details: NIKE Brand Revenues by: Sales to Wholesale Customers $ 27,758 $ 27,397 1 % 2 % $ 25,608 7 % 14 % Sales through NIKE Direct 21,519 21,308 1 % 1 % 18,726 14 % 20 % Global Brand Divisions (2) 45 58 -22 % -25 % 102 -43 % -43 % TOTAL NIKE BRAND REVENUES $ 49,322 $ 48,763 1 % 1 % $ 44,436 10 % 16 % NIKE Brand Revenues on a Wholesale Equivalent Basis (1) : Sales to Wholesale Customers $ 27,758 $ 27,397 1 % 2 % $ 25,608 7 % 14 % Sales from our Wholesale Operations to NIKE Direct Operations 13,009 12,730 2 % 2 % 10,543 21 % 27 % TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,767 $ 40,127 2 % 2 % $ 36,151 11 % 18 % NIKE Brand Wholesale Equivalent Revenues by: (1) Men's $ 20,868 $ 20,733 1 % 1 % $ 18,797 10 % 17 % Women's 8,586 8,606 0 % 1 % 8,273 4 % 11 % Kids' 5,111 5,038 1 % 1 % 4,874 3 % 10 % Jordan Brand 6,988 6,589 6 % 7 % 5,122 29 % 35 % Others (4) (786) (839) 6 % 6 % (915) 8 % -3 % TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,767 $ 40,127 2 % 2 % $ 36,151 11 % 18 % (1) The percent change excluding currency changes and the presentation of wholesale equivalent revenues represent non-GAAP financial measures.
The breakdown of Revenues is as follows: (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) North America $ 21,608 $ 18,353 18 % 18 % $ 17,179 7 % 7 % Europe, Middle East & Africa 13,418 12,479 8 % 21 % 11,456 9 % 12 % Greater China 7,248 7,547 -4 % 4 % 8,290 -9 % -13 % Asia Pacific & Latin America (2) 6,431 5,955 8 % 17 % 5,343 11 % 16 % Global Brand Divisions (3) 58 102 -43 % -43 % 25 308 % 302 % TOTAL NIKE BRAND $ 48,763 $ 44,436 10 % 16 % $ 42,293 5 % 6 % Converse 2,427 2,346 3 % 8 % 2,205 6 % 7 % Corporate (4) 27 (72) — — 40 — — TOTAL NIKE, INC.
The breakdown of Revenues is as follows: (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) North America $ 21,396 $ 21,608 -1 % -1 % $ 18,353 18 % 18 % Europe, Middle East & Africa 13,607 13,418 1 % 0 % 12,479 8 % 21 % Greater China 7,545 7,248 4 % 8 % 7,547 -4 % 4 % Asia Pacific & Latin America (2) 6,729 6,431 5 % 5 % 5,955 8 % 17 % Global Brand Divisions (3) 45 58 -22 % -25 % 102 -43 % -43 % TOTAL NIKE BRAND $ 49,322 $ 48,763 1 % 1 % $ 44,436 10 % 16 % Converse 2,082 2,427 -14 % -15 % 2,346 3 % 8 % Corporate (4) (42) 27 — — (72) — — TOTAL NIKE, INC.
Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP. • Apparel revenues increased 13% on a currency-neutral basis, primarily due to higher revenues in Men's. Unit sales of apparel increased 9%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth.
Unit sales of footwear increased 8%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points. Lower ASP per pair was primarily due to lower NIKE Direct ASP, partially offset by higher full-price ASP. • Apparel revenues increased 14% on a currency-neutral basis, primarily due to higher revenues in Men's and Women's.
NIKE Direct revenues increased 5%, due to comparable store sales growth of 9% and the addition of new stores, partially offset by digital sales declines of 4%. • Footwear revenues increased 8% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand and Men's.
NIKE Direct revenues increased 4%, driven by comparable store sales growth of 10% and the addition of new stores, partially offset by a decline in digital sales of 2%. • Footwear revenues increased 7% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.
See "Use of Non-GAAP Financial Measures" for further information. 2023 FORM 10-K 36 Table of Contents NORTH AMERICA (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 14,897 $ 12,228 22 % 22 % $ 11,644 5 % 5 % Apparel 5,947 5,492 8 % 9 % 5,028 9 % 9 % Equipment 764 633 21 % 21 % 507 25 % 25 % TOTAL REVENUES $ 21,608 $ 18,353 18 % 18 % $ 17,179 7 % 7 % Revenues by: Sales to Wholesale Customers $ 11,273 $ 9,621 17 % 18 % $ 10,186 -6 % -6 % Sales through NIKE Direct 10,335 8,732 18 % 18 % 6,993 25 % 25 % TOTAL REVENUES $ 21,608 $ 18,353 18 % 18 % $ 17,179 7 % 7 % EARNINGS BEFORE INTEREST AND TAXES $ 5,454 $ 5,114 7 % $ 5,089 0 % FISCAL 2023 COMPARED TO FISCAL 2022 • North America revenues increased 18% on a currency-neutral basis, primarily due to higher revenues in Men's and the Jordan Brand.
See "Use of Non-GAAP Financial Measures" for additional information. 2024 FORM 10-K 38 Table of Contents NORTH AMERICA (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 14,537 $ 14,897 -2 % -2 % $ 12,228 22 % 22 % Apparel 5,953 5,947 0 % 0 % 5,492 8 % 9 % Equipment 906 764 19 % 19 % 633 21 % 21 % TOTAL REVENUES $ 21,396 $ 21,608 -1 % -1 % $ 18,353 18 % 18 % Revenues by: Sales to Wholesale Customers $ 11,004 $ 11,273 -2 % -2 % $ 9,621 17 % 18 % Sales through NIKE Direct 10,392 10,335 1 % 1 % 8,732 18 % 18 % TOTAL REVENUES $ 21,396 $ 21,608 -1 % -1 % $ 18,353 18 % 18 % EARNINGS BEFORE INTEREST AND TAXES $ 5,822 $ 5,454 7 % $ 5,114 7 % FISCAL 2024 COMPARED TO FISCAL 2023 • North America revenues decreased 1% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, partially offset by higher revenues in the Jordan Brand.
Demand creation expense increased primarily due to higher sports marketing expense and higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates. 2023 FORM 10-K 40 Table of Contents GLOBAL BRAND DIVISIONS (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues $ 58 $ 102 -43 % -43 % $ 25 308 % 302 % Earnings (Loss) Before Interest and Taxes $ (4,841) $ (4,262) -14 % $ (3,656) -17 % 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.
Operating overhead expense increased primarily due to higher other administrative costs. 2024 FORM 10-K 42 Table of Contents GLOBAL BRAND DIVISIONS (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues $ 45 $ 58 -22 % -25 % $ 102 -43 % -43 % Earnings (Loss) Before Interest and Taxes $ (4,720) $ (4,841) 2 % $ (4,262) -14 % 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.
EARNINGS BEFORE INTEREST AND TAXES (1) $ 6,195 $ 6,856 -10 % $ 6,923 -1 % EBIT margin (1) 12.1 % 14.7 % 15.5 % Interest expense (income), net (6) 205 — 262 — TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 6,201 $ 6,651 -7 % $ 6,661 0 % (1) Total NIKE Brand EBIT, Total NIKE, Inc.
EARNINGS BEFORE INTEREST AND TAXES (1) $ 6,539 $ 6,195 6 % $ 6,856 -10 % EBIT margin (1) 12.7 % 12.1 % 14.7 % Interest expense (income), net (161) (6) — 205 — TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 6,700 $ 6,201 8 % $ 6,651 -7 % (1) Total NIKE Brand EBIT, Total NIKE, Inc.
CONVERSE (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 2,155 $ 2,094 3 % 8 % $ 1,986 5 % 6 % Apparel 90 103 -13 % -7 % 104 -1 % -3 % Equipment 28 26 8 % 16 % 29 -10 % -16 % Other (1) 154 123 25 % 25 % 86 43 % 42 % TOTAL REVENUES $ 2,427 $ 2,346 3 % 8 % $ 2,205 6 % 7 % Revenues by: Sales to Wholesale Customers $ 1,299 $ 1,292 1 % 7 % $ 1,353 -5 % -4 % Sales through Direct to Consumer 974 931 5 % 8 % 766 22 % 22 % Other (1) 154 123 25 % 25 % 86 43 % 42 % TOTAL REVENUES $ 2,427 $ 2,346 3 % 8 % $ 2,205 6 % 7 % EARNINGS BEFORE INTEREST AND TAXES $ 676 $ 669 1 % $ 543 23 % (1) Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights.
CONVERSE (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 1,800 $ 2,155 -16 % -17 % $ 2,094 3 % 8 % Apparel 93 90 3 % 4 % 103 -13 % -7 % Equipment 37 28 32 % 34 % 26 8 % 16 % Other (1) 152 154 -1 % -2 % 123 25 % 25 % TOTAL REVENUES $ 2,082 $ 2,427 -14 % -15 % $ 2,346 3 % 8 % Revenues by: Sales to Wholesale Customers $ 1,098 $ 1,299 -15 % -16 % $ 1,292 1 % 7 % Sales through Direct to Consumer 832 974 -15 % -14 % 931 5 % 8 % Other (1) 152 154 -1 % -2 % 123 25 % 25 % TOTAL REVENUES $ 2,082 $ 2,427 -14 % -15 % $ 2,346 3 % 8 % EARNINGS BEFORE INTEREST AND TAXES $ 474 $ 676 -30 % $ 669 1 % (1) Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights.
We believe the assumptions and judgments involved in the accounting estimates described below have the greatest potential impact on our Consolidated Financial Statements, so we consider these to be our critical accounting estimates. Management has reviewed and discussed these critical accounting estimates with the Audit & Finance Committee of the Board of Directors.
We believe the assumptions and judgments involved in the accounting estimates described below have the greatest potential impact on our Consolidated Financial Statements, so we consider these to be our critical accounting estimates.
This completed the transition of our NIKE Brand businesses within our CASA marketplace, which now reflects a full distributor operating model. For more information see Note 18 — Acquisitions and Divestitures within the accompanying Notes to the Consolidated Financial Statements.
The impacts of closing these transactions are included within Corporate and are not reflected in the APLA operating segment results. This completed the transition of our NIKE Brand businesses within our CASA marketplace, which now reflects a full distributor operating model. For more information see Note 18 — Divestitures within the accompanying Notes to the Consolidated Financial Statements.
Demand creation expense increased primarily due to higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates. 2023 FORM 10-K 38 Table of Contents GREATER CHINA (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2021 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 5,435 $ 5,416 0 % 8 % $ 5,748 -6 % -10 % Apparel 1,666 1,938 -14 % -7 % 2,347 -17 % -21 % Equipment 147 193 -24 % -18 % 195 -1 % -6 % TOTAL REVENUES $ 7,248 $ 7,547 -4 % 4 % $ 8,290 -9 % -13 % Revenues by: Sales to Wholesale Customers $ 3,866 $ 4,081 -5 % 2 % $ 4,513 -10 % -14 % Sales through NIKE Direct 3,382 3,466 -2 % 5 % 3,777 -8 % -12 % TOTAL REVENUES $ 7,248 $ 7,547 -4 % 4 % $ 8,290 -9 % -13 % EARNINGS BEFORE INTEREST AND TAXES $ 2,283 $ 2,365 -3 % $ 3,243 -27 % FISCAL 2023 COMPARED TO FISCAL 2022 • Greater China revenues increased 4% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand, partially offset by lower revenues in Men's and Women's.
Operating overhead expense increased primarily due to unfavorable changes in foreign currency exchange rates. 2024 FORM 10-K 40 Table of Contents GREATER CHINA (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 5,552 $ 5,435 2 % 6 % $ 5,416 0 % 8 % Apparel 1,828 1,666 10 % 14 % 1,938 -14 % -7 % Equipment 165 147 12 % 17 % 193 -24 % -18 % TOTAL REVENUES $ 7,545 $ 7,248 4 % 8 % $ 7,547 -4 % 4 % Revenues by: Sales to Wholesale Customers $ 4,262 $ 3,866 10 % 15 % $ 4,081 -5 % 2 % Sales through NIKE Direct 3,283 3,382 -3 % 1 % 3,466 -2 % 5 % TOTAL REVENUES $ 7,545 $ 7,248 4 % 8 % $ 7,547 -4 % 4 % EARNINGS BEFORE INTEREST AND TAXES $ 2,309 $ 2,283 1 % $ 2,365 -3 % FISCAL 2024 COMPARED TO FISCAL 2023 • Greater China revenues increased 8% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.
Our ROIC calculation as of May 31, 2023 and 2022 is as follows: FOR THE TRAILING FOUR QUARTERS ENDED (Dollars in millions) MAY 31, 2023 MAY 31, 2022 Numerator Net income $ 5,070 $ 6,046 Add: Interest expense (income), net (6) 205 Add: Income tax expense 1,131 605 Earnings before interest and taxes 6,195 6,856 Income tax adjustment (1) (1,130) (624) Earnings before interest and after taxes $ 5,065 $ 6,232 AVERAGE FOR THE TRAILING FIVE QUARTERS ENDED MAY 31, 2023 MAY 31, 2022 Denominator Total debt (2) $ 12,491 $ 12,722 Add: Shareholders' equity 14,982 14,425 Less: Cash and equivalents and Short-term investments 11,394 13,748 Total invested capital $ 16,079 $ 13,399 RETURN ON INVESTED CAPITAL 31.5% 46.5% (1) Equals Earnings before interest and taxes multiplied by the effective tax rate as of the respective quarter end.
Our ROIC calculation as of May 31, 2024 and 2023 is as follows: FOR THE TRAILING FOUR QUARTERS ENDED (Dollars in millions) MAY 31, 2024 MAY 31, 2023 Numerator Net income $ 5,700 $ 5,070 Add: Interest expense (income), net (161) (6) Add: Income tax expense 1,000 1,131 Earnings before interest and taxes 6,539 6,195 Income tax adjustment (1) (976) (1,130) Earnings before interest and after taxes $ 5,563 $ 5,065 AVERAGE FOR THE TRAILING FIVE QUARTERS ENDED MAY 31, 2024 MAY 31, 2023 Denominator Total debt (2) $ 12,110 $ 12,491 Add: Shareholders' equity 14,155 14,982 Less: Cash and equivalents and Short-term investments 10,309 11,394 Total invested capital $ 15,956 $ 16,079 RETURN ON INVESTED CAPITAL 34.9% 31.5% (1) Equals Earnings before interest and taxes multiplied by the effective tax rate as of each of the respective quarter ends.
The breakdown of EBIT is as follows: (Dollars in millions) FISCAL 2023 FISCAL 2022 % CHANGE FISCAL 2021 % CHANGE North America $ 5,454 $ 5,114 7 % $ 5,089 0 % Europe, Middle East & Africa 3,531 3,293 7 % 2,435 35 % Greater China 2,283 2,365 -3 % 3,243 -27 % Asia Pacific & Latin America 1,932 1,896 2 % 1,530 24 % Global Brand Divisions (4,841) (4,262) -14 % (3,656) -17 % TOTAL NIKE BRAND (1) $ 8,359 $ 8,406 -1 % $ 8,641 -3 % Converse 676 669 1 % 543 23 % Corporate (2,840) (2,219) -28 % (2,261) 2 % TOTAL NIKE, INC.
The breakdown of EBIT is as follows: (Dollars in millions) FISCAL 2024 FISCAL 2023 % CHANGE FISCAL 2022 % CHANGE North America $ 5,822 $ 5,454 7 % $ 5,114 7 % Europe, Middle East & Africa 3,388 3,531 -4 % 3,293 7 % Greater China 2,309 2,283 1 % 2,365 -3 % Asia Pacific & Latin America 1,885 1,932 -2 % 1,896 2 % Global Brand Divisions (4,720) (4,841) 2 % (4,262) -14 % TOTAL NIKE BRAND (1) $ 8,684 $ 8,359 4 % $ 8,406 -1 % Converse 474 676 -30 % 669 1 % Corporate (2,619) (2,840) 8 % (2,219) -28 % TOTAL NIKE, INC.
The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. On an interim basis, we estimate our effective tax rate for the full fiscal year.
INCOME TAXES We are subject to taxation in the United States, as well as various state and foreign jurisdictions. The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. On an interim basis, we estimate our effective tax rate for the full fiscal year.
On a currency-neutral basis, NIKE Direct revenues increased 20% primarily driven by NIKE Brand Digital sales growth of 24%, comparable store sales growth of 14% and the addition of new stores. For further information regarding comparable store sales, including the definition, see "Comparable Store Sales".
On a currency-neutral basis, NIKE Direct revenues increased 1%, primarily driven by comparable store sales growth of 3% and the addition of new stores, partially offset by declines in NIKE Brand Digital sales of 3%, reflecting reduced digital traffic. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales".
For fiscal 2023, the net change in working capital compared to the prior year was impacted by unfavorable changes in Accounts payable, offset by favorable impacts from Inventories and Accounts receivable. These changes were, in part, due to reduced inventory purchases in the current period and timing of wholesale shipments.
For fiscal 2024, the favorable net change in working capital compared to the prior year was primarily impacted by favorable changes to Inventories due to reduced inventory purchases and improved lead times, partially offset by unfavorable changes to Accounts receivable due to the timing of wholesale shipments.
Higher ASP was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and growth in the size of our NIKE Direct business, partially offset by lower NIKE Direct ASP. • NIKE Brand apparel revenues increased 8% on a currency-neutral basis, primarily due to higher revenues in Men's.
Higher ASP per pair was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP. • NIKE Brand apparel revenues were flat on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, offset by higher revenues in Kids'.
The primary financial measure used by the Company to evaluate performance is Earnings Before Interest and Taxes ("EBIT"). As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, certain corporate costs are not included in EBIT.
As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, certain corporate costs are not included in EBIT.
Comparable store sales includes revenues from stores that were temporarily closed during the period as a result of COVID-19. Comparable store sales represents a performance metric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions.
Comparable store sales represents a performance metric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions. The method of calculating comparable store sales varies across the retail industry.
Revenues: NIKE Brand Revenues by: Footwear $ 33,135 $ 29,143 14 % 20 % $ 28,021 4 % 4 % Apparel 13,843 13,567 2 % 8 % 12,865 5 % 6 % Equipment 1,727 1,624 6 % 13 % 1,382 18 % 18 % Global Brand Divisions (2) 58 102 -43 % -43 % 25 308 % 302 % Total NIKE Brand Revenues $ 48,763 $ 44,436 10 % 16 % $ 42,293 5 % 6 % Converse 2,427 2,346 3 % 8 % 2,205 6 % 7 % Corporate (3) 27 (72) — — 40 — — TOTAL NIKE, INC.
Revenues: NIKE Brand Revenues by: Footwear $ 33,427 $ 33,135 1 % 1 % $ 29,143 14 % 20 % Apparel 13,775 13,843 0 % 0 % 13,567 2 % 8 % Equipment 2,075 1,727 20 % 20 % 1,624 6 % 13 % Global Brand Divisions (2) 45 58 -22 % -25 % 102 -43 % -43 % Total NIKE Brand Revenues $ 49,322 $ 48,763 1 % 1 % $ 44,436 10 % 16 % Converse 2,082 2,427 -14 % -15 % 2,346 3 % 8 % Corporate (3) (42) 27 — — (72) — — TOTAL NIKE, INC.
Revenues, respectively. • NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 10% and 16% on a reported and currency-neutral basis, respectively.
Revenues by approximately 1 percentage point. • NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 1% on both a reported and currency-neutral basis.
NIKE Direct revenues increased 18%, driven by strong digital sales growth of 23%, comparable store sales growth of 9% and the addition of new stores. • Footwear revenues increased 22% on a currency-neutral basis, primarily due to higher revenues in Men's and the Jordan Brand.
Wholesale revenues increased 15%. NIKE Direct revenues increased 1%, driven by comparable store sales growth of 1% and the addition of new stores, partially offset by a decline in digital sales of 8%. • Footwear revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.
In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction that are outside our control or influence.
In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction that are outside our control or influence. Refer to Note 12 — Risk Management and Derivatives in the accompanying Notes to the Consolidated Financial Statements for additional information.
Unit sales of footwear increased 9%, while higher ASP per pair contributed approximately 16 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct. • Apparel revenues increased 14% on a currency-neutral basis, primarily due to higher revenues in Men's.
Unit sales of apparel decreased 9%, while higher ASP per unit contributed approximately 9 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price, off-price and NIKE Direct ASPs. • NIKE Brand wholesale revenues increased 1% on a reported basis and 2% on a currency-neutral basis, compared to fiscal 2023.
We do not own the Converse trademarks in Japan and accordingly do not earn revenues in Japan. FISCAL 2023 COMPARED TO FISCAL 2022 • Converse revenues increased 8% on a currency-neutral basis for fiscal 2023 due to revenue growth in North America, Western Europe and licensee markets, partially offset by declines in Asia.
We do not own the Converse trademarks in Japan and accordingly do not earn revenues in Japan. FISCAL 2024 COMPARED TO FISCAL 2023 • Converse revenues decreased 15% on a currency-neutral basis primarily due to declines in North America and Western Europe.
We continue to expect funding of share repurchases will come from operating cash flows. The timing and the amount of share repurchases will be dictated by our capital needs and stock market conditions. CAPITAL RESOURCES On July 21, 2022, we filed a shelf registration statement (the "Shelf") with the U.S.
The timing and the amount of share repurchases will be dictated by our capital needs and stock market conditions. CAPITAL RESOURCES On July 21, 2022, we filed a shelf registration statement (the "Shelf") with the U.S. Securities and Exchange Commission (the "SEC") which permits us to issue an unlimited amount of debt securities from time to time.
This increase was primarily due to higher revenues in Men's, the Jordan Brand, Women's and Kids' which grew 17%, 35%,11% and 10%, respectively, on a wholesale equivalent basis. • NIKE Brand footwear revenues increased 20% on a currency-neutral basis, due to higher revenues in Men's, the Jordan Brand, Women's and Kids'.
The increase, on a currency-neutral basis, was primarily due to higher revenues in the Jordan Brand and Men's. • NIKE Brand footwear revenues increased 1% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand, Men's and Women's.
While individual securities have varying durations, as of May 31, 2023, the weighted-average days to maturity of our cash equivalents and short-term investments portfolio was 98 days. 2023 FORM 10-K 45 Table of Contents We believe that existing Cash and equivalents, Short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.
We believe that existing Cash and equivalents, Short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.
Unit sales of apparel increased 7%, while higher ASP per unit contributed approximately 2 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.
Unit sales of apparel increased 7%, while higher ASP per unit contributed approximately 7 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher NIKE Direct, full-price and off-price ASPs as well as a higher mix of full-price sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDollar debt — Fixed rate Principal payments $ — $ 1,000 $ — $ 2,000 $ — $ 6,000 $ 9,000 $ 7,889 Average interest rate 0.0 % 2.4 % 0.0 % 2.6 % 0.0 % 3.3 % 3.1 % 2023 FORM 10-K 50 Table of Contents
Biggest changeDollar debt — Fixed rate Principal payments $ 1,000 $ — $ 2,000 $ — $ — $ 6,000 $ 9,000 $ 7,631 Average interest rate 2.4 % 0.0 % 2.6 % 0.0 % 0.0 % 3.3 % 3.1 % Interest Rate Swaps — Fixed rate swapped to variable rate Notional amount $ — $ — $ — $ — $ — $ 1,800 $ 1,800 $ (31) Average fixed interest rate 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 3.5 % 3.5 % Average variable interest rate 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 3.7 % 3.7 % 2024 FORM 10-K 52 Table of Contents
Typically, the Company may enter into hedge contracts starting 12 to 24 months in advance of the forecasted transaction and may place incremental hedges up to 100% of the exposure by the time the forecasted transaction occurs. The majority of derivatives outstanding as of May 31, 2023, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.
Typically, the Company may enter into hedge contracts starting 12 to 24 months in advance of the forecasted transaction and may place incremental hedges up to 100% of the exposure by the time the forecasted transaction occurs. The majority of derivatives outstanding as of May 31, 2024, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.
MARKET RISK MEASUREMENT We monitor foreign exchange risk, interest rate risk and related derivatives using a variety of techniques including a review of market value, sensitivity analysis and Value-at-Risk ("VaR"). Our market-sensitive derivative and other financial instruments are foreign currency forward contracts, foreign currency option contracts, intercompany loans denominated in non-functional currencies and fixed interest rate U.S. Dollar denominated debt.
MARKET RISK MEASUREMENT We monitor foreign exchange risk, interest rate risk and related derivatives using a variety of techniques including a review of market value, sensitivity analysis and Value-at-Risk ("VaR"). Our market-sensitive derivative and other financial instruments are foreign currency forward contracts, foreign currency option contracts, interest rate swaps, intercompany loans denominated in non-functional currencies and fixed interest rate U.S.
We use VaR to monitor the foreign exchange risk of our foreign currency forward and foreign currency option derivative instruments only. The VaR determines the maximum potential one-day loss in the fair value of these foreign exchange rate-sensitive financial instruments. The VaR model estimates assume normal market conditions and a 95% confidence level.
Dollar denominated debt. We use VaR to monitor the foreign exchange risk of our foreign currency forward and foreign currency option derivative instruments only. The VaR determines the maximum potential one-day loss in the fair value of these foreign exchange rate-sensitive financial instruments. The VaR model estimates assume normal market conditions and a 95% confidence level.
EXPECTED MATURITY DATE YEAR ENDING MAY 31, (Dollars in millions) 2024 2025 2026 2027 2028 THEREAFTER TOTAL FAIR VALUE Interest Rate Risk Long-term U.S.
EXPECTED MATURITY DATE YEAR ENDING MAY 31, (Dollars in millions) 2025 2026 2027 2028 2029 THEREAFTER TOTAL FAIR VALUE Interest Rate Risk Long-term U.S.
Such a hypothetical loss in the fair value of our derivatives would be offset by increases in the value of the underlying transactions being hedged. The average monthly change in the fair values of foreign currency forward and foreign currency option derivative instruments was $289 million and $170 million during fiscal 2023 and fiscal 2022, respectively.
Such a hypothetical loss in the fair value of our derivatives would be offset by increases in the value of the underlying transactions being hedged. The average monthly change in the fair values of foreign currency forward and foreign currency option derivative instruments was $180 million and $289 million during fiscal 2024 and fiscal 2023, respectively.
The estimated maximum one-day loss in fair value on our foreign currency sensitive derivative financial instruments, derived using the VaR model, was $111 million and $99 million as of May 31, 2023 and 2022, respectively. The VaR increased year-over-year as a result of an increase in foreign currency volatilities as of May 31, 2023.
The estimated maximum one-day loss in fair value on our foreign currency sensitive derivative financial instruments, derived using the VaR model, was $57 million and $111 million as of May 31, 2024 and 2023, respectively. The VaR decreased year-over-year as a result of a decrease in foreign currency volatilities as of May 31, 2024.
The instruments not included in the VaR are intercompany loans denominated in non-functional currencies and fixed interest rate U.S. Dollar denominated debt. Intercompany loans and related interest amounts are eliminated in consolidation.
The instruments not included in the VaR are intercompany loans denominated in non-functional currencies, fixed interest rate U.S. Dollar denominated debt, and interest rate swaps. Intercompany loans and related interest amounts are eliminated in 2024 FORM 10-K 51 Table of Contents consolidation.
Our objective in managing this interest rate exposure is to limit the impact of interest rate changes on earnings and cash flows and to reduce overall borrowing costs. To achieve these objectives, we maintain a mix of commercial paper, bank loans, and fixed-rate debt of varying maturities.
Our objective in managing this interest rate exposure is to limit the impact of interest rate changes on earnings and cash flows and to reduce overall borrowing costs.
Therefore, we consider the interest rate and foreign currency market risks associated with our non-functional currency intercompany loans to be immaterial to our consolidated financial position, results of operations and cash flows. Details of third-party debt are provided in the table below. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.
Furthermore, our non-functional currency intercompany loans are substantially hedged against foreign exchange risk through the use of forward contracts, which are included in the VaR calculation above. Therefore, we consider the interest rate and foreign currency market risks associated with our non-functional currency intercompany loans to be immaterial to our consolidated financial position, results of operations and cash flows.
Removed
Furthermore, our non-functional currency intercompany loans are substantially hedged against foreign exchange risk through the use of forward 2023 FORM 10-K 49 Table of Contents contracts, which are included in the VaR calculation above.
Added
To achieve these objectives, we maintain a mix of commercial paper, bank loans, and fixed-rate debt of varying maturities and have entered into receive-fixed, pay-variable interest rate swaps for a portion of our fixed-rate debt.
Added
Details of third-party debt and interest rate swaps are provided in the table below. The table presents principal cash flows and related weighted average interest rates by expected maturity dates. The weighted average variable interest rates for the fixed rate swapped to variable rate swaps reflect the effective interest rates at May 31, 2024.

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