NIKE Inc
For the period ended Feb 29, 2024. Filed Apr 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 29, 2024 · Filed Apr 4, 2024
NKE$38.59-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-11-30; filed 2024-01-05.
0000320187-24-000004
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-02-29; filed 2024-04-04.
0000320187-24-000019
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 206 previous paragraphs and 219 current paragraphs.
86 unchanged; 93 reworded; 37 added; 24 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
The Consumer Direct Acceleration strategy, which launched in July 2020, has driven revenue growth and millions of new connections with our consumers, and shifted the mix of our business toward our owned stores and digital platforms. To holistically serve all of our consumers across the marketplace, we expect to continue to invest in our NIKE Direct operations while also increasing investment to elevate and differentiate our brand experience within our wholesale partners. In addition, our product creation and marketing organizations are aligned to a consumer construct focused on sports dimensions through Men's, Women's and Kids', which allows us to better serve consumer needs. We also remain focused on accelerating our pace of innovation and maximizing the impact of our storytelling.
Current report
•NIKE, Inc. Revenues for the third quarter of fiscal 2024 were $12.43 billion compared to $12.39 billion for the third quarter of fiscal 2023
Current report
In December 2023, we announced an enterprise initiative designed to accelerate our future growth. As part of this initiative, we are taking steps to streamline the organization. These changes will result in a net reduction of our global workforce. We expect a majority of the future annual wage savings from these actions will be reinvested in consumer facing activities to drive greater impact for our consumers, sports dimensions and the total marketplace.
Current report
During the third quarter of fiscal 2024, we incurred pre-tax charges of $403 million, primarily associated with employee severance costs and accelerated stock-based compensation expense. For more information, refer to Note 14 — Restructuring within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
Current report
•NIKE Brand wholesale revenues increased 3% compared to the third quarter of fiscal 2023, on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was driven by higher revenues in Greater China, North America and Asia Pacific & Latin America ("APLA"), partially offset by lower revenues in EMEA.
Current report
•NIKE Brand wholesale revenues were flat compared to the first nine months of fiscal 2023, on a reported and currency-neutral basis, as higher revenues in Greater China and APLA were offset by lower revenues in North America and EMEA.
Current report
•Lower other costs, including warehousing costs (increasing gross margin approximately 50 basis points); and
Current report
•Restructuring charges (decreasing gross margin approximately 50 basis points).
Current report
•Lower other costs (increasing gross margin approximately 10 basis points).
Current report
For more information related to our organizational realignment and related costs, refer to Note 14 — Restructuring within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
Current report
Our effective tax rate was 16.5% for the third quarter of fiscal 2024, substantially consistent with 16.0% for the third quarter of fiscal 2023.
Current report
•Footwear revenues increased 4% on a currency-neutral basis, primarily due to higher revenues in Kids', Women's and Men's. Unit sales of footwear increased 7%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to a lower mix of NIKE Direct sales and lower NIKE Direct ASP.
Current report
Reported EBIT increased 18% reflecting higher revenues and the following:
Current report
•Gross margin expansion of 290 basis points primarily due to higher full-price ASP, net of discounts, largely due to strategic pricing actions and lower discounts, as well as lower product costs, reflecting lower ocean freight rates and logistics costs, partially offset by higher product input costs.
Current report
•Selling and administrative expense was flat as higher demand creation expense was offset by lower operating overhead expense. The increase in demand creation expense was primarily due to higher advertising and marketing expense and higher sports marketing expense. The decrease in operating overhead expense was primarily due to lower wage-related expenses.
Current report
•Footwear revenues decreased 1% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand. Unit sales of footwear decreased 8%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. 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.
Current report
•EMEA revenues decreased 4% on a currency-neutral basis, primarily due to lower revenues in Women's, Men's and Kids'. Wholesale revenues decreased 5%. NIKE Direct revenues decreased 4%, driven by digital sales declines of 10%, reflecting reduced digital traffic, partially offset by comparable store sales growth of 6% and the addition of new stores.
Current report
•Gross margin was flat, as lower product costs, reflecting lower ocean freight rates and logistics costs, and higher full-price ASP, net of discounts, primarily due to strategic pricing actions, were offset by unfavorable changes in standard foreign currency exchange rates, lower margin in NIKE Direct and lower off-price margins.
Current report
•Selling and administrative expense increase of 1% driven by higher demand creation expense, partially offset by lower operating overhead expense. The increase in demand creation expense was primarily due to higher advertising and marketing expense. The decrease in operating overhead expense was primarily due to lower other administrative costs and wage-related expenses, largely offset by unfavorable changes in foreign currency exchange rates.
Current report
•EMEA revenues were flat on a currency-neutral basis, primarily due to lower revenues in Kids' and Women's, partially offset by higher revenues in Men's. Wholesale revenues decreased 2%. NIKE Direct revenues increased 3%, driven by comparable store sales growth of 10% and the addition of new stores, partially offset by digital sales declines of 1%.
Current report
•Footwear revenues increased 3% on a currency-neutral basis, primarily due to higher revenues in Men's, partially offset by Kids'. Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales.
Current report
•Footwear revenues increased 5% on a currency-neutral basis due to higher revenues in Men's, Women's, Kids' and the Jordan Brand. Unit sales of footwear increased 9%, while lower ASP per pair reduced footwear revenues by approximately 4 percentage points. Lower ASP per pair was primarily due to lower NIKE Direct ASP.
Current report
•Selling and administrative expense decrease of 4% primarily due to lower operating overhead expense. Operating overhead expense decreased due to lower other administrative costs, favorable changes in foreign currency exchange rates and lower wage-related expenses.
Current report
•Footwear revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, the Jordan Brand, Women's and Kids'. Unit sales of footwear increased 7%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to lower NIKE Direct ASP, partially offset by higher full-price ASP.
Current report
Reported EBIT was flat reflecting higher revenues and the following:
Current report
•Gross margin contraction of approximately 70 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates and lower off-price margins, partially offset by higher full-price ASP, net of discounts, largely due to strategic pricing actions, partially offset by product mix.
Current report
Reported EBIT decreased 3% reflecting higher revenues and the following:
Current report
•Selling and administrative expense increase of 2% due to higher demand creation and operating overhead expense. Demand creation expense increased primarily due to higher retail brand presentation expense and digital marketing, partially offset by lower advertising and marketing expense. Operating overhead expense increased primarily due to other administrative costs, partially offset by lower wage-related expenses.
Current report
•Footwear revenues increased 9% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'. Unit sales of footwear increased 7%, while higher ASP per pair contributed approximately 2 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, a higher mix of NIKE Direct sales and higher off-price ASP, partially offset by lower NIKE Direct ASP.
Current report
•Apparel revenues decreased 4% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's. Unit sales of apparel decreased 11%, 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.
Current report
Reported EBIT decreased 4% reflecting higher revenues and the following:
Current report
•Wholesale revenues decreased 22% on a currency-neutral basis, driven by declines in North America, Western Europe and Asia.
Current report
Reported EBIT decreased 40% reflecting lower revenues and the following:
Current report
Reported EBIT decreased 28% reflecting lower revenues and the following:
Current report
•an unfavorable change of $403 million related to restructuring charges, $340 million reported as a component of consolidated Operating overhead expense and $63 million reported as a component of consolidated gross margin;
Current report
•an unfavorable change of $403 million related to restructuring charges, $340 million reported as a component of consolidated Operating overhead expense and $63 million reported as a component of consolidated gross margin;
Current report
On March 8, 2024, subsequent to the end of the third quarter of fiscal 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 an option to increase borrowings up to $1.5 billion in total with lender approval. The facility matures on March 7, 2025, with an option to extend the maturity date an additional 364 days. This facility replaces the prior $1 billion 364-day credit facility agreement entered into on March 10, 2023, which matured on March 8, 2024. Refer to Note 4 – Short-term Borrowings and Credit Lines for more information.
Removed paragraphs (24)
Previous report
•NIKE, Inc. Revenues for the second quarter of fiscal 2024 were $13.4 billion, an increase of 1% on a reported basis and a decrease of 1% on a currency-neutral basis, compared to the second quarter of fiscal 2023
Previous report
•NIKE Brand wholesale revenues decreased 2% and 3% compared to the second quarter of fiscal 2023, on a reported and currency-neutral basis, respectively, primarily due to decreases in North America and EMEA, reflecting our proactive decisions to prioritize marketplace health in the current year coupled with our liquidation of excess inventory in the prior year.
Previous report
•Footwear revenues decreased 5% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand. Unit sales of footwear decreased 17%, while higher ASP per pair contributed approximately 12 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price and NIKE Direct ASPs as well as growth in NIKE Direct.
Previous report
•Apparel revenues decreased 1% on a currency-neutral basis, primarily due to lower revenues in Men's, partially offset by higher revenues in Kids' and Women's. Unit sales of apparel decreased 16%, while higher ASP per unit contributed 15 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
Previous report
Reported EBIT increased 2% reflecting lower revenues and the following:
Previous report
•Footwear revenues decreased 3% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand. Unit sales of footwear decreased 15%, while higher ASP per pair contributed approximately 12 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price and NIKE Direct ASPs as well as growth in NIKE Direct.
Previous report
•Selling and administrative expense increase of 3% driven by higher operating overhead expense. The increase in operating overhead expense was primarily due to higher NIKE Direct variable costs. Demand creation expense was flat as lower sports marketing expense and lower advertising and marketing expense was offset by higher digital marketing.
Previous report
•EMEA revenues decreased 3% on a currency-neutral basis due to lower revenues in Women's, Kids' and Men's, partially offset by higher revenues in the Jordan Brand. Wholesale revenues decreased 8%, reflecting our proactive decisions to prioritize marketplace health in the current year coupled with our liquidation of excess inventory in the prior year. NIKE Direct revenues increased 7%, driven by digital sales growth of 7%, comparable store sales growth of 8% and the addition of new stores.
Previous report
•Footwear revenues increased 1% on a currency-neutral basis due to higher revenues in Men's and the Jordan Brand, largely offset by lower revenues in Kids' and Women's. Unit sales of footwear decreased 5%, while higher ASP per pair contributed approximately 6 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to growth in NIKE Direct and higher full-price ASP.
Previous report
•Selling and administrative expense increase of 8% due to higher demand creation and operating overhead expense. Demand creation expense increased primarily due to higher sports marketing expense and unfavorable changes in foreign currency exchange rates. Operating overhead expense increased primarily due to unfavorable changes in foreign currency exchange rates.
Previous report
•EMEA revenues increased 2% on a currency-neutral basis due to higher revenues in Men's, partially offset by lower revenues in Kids', Women's and the Jordan Brand. NIKE Direct revenues increased 7%, driven by comparable store sales growth of 11%, the addition of new stores and digital sales growth of 3%.
Previous report
•Footwear revenues increased 6% on a currency-neutral basis, primarily due to higher revenues in Men's and Women's, partially offset by lower revenues in Kids'. Unit sales of footwear decreased 1%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct.
Previous report
Reported EBIT decreased 5% reflecting higher revenues and the following:
Previous report
Reported EBIT increased 1% reflecting higher revenues and the following:
Previous report
•Gross margin expansion of approximately 80 basis points, primarily due to lower product costs, reflecting product mix, partially offset by unfavorable changes in standard foreign currency exchange rates and lower ASP, net of discounts, reflecting product mix partially offset by lower discounts.
Previous report
•Selling and administrative expense increase of 7% primarily due to higher operating overhead expense. Operating overhead expense increased due to higher NIKE Direct costs, partially offset by favorable changes in foreign currency exchange rates.
Previous report
Reported EBIT decreased 1% reflecting higher revenues and the following:
Previous report
•Flat gross margin, primarily due to unfavorable changes in standard foreign currency exchange rates offset by higher full-price ASP, net of discounts, largely due to lower discounts.
Previous report
•Footwear revenues increased 15% on a currency-neutral basis, due to higher revenues in Men's, Women's, the Jordan Brand and Kids'. Unit sales of footwear increased 10%, while higher ASP per unit contributed approximately 5 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, growth in NIKE Direct and higher off-price ASP, partially offset by lower NIKE Direct ASP.
Previous report
•Apparel revenues decreased 5% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's. Unit sales of apparel decreased 13%, while higher ASP per unit contributed approximately 8 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price ASP, growth in NIKE Direct and higher off-price ASP, partially offset by lower NIKE Direct ASP.
Previous report
Reported EBIT decreased 5% reflecting higher revenues and the following:
Previous report
•Selling and administrative expense increase of 12% due to higher demand creation and operating overhead expense. Demand creation expense increased primarily due to higher marketing expense. Operating overhead expense increased primarily due to higher wage-related expenses and NIKE Direct variable costs.
Previous report
Reported EBIT decreased 25% reflecting lower revenues and the following:
Previous report
Reported EBIT decreased 22% reflecting lower revenues and the following:
Reworded paragraphs (93)
Previous wording
Through the Consumer Direct Acceleration strategy, we are focused on creating the marketplace of the future with more premium, consistent and seamless consumer experiences, leading with digital and our owned stores, as well as select wholesale partners. In addition, our product creation and marketing organizations are aligned to a consumer construct focused on sports dimensions through Men's, Women's and Kids', which allows us to better serve consumer needs. We continue to invest in a new Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering and other areas to create an end-to-end technology foundation, which we believe will further accelerate our digital transformation. We believe this unified approach will accelerate growth and unlock more efficiency for our business, while driving speed and responsiveness as we serve consumers globally.
Current wording
We continue to invest in a global Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering and other areas to create an end-to-end technology foundation. We believe this approach will accelerate growth and unlock more efficiency for our business, while driving speed and responsiveness as we serve consumers globally across the marketplace.
Previous wording
•NIKE Direct revenues grew 6% from $5.4 billion for the second quarter of fiscal 2023 to $5.7 billion for the second quarter of fiscal 2024, and represented approximately 45% of total NIKE Brand revenues for the second quarter of fiscal 2024
Current wording
•NIKE Direct revenues were $5.4 billion for the third quarter of fiscal 2024 compared to $5.3 billion for the third quarter of fiscal 2023, and represented approximately 45% of total NIKE Brand revenues
Previous wording
•Gross margin for the second quarter of fiscal 2024 increased 170 basis points to 44.6%, primarily driven by strategic pricing actions and lower ocean freight rates, partially offset by unfavorable changes in net foreign currency exchange rates and higher product input costs
Current wording
•Gross margin for the third quarter of fiscal 2024 increased 150 basis points to 44.8%, primarily driven by strategic pricing actions and lower ocean freight rates and logistics costs, partially offset by higher product input costs and restructuring charges
Previous wording
•Inventories as of November 30, 2023, were $8.0 billion, a decrease of 6% compared to May 31, 2023, primarily driven by a decrease in units
Current wording
•Inventories as of February 29, 2024, were $7.7 billion, a decrease of 9% compared to May 31, 2023, primarily driven by a decrease in units
Previous wording
•We returned approximately $1.7 billion to our shareholders in the second quarter of fiscal 2024 through share repurchases and dividends
Current wording
•We returned approximately $1.4 billion to our shareholders in the third quarter of fiscal 2024 through share repurchases and dividends
Previous wording
•Consumer Spending: During the second quarter of fiscal 2024, we saw shifts in consumer behavior as the global economy remains uncertain. Across our industry, consumers are spending more cautiously and promotional activity remains high. In this environment, we experienced lower digital traffic and moderation in our revenue growth. We will continue to monitor macroeconomic conditions, including the potential impacts of inflation and higher interest rates on consumer behavior.
Current wording
•Consumer Spending: During the third quarter of fiscal 2024, consumers continued to spend more cautiously and promotional activity remained high across our industry. In this environment, we continue to experience lower digital traffic and moderation in our revenue growth. We will continue to monitor macroeconomic conditions, including the potential impacts of inflation and higher interest rates on consumer behavior.
Previous wording
•Cost Inflationary Pressures: Inflationary pressures, including higher product input costs, continued to negatively impact our gross margin. These negative impacts on gross margin were more than offset by strategic pricing actions we have taken through the second quarter of fiscal 2024 as well as improvements in ocean freight rates we started to realize at the beginning of the second quarter of fiscal 2024.
Current wording
•Cost Inflationary Pressures: Inflationary pressures, including higher product input costs, continued to negatively impact our gross margin. These negative impacts on gross margin were more than offset by strategic pricing actions we have taken through the third quarter of fiscal 2024, as well as improvements in ocean freight rates and logistics costs we started to realize at the beginning of the second quarter of fiscal 2024.
Previous wording
•Supply Chain Conditions: During the first six months of fiscal 2024 and as of November 30, 2023, our inventory levels were healthy and reflected our proactive actions taken to manage our inventory supply. In addition, we continued to experience normalized inventory transit times and flow of seasonal product.
Current wording
•Supply Chain Conditions: During the first nine months of fiscal 2024 and as of February 29, 2024, our inventory levels were healthy and reflected our proactive actions taken to manage our inventory supply. In addition, we continued to experience normalized inventory transit times and flow of seasonal product.
Previous wording
The operating environment could remain volatile in fiscal 2024, and the risk exists that worsening macroeconomic conditions could have a material adverse impact on our future revenue growth as well as overall profitability. We continue to be confident in our brand strength and deep consumer connections. We are committed to accelerating our pace of innovation, elevating our marketplace experiences and maximizing the impact of our storytelling. We will also continue to focus on driving gross margin expansion and disciplined cost control.
Current wording
The operating environment could remain volatile in the fourth quarter of fiscal 2024, and the risk exists that the worsening of macroeconomic conditions could have a material adverse impact on our revenue growth as well as overall profitability. We continue to be confident in our brand strength and deep consumer connections. We will also continue to focus on driving gross margin expansion and disciplined cost control while managing the health of our most iconic franchises.
Previous wording
In December 2023, we announced an enterprise initiative designed to accelerate our future growth. As part of this initiative, we are taking steps to streamline the organization which are expected to result in pre-tax restructuring charges of approximately $400 million to $450 million, primarily associated with employee severance costs largely expected to be recognized in the third quarter of fiscal 2024 within Operating overhead expense. The expected pre-tax charges are estimates and subject to a number of assumptions. Actual results may differ from the estimates provided above.
Current wording
As of February 29, 2024, we expect to recognize pre-tax charges of approximately $450 million, primarily associated with employee severance costs and accelerated stock-based compensation expense, the majority of which will be recognized by the end of fiscal 2024. The related cash payments are expected to take place through the first half of fiscal 2025. The expected pre-tax charges are estimates and subject to a number of assumptions. Actual results may differ from current estimates.
Previous wording
•NIKE, Inc. Revenues were $13.4 billion for the second quarter of fiscal 2024, which increased 1% on a reported basis and decreased 1% on a currency-neutral basis, compared to the second quarter of fiscal 2023. The decrease, on a currency-neutral basis, was driven by lower revenues in North America, Europe, Middle East & Africa ("EMEA") and Converse, which each reduced NIKE, Inc. Revenues by approximately 1 percentage point. Higher revenues in Asia Pacific & Latin America ("APLA") and Greater China each increased NIKE, Inc. Revenues by approximately 1 percentage point.
Current wording
•NIKE, Inc. Revenues for the third quarter of fiscal 2024 were $12.43 billion compared to $12.39 billion for the third quarter of fiscal 2023. On a currency-neutral basis, NIKE, Inc. revenues were flat, as higher revenues in North America and Greater China, which each increased NIKE, Inc. Revenues by approximately 1 percentage point, were offset by lower revenues in Europe, Middle East & Africa ("EMEA") and Converse, which each reduced NIKE, Inc. Revenues by approximately 1 percentage point.
Previous wording
•NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 1% on a reported basis and were flat on a currency-neutral basis. This was due to higher revenues in the Jordan Brand, offset by lower revenues in Men's, Kids' and Women's.
Current wording
•NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 2% on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was due to higher revenues in Men's, Kids', Women's and the Jordan Brand.
Previous wording
•NIKE Brand footwear revenues were flat on a currency-neutral basis due to higher revenues in the Jordan Brand, offset by lower revenues in Men's, Kids' and Women's. Unit sales of footwear decreased 6%, while higher average selling price ("ASP") per pair contributed approximately 6 percentage points of footwear revenue growth. Higher ASP per pair 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.
Current wording
•NIKE Brand footwear revenues increased 3% on a currency-neutral basis due to higher revenues in Men's, Women's, Kids' and the Jordan Brand. Unit sales of footwear increased 2%, while higher average selling price ("ASP") per pair contributed approximately 1 percentage point of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, partially offset by lower NIKE Direct ASP.
Previous wording
•NIKE Brand apparel revenues decreased 2% 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. Unit sales of apparel decreased 15%, while higher ASP per unit contributed approximately 13 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price, NIKE Direct and off-price ASPs.
Current wording
•NIKE Brand apparel revenues decreased 3% on a currency-neutral basis due to lower revenues in Men's and Women's, partially offset by higher revenues in Kids'. Unit sales of apparel decreased 8%, while higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price, off-price and NIKE Direct ASPs.
Previous wording
•NIKE Direct revenues increased 6%, on a reported basis, from $5.4 billion in the second quarter of fiscal 2023 to $5.7 billion in the second quarter of fiscal 2024. On a currency-neutral basis, NIKE Direct revenues increased 4%, driven by comparable store sales growth of 5%, the addition of new stores and NIKE Brand Digital sales growth of 1%. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales". NIKE Brand Digital sales were $3.5 billion for the second quarter of fiscal 2024 compared to $3.4 billion for the second quarter of fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation. The reclassifications did not have a material impact on our Unaudited Condensed Consolidated Financial Statements.
Current wording
•NIKE Direct revenues were $5.4 billion in the third quarter of fiscal 2024, compared to $5.3 billion for the third quarter of fiscal 2023. On a currency-neutral basis, NIKE Direct revenues were flat, driven by comparable store sales growth of 3% and the addition of new stores, offset by NIKE Brand Digital sales declines of 4%. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales". NIKE Brand Digital sales were $3.0 billion for the third quarter of fiscal 2024 compared to $3.1 billion for the third quarter of fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation. The reclassifications did not have a material impact on our Unaudited Condensed Consolidated Financial Statements.
Previous wording
•NIKE, Inc. Revenues were $26.3 billion for the first six months of fiscal 2024, which increased 1% compared to the first six months of fiscal 2023 on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was driven by higher revenues in Greater China and APLA, which both contributed approximately 1 percentage point to NIKE, Inc. Revenues. Lower revenues in North America reduced NIKE, Inc. Revenues by approximately 1 percentage point.
Current wording
•NIKE, Inc. Revenues were $38.8 billion for the first nine months of fiscal 2024, which increased 1% compared to the first nine months of fiscal 2023 on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was driven by higher revenues in Greater China and APLA, which each contributed approximately 1 percentage point to NIKE, Inc. Revenues. Lower revenues for Converse reduced NIKE, Inc. Revenues by approximately 1 percentage point.
Previous wording
•NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 2% on a reported and currency-neutral basis. This increase was primarily due to higher revenues in the Jordan Brand, partially offset by lower revenues in Men's and Kids'.
Current wording
•NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 2% on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was primarily due to higher revenues in the Jordan Brand, partially offset by lower revenues in Men's and Kids'.
Previous wording
•NIKE Brand footwear revenues increased 2% on a currency-neutral basis due to higher revenues in the Jordan Brand and Women's, partially offset by lower revenues in Kids' and Men's. Unit sales of footwear decreased 5%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct.
Current wording
•NIKE Brand footwear revenues increased 2% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand and Women's, partially offset by lower revenues in Kids'. Unit sales of footwear decreased 2%, while higher ASP per pair contributed approximately 4 percentage points of footwear revenue growth. 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.
Previous wording
•NIKE Brand apparel revenues decreased 1% on a currency-neutral basis, primarily due to lower revenues in Men's, Women's and the Jordan Brand. Unit sales of apparel decreased 15%, while higher ASP per unit contributed approximately 14 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
Current wording
•NIKE Brand apparel revenues decreased 2% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's. Unit sales of apparel decreased 12%, while higher ASP per unit contributed approximately 10 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
Previous wording
•NIKE Direct revenues increased 6%, on a reported basis, from $10.5 billion for the first six months of fiscal 2023 to $11.1 billion for the first six months of fiscal 2024. On a currency-neutral basis, NIKE Direct revenues increased 5%, driven by comparable store sales growth of 7%, the addition of new stores and NIKE Brand Digital sales growth of 2%. NIKE Brand Digital sales were $6.4 billion for the first six months of fiscal 2024 compared to $6.2 billion for the first six months of fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation. The reclassifications did not have a material impact on our Unaudited Condensed Consolidated Financial Statements.
Current wording
•NIKE Direct revenues increased 4%, on a reported basis, from $15.8 billion for the first nine months of fiscal 2023 to $16.5 billion for the first nine months of fiscal 2024. On a currency-neutral basis, NIKE Direct revenues increased 4%, primarily driven by comparable store sales growth of 6% and the addition of new stores. NIKE Brand Digital sales were $9.4 billion for the first nine months of fiscal 2024 compared to $9.3 billion for the first nine months of fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation. The reclassifications did not have a material impact on our Unaudited Condensed Consolidated Financial Statements.
Previous wording
For the second quarter of fiscal 2024, our consolidated gross margin was 170 basis points higher than the prior year primarily due to:
Current wording
For the third quarter of fiscal 2024, our consolidated gross margin was 150 basis points higher than the prior year due to:
Previous wording
•Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 310 basis points) primarily due to strategic pricing actions.
Current wording
•Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 180 basis points), primarily due to strategic pricing actions;
Previous wording
•Higher NIKE Brand product costs, on a wholesale equivalent basis (decreasing gross margin approximately 110 basis points), primarily due to increased product input costs largely offset by lower ocean freight rates;
Current wording
•Lower NIKE Brand product costs, on a wholesale equivalent basis (increasing gross margin approximately 50 basis points), primarily due to lower ocean freight rates and logistics costs, partially offset by higher product input costs;
Previous wording
•Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 60 basis points);
Current wording
•Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 10 basis points).
Previous wording
•Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 20 basis points); and
Current wording
•Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 40 basis points); and
Previous wording
For the first six months of fiscal 2024, our consolidated gross margin was 80 basis points higher than the prior year primarily due to:
Current wording
For the first nine months of fiscal 2024, our consolidated gross margin was 100 basis points higher than the prior year due to:
Previous wording
•Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 320 basis points) primarily due to strategic pricing actions and lower discounts.
Current wording
•Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 270 basis points), primarily due to strategic pricing actions; and
Previous wording
•Higher NIKE Brand product costs, on a wholesale equivalent basis (decreasing gross margin approximately 50 basis points), primarily due to increased product input costs largely offset by lower ocean freight rates;
Current wording
•Higher NIKE Brand product costs, on a wholesale equivalent basis (decreasing gross margin approximately 60 basis points), primarily due to higher product input costs largely offset by lower ocean freight rates and logistics costs; and
Previous wording
•Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 80 basis points); and
Current wording
•Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 50 basis points); and
Previous wording
Demand creation expense increased 1% reflecting an increase in marketing expense. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Current wording
Demand creation expense increased 10% reflecting an increase in marketing expense, primarily due to higher advertising and marketing expense and higher sports marketing expense. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Previous wording
Operating overhead expense increased 1% primarily due to higher wage-related expenses and NIKE Direct variable costs, partially offset by lower technology spend. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
Current wording
Operating overhead expense increased 6% primarily due to restructuring charges, partially offset by lower wage-related expenses and technology spend. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
Previous wording
Demand creation expense increased 7% reflecting an increase in marketing expense. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Current wording
Demand creation expense increased 8% reflecting an increase in marketing expense, primarily due to higher advertising and marketing expense, higher sports marketing expense and higher digital marketing. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Previous wording
Operating overhead expense was flat as increases in NIKE Direct variable costs were offset by lower technology spend and wage-related expenses. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
Current wording
Operating overhead expense increased 3% primarily due to restructuring charges, partially offset by lower technology spend and wage-related expenses. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
Previous wording
For the second quarter of fiscal 2024, Other (income) expense, net decreased from $79 million of other income, net, to $75 million of other income, net, in the current year, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges, partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor.
Current wording
For the third quarter of fiscal 2024, Other (income) expense, net decreased from $58 million of other income, net, to $16 million of other income, net, primarily due to goodwill impairment in the current year and a net unfavorable change in foreign currency conversion gains and losses, including hedges.
Previous wording
For the first six months of fiscal 2024, Other (income) expense, net decreased from $225 million of other income, net, to $85 million of other income, net, in the current year, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges, as well as net favorable settlements of legal matters in the prior year, partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor.
Current wording
For the first nine months of fiscal 2024, Other (income) expense, net decreased from $283 million of other income, net, to $101 million of other income, net, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges, as well as net favorable settlements of legal matters in the prior year and goodwill impairment in the current year. These items were partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor.
Previous wording
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 unfavorable impacts of approximately $37 million and $102 million on our Income before income taxes for the second quarter and first six months of fiscal 2024.
Current wording
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 a favorable impact of $16 million and an unfavorable impact of $86 million on our Income before income taxes for the third quarter and first nine months of fiscal 2024.
Previous wording
Our effective tax rate was 15.2% for the first six months of fiscal 2024, compared to 19.5% for the first six months of fiscal 2023, primarily due to one-time benefits provided by the delay of the effective date of certain U.S. foreign tax credit regulations and a reduction in accrued withholding taxes on undistributed foreign earnings.
Current wording
Our effective tax rate was 15.6% for the first nine months of fiscal 2024, compared to 18.5% for the first nine months of fiscal 2023, primarily due to one-time benefits provided by the delay of the effective date of certain U.S. foreign tax credit regulations and a reduction in accrued withholding taxes on undistributed foreign earnings.
Previous wording
Earnings Before Interest and Taxes ("EBIT"): Calculated as Net income before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. Total NIKE, Inc. EBIT for the three and six months ended November 30, 2023 and 2022 are as follows:
Current wording
Earnings Before Interest and Taxes ("EBIT"): Calculated as Net income before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. Total NIKE, Inc. EBIT for the three and nine months ended February 29, 2024 and February 28, 2023 are as follows:
Previous wording
EBIT margin: Calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. Our EBIT margin calculation for the three and six months ended November 30, 2023 and 2022 are as follows:
Current wording
EBIT margin: Calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. Our EBIT margin calculation for the three and nine months ended February 29, 2024 and February 28, 2023 are as follows:
Previous wording
•North America revenues decreased 3% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand. Wholesale revenues decreased 9%, reflecting our proactive decisions to prioritize marketplace health in the current year coupled with our liquidation of excess inventory in the prior year. NIKE Direct revenues increased 3%, driven by digital sales growth of 2%, comparable store sales growth of 1% and the addition of new stores.
Current wording
•North America revenues increased 3% on a currency-neutral basis due to higher revenues in Kids', Men's, Women's and the Jordan Brand. Wholesale revenues increased 5%. NIKE Direct revenues increased 2%, driven by comparable store sales growth of 1% and the addition of new stores, as well as digital sales growth of 1%.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•Lower margin in our NIKE Direct business (decreasing gross margin approximately 50 basis points);
Current report — wording carried from elsewhere
•Restructuring charges (decreasing gross margin approximately 20 basis points); and
Current report — wording carried from elsewhere
Reported EBIT decreased 6% reflecting lower revenues and the following:
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Our effective tax rate was 17.9% for the second quarter of fiscal 2024 compared to 19.3% for the second quarter of fiscal 2023, primarily due to a one-time benefit provided by the reduction in accrued withholding taxes on undistributed foreign earnings.
Previous report — wording carried elsewhere
•Gross margin expansion of 240 basis points primarily due to higher full-price ASP, net of discounts, largely due to strategic pricing actions and lower discounts. This was partially offset by higher product costs, reflecting higher product input costs partially offset by lower ocean freight rates, and lower margin in NIKE Direct.
Previous report — wording carried elsewhere
•Wholesale revenues decreased 11% on a currency-neutral basis, as declines in North America and Western Europe were partially offset by growth in Asia.