Nike Released Q4 Revenues Worth $12.3 Billion, Up 96%

On Thursday, June 24, Nike Inc released its fourth-quarter and full-year results which sharply soared marking its highest in its 50-year history.

The company’s revenue surged 96% to $12.3 billion which is up from 88% on a currency-neutral basis.

This is hugely driven by the recovery of its business operations due to the impact of the coronavirus pandemic.

Moreover, the Nike Brand revenues were $11.8 billion, which increased 88% to the previous year on a currency-neutral basis.

This is due to the triple-digit growth in the firm’s wholesale business as well as robust double-digit growth in Nike Direct.

Furthermore, the revenues for Converse were $596 million which climbed 85% on a currency-neutral basis.

This was led by a strong marketplace demand in the United States and Western Europe.

Meanwhile, Nike’s gross margin also progressed 850 basis points to 45.8%.

This is primarily due to annualizing the effects of COVID-19 which includes lower factory cancellation charges and lower inventory inactivity reserves.

Also, its selling and administrative expenses advanced 17% to $3.7 billion.

The demand creation expense was $997 million which was up by 21%.

This is due to the return of sport and brand events which drove a surge in advertising, marketing expense, and digital marketing investments.

Consequently, the operating overhead expense advanced 16% to $2.7 billion due to a climb in wage-related expenses, higher strategic tech investments, and Nike Direct variable costs.

The shoe company also stated that its effective tax rate was 18.6% against the 1.7% for the same period last year.

Lastly, Nike’s net income was $1.5 billion and its diluted earnings per share was $0.93 in comparison to a net loss for the 2020 Q4 of $760 million and $0.51 net loss per share.

Fiscal 2021 Income Statement

For Nike Inc’s Fiscal 2021 Income Statement, its revenue hiked 19% to $44.5 billion which is a 17% increase on a currency-neutral basis.

While its gross margin boosted 44.8% to 140 basis points due to annualizing the impacts of the coronavirus pandemic.

This includes lesser factory cancellation charges, drop-in inventory nonuse reserves, and the conducive rate impact of supply chain fixed costs on a larger volume of wholesale shipments.

Also, an increase in gross margin reflects higher full-price product margins across wholesale and NIKE Direct.

Meanwhile, the company’s selling and administrative expenses plummeted 1% to $13.0 billion.

Nike also said that its effective tax rate was 14% against 12.1% for the same period in 2020.

This was due to the subsided benefits from discontinuous items like stock-based compensation.

Briefly, the firm’s net income came at $5.7 billion and its diluted earnings per share closed at $3.56 which is up by 123%.