NIKE, Inc. reported that revenues for the fiscal first quarter ended August 31 increased 18% to $3.6 billion, versus $3.0 billion for the same period last year. First quarter net income totaled $326.8 million, or $1.21 per diluted share, compared to $261.2 million, or 98 cents per diluted share in the prior year.

“We're off to a great start,” said Philip H. Knight, Chairman and CEO. “Our first quarter revenues reached record levels driven by strong results around the world and across all our brands. These results reflect both the strength of our brands and our ability to execute across our portfolio of businesses.”*

Knight added, “Nike's consistent performance has been the result of the quality of our management team and our commitment to delivering value to shareholders over the long-term.”*

Futures Orders

The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from September 2004 through January 2005, totaling $4.3 billion, 9.9% higher than such orders reported for the same period last year. Approximately 0.7% of this growth was due to changes in currency exchange rates.

By region, futures orders for the U.S. were up 11%; Europe increased 6%; Asia Pacific grew 17%; and the Americas increased 6%. In Europe, three points of the increase were due to currency exchange rates. Currency exchange reduced the growth in Asia Pacific and the Americas by approximately 0.5 points and five points, respectively.

Knight continued, “The strong growth in futures is further evidence of the strength of our brand and product lines around the world. Growing consumer demand for Nike products was particularly evident in our U.S. region, where our futures growth reached the highest level in more than seven years.”

Regional Highlights

U.S. region revenues increased 12% to $1.4 billion versus $1.2 billion for the first quarter of fiscal 2004. U.S. athletic footwear revenues increased 12% to $921.4 million. Apparel revenues increased 13% to $391.3 million. Equipment revenues increased 11% to $89.0 million.

European region revenues (which includes the Middle East and Africa) grew 14% to $1.2 billion, up from $1.0 billion for the same period last year. Five points of this growth were the result of changes in currency exchange rates. Footwear revenues increased 12% to $663.3 million, apparel revenues increased 20% to $409.7 million and equipment revenues increased 7% to $84.9 million.

Asia Pacific region revenues grew 17% to $406.0 million compared to $348.0 million a year ago. Five points of this growth were the result of changes in currency exchange rates. Footwear revenues were up 8% to $218.6 million, apparel revenues increased 31% to $148.8 million and equipment grew 21% to $38.6 million.

Americas region revenues increased 7% to $161.7 million, an improvement from $151.1 million in the first quarter of fiscal 2004. Currency exchange rates resulted in a three percentage point decrease in this growth rate. Footwear revenues were up 12% to $114.8 million, apparel revenues decreased 8% to $35.5 million and equipment improved 19% to $11.4 million.


Other revenues, which include Converse Inc., NIKE Golf, Bauer NIKE Hockey Inc., Cole Haan, Hurley International LLC and Exeter Brands Group LLC, grew 64% to $434.5 million from $265.2 million last year. Beginning this quarter, the “Other Revenues” category includes results for Exeter Brands, a wholly-owned Nike subsidiary formed to provide products for the value channel. Exeter Brands includes the Starter business acquired by the Company in August 2004.

Gross margins were 44.5% compared to 43.0% last year. Selling and administrative expenses were 30.1% of first quarter revenues, compared to 28.7% last year. The effective tax rate for the first quarter was 35.4%.

At quarter end, global inventories stood at $1.6 billion, an increase of 11% from August 31, 2003. Cash and short-term investments were $1.3 billion at the end of the quarter, compared to $997.8 million last year.

                                  NIKE, Inc.
                      CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE QUARTER ENDED AUGUST 31, 2004
                     (In millions, except per share data)

    INCOME                              QUARTER ENDING
    STATEMENT                     8/31/2004       8/31/2003         % Chg

    Revenues                       $3,561.8        $3,024.9           18%
    Cost of Sales                   1,976.0         1,723.4           15%
    Gross Margin                    1,585.8         1,301.5           22%
                                      44.5%           43.0%

    SG&A                            1,073.6           869.6           23%
                                      30.1%           28.7%

    Interest Expense, net               4.8             7.5          -36%
    Other                               1.9            23.8          -92%

    Income before income taxes        505.5           400.6           26%
    Income Taxes                      178.7           139.4           28%
                                      35.4%           34.8%

    Net Income                       $326.8          $261.2           25%

    Diluted EPS                       $1.21           $0.98           23%

    Basic EPS                         $1.24           $0.99           25%