Nike Fiscal Q3 Net Income Up 36% on a 14% Revenue Increase

Nike reported revenues for the third quarter increased 14% to $3.3 billion, versus $2.9 billion for the same period last year. Third quarter net income totaled $273.4 million, or $1.01 per diluted share, compared to $200.3 million, or $0.74 per diluted share in the prior year.

“Today's results mark another terrific quarter for Nike, Inc.,” said William D. Perez, Nike, Inc. President and Chief Executive Officer. “This was our sixth consecutive quarter of double-digit revenue and earnings per share growth. These consistently strong results were driven by excellent performance across geographies and brands, coupled with favorable trends in foreign exchange rates. In addition to another strong quarter for our U.S. business, emerging international markets such as China, Russia and Brazil produced significant growth. While the core Nike Brand fueled the majority of our growth, Nike Golf, Converse and Cole Haan were also major contributors to our positive results.”*

Futures Orders

The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from March 2005 through July 2005, totaling $5.2 billion, 9.6% higher than such orders reported for the same period last year. Approximately one point of this growth was due to changes in currency exchange rates.*

By region, futures orders for the U.S. were up nine percent; Europe increased seven percent; Asia Pacific grew 14%; and the Americas increased 22%. In Europe, two points of the increase were due to currency exchange rates. Currency exchange rates contributed to the growth in Asia Pacific and the Americas by approximately two points and one point, respectively.*

Perez continued, “Global consumer demand for Nike brand footwear and apparel continues to be strong, as evidenced by the growth in futures orders. Demand in the U.S. market remains particularly robust, as Nike product innovation continues to drive the trend toward performance footwear and apparel in this market.”*

United States

During the third quarter, U.S. revenues increased nine percent to $1.3 billion versus $1.2 billion for the third quarter of fiscal 2004. U.S. athletic footwear revenues increased 10% to $849.6 million. Apparel revenues increased 5% to $345.8 million. Equipment revenues increased 12% to $72.8 million. U.S. pre-tax income increased 10% to $259.5 million.

EMEA

Revenues for the Europe, Middle East and Africa region grew 18% to $1.0 billion, up from $878.6 million for the same period last year. Nine points of this growth were the result of changes in currency exchange rates. Footwear revenues increased 14% to $615.3 million, apparel revenues increased 24% to $351.3 million and equipment revenues increased 18% to $67.3 million. Pre-tax income rose 28% to $219.3 million.

Asia Pacific

Revenues in the Asia Pacific region grew 18% to $472.8 million compared to $402.2 million a year ago. Five points of this growth were the result of changes in currency exchange rates. Footwear revenues were up 11% to $237.9 million, apparel revenues increased 25% to $188.3 million and equipment grew 23% to $46.6 million. Pre-tax income was up 16% to $100.4 million.

Americas

Revenues in the Americas region increased 10% to $143.7 million, an improvement from $131.1 million in the third quarter of fiscal 2004. Currency exchange rates resulted in a three-percentage point increase in this growth rate. Footwear revenues were up 13% to $99.6 million, apparel revenues decreased 5% to $33.5 million and equipment improved 34% to $10.6 million. Pre-tax income grew 49% to $23.2 million.

Other Revenues

Other revenues, which include Converse Inc., NIKE Golf, Bauer NIKE Hockey Inc., Cole Haan, Hurley International LLC and Exeter Brands Group LLC, grew 20% to $389.6 million from $325.1 million last year. Pre-tax income increased 724% to $23.9 million.

Gross margins were 44.1% compared to 42.1% last year. Selling and administrative expenses were 31.3% of third quarter revenues, compared to 30.7% last year. The effective tax rate for the third quarter was 33.9%.

At quarter end, global inventories stood at $1.7 billion, an increase of 4% from February 29, 2004. Cash and short-term investments were $1.6 billion at the end of the quarter, compared to $914.7 million last year.

NIKE, Inc.
                      CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE PERIOD ENDED FEBRUARY 28, 2005
                     (In millions, except per share data)


  INCOME                QUARTER ENDING            YEAR-TO-DATE ENDING
  STATEMENT     02/28/2005 02/29/2004  % Chg 02/28/2005 02/29/2004 % Chg
  Revenues        $3,308.2   $2,904.0    14% $10,018.3   $8,766.0   14%
  Cost of Sales    1,849.4    1,682.1    10%   5,585.6    5,043.0   11%
  Gross Margin     1,458.8    1,221.9    19%   4,432.7    3,723.0   19%
                     44.1%      42.1%            44.2%      42.5%

  SG&A             1,035.7      892.0    16%   3,082.5    2,664.1   16%
                     31.3%      30.7%            30.8%      30.4%

  Interest Expense,
   net                (0.1)       5.5     --       8.4       21.1  (60%)
  Other                9.8       17.2    (43%)    19.9       55.3  (64%)


  Income Before
   Income Taxes      413.4      307.2    35%   1,321.9      982.5   35%

  Income Taxes       140.0      106.9    31%     459.8      341.9   34%
                     33.9%      34.8%            34.8%      34.8%


  Net Income        $273.4     $200.3    36%    $862.1     $640.6   35%

  Diluted EPS        $1.01      $0.74    36%     $3.18      $2.38   34%

  Basic EPS          $1.04      $0.76    37%     $3.28      $2.43   35%

  Weighted Average
   Common Shares
   Outstanding:
  Diluted            271.7      271.1            270.9      269.3
  Basic              263.3      263.5            263.1      263.2
  Dividends Declared $0.25      $0.20            $0.70      $0.54

NIKE, Inc.
                          QUARTER ENDING           YEAR-TO-DATE ENDING
  Divisional
   Revenues *  02/28/2005  02/29/2004  % Chg  02/28/2005 02/29/2004 % Chg
  U.S. Region
    Footwear       $849.6      $772.8    10%    $2,451.0   $2,219.2  10%
    Apparel         345.8       329.3     5%     1,121.8    1,074.1   4%
    Equipment        72.8        64.9    12%       229.1      205.7  11%
      Total       1,268.2     1,167.0     9%     3,801.9    3,499.0   9%

  EMEA Region
    Footwear        615.3       537.7    14%     1,810.4    1,600.2  13%
    Apparel         351.3       284.1    24%     1,131.0      950.9  19%
    Equipment        67.3        56.8    18%       211.5      186.9  13%
      Total       1,033.9       878.6    18%     3,152.9    2,738.0  15%

  Asia Pacific Region
    Footwear        237.9       214.2    11%       693.1      622.6  11%
    Apparel         188.3       150.1    25%       544.9      437.9  24%
    Equipment        46.6        37.9    23%       124.3      101.7  22%
      Total         472.8       402.2    18%     1,362.3    1,162.2  17%

  Americas Region
    Footwear         99.6        88.0    13%       344.2      294.5  17%
    Apparel          33.5        35.2    (5%)      115.9      115.1   1%
    Equipment        10.6         7.9    34%        34.6       26.9  29%
      Total         143.7       131.1    10%       494.7      436.5  13%

                  2,918.6     2,578.9    13%     8,811.8    7,835.7  12%

  Other             389.6       325.1    20%     1,206.5      930.3  30%

  Total NIKE Inc.
   Revenues      $3,308.2    $2,904.0    14%   $10,018.3   $8,766.0  14%