The latest quarter included a charge of $195.0 million pre-tax restructuring charge associated with its previously-announced corporate restructuring and cost reduction realignment. On an after-tax basis, the restructuring charge totaled $144.5 million, which decreased fourth quarter diluted earnings per share by 29 cents a share.
For the full year, revenues grew 3% to $19.2 billion, compared to $18.6 billion last year. Excluding currency changes, net revenue was up 4% for the year. Fiscal 2009 net income decreased 21% to $1.5 billion, or $3.03 a share.
In the third quarter of 2009, the company incurred a $240.7 million after-tax impairment charge related to its Umbro subsidiary. Fiscal 2008 results included $35.4 million in after-tax gains related to the sale of Bauer Hockey and the Starter Business, and a $105.4 million one-time tax benefit.
For the full-year, comparable net income increased 7% to $1.9 billion and diluted earnings per share increased 10% to $3.81.
“Fiscal 2009 was a year that challenged companies to leverage core strengths and adapt quickly to a changing landscape. Our strong results demonstrate that we are meeting these challenges and seizing the opportunity to optimize our position as the industry leader,” said Mark Parker, President and CEO of NIKE, Inc. “By focusing on what Nike does best creating great product, telling great stories, and connecting with consumers I believe that we will become a stronger, more profitable, and more valuable company for our shareholders. Weve made some tough decisions over the past year, yet given our ability to increase our competitive separation through product innovation and brand relevance across our portfolio of businesses, I remain strongly optimistic about our long-term potential.”
Futures Orders
The company reported worldwide futures orders for Nike brand athletic footwear and apparel, scheduled for delivery from June 2009 through November 2009, totaling $7.8 billion, 12% lower than orders reported for the same period last year. Excluding currency changes, reported orders would have declined 5%.
By region, futures orders for the
Regional Highlights
During the fourth quarter,
For the full fiscal year,
EMEA
Fourth quarter revenue for the EMEA region was down 19% to $1.2 billion. Excluding currency changes, revenue was down 3%. Footwear revenue decreased 13% to $772.2 million, apparel revenue was down 28% to $383.9 million and equipment revenue declined 25% to $85.3 million due to the negative impact of currency changes and tough prior year comparisons, which included product sales for the 2008 European Championships. Fourth quarter pre-tax income decreased 3% to $321.1 million.
Full fiscal year EMEA revenue was down 2% to $5.5 billion. Excluding currency changes, revenue for the period was flat to last year. Footwear revenue was up 1% to $3.1 billion, apparel revenue decreased 5% to $2.0 billion and equipment revenue was down 6% to $405.3 million. European fiscal year pre-tax income was up 3% to $1.3 billion.
Fourth quarter revenue for the Asia Pacific region was flat compared to last year at $833.1 million. Excluding currency changes, revenue grew 3%. Footwear revenue was flat with last year at $421.9 million, apparel revenue was up 1% to $342.7 million, and equipment revenue was down 1% to $68.5 million. Fourth quarter pre-tax income increased 41% to $238.2 million mainly driven by lower demand creation spending. Last years fourth quarter demand creation spending was higher in support of the Olympic Games in
For the full fiscal year, Asia Pacific revenue increased 15% to $3.3 billion. Excluding currency changes, revenue grew 12%. Footwear revenue increased 15% to $1.7 billion, apparel revenue grew 16% to $1.3 billion and equipment revenue was up 10% to $272.6 million. For the fiscal year pre-tax income increased 23% to $853.4 million due to higher revenue, lower demand creation spending and better gross margin performance.
Fourth quarter revenue in the
Full fiscal year revenue for the
Other Businesses
For the fourth quarter, Other business revenue, which includes Cole Haan, Converse Inc., Hurley International LLC, NIKE Golf, and Umbro Ltd. decreased 5% to $702.3 million and pre-tax income dropped 56% to $40.6 million. For the fiscal year, Other business revenue decreased 1% to $2.5 billion and had a pre-tax loss of $196.7 million versus pre-tax income of $364.9 million in fiscal 2008.
Due to changes in the companys affiliate brands portfolio and the inclusion of an impairment charge in fiscal 2009 related to Umbro, current year amounts are not directly comparable to the prior year. In fiscal 2008, following a strategic review of the companys affiliate brands portfolio, the Starter brand and Bauer Hockey were sold in the third and fourth quarter respectively, and Umbro was acquired in the fourth quarter.
For the continuing Other businesses (Cole Haan, Converse Inc., Hurley International LLC, and NIKE Golf) fourth quarter revenues declined 3% and pretax income declined 47%. For this same group, fiscal year revenue grew 5% while pretax income declined 28%. Pretax income for the fourth quarter and fiscal year were negatively impacted by lower profits at Cole Haan and NIKE Golf, reflecting difficult conditions in these market sectors.
Income Statement Review
In the fourth quarter of fiscal 2009 gross margins were 43.4% compared to 45.8% for the same period last year. For the fiscal year, gross margins were 44.9% compared to 45.0% last year. Gross margins for the fourth quarter were lower than the prior year primarily due to higher product input costs and product markdowns taken to manage inventories.
For the fourth quarter of fiscal 2009 selling and administrative expenses were 29.6% of revenue compared to 33.1% for the same period last year reflecting the companys actions to proactively reduce expenses. For the fiscal year, selling and administrative expenses as a% of revenue were 32.1% versus 32.0% last year due primarily to increased investment in retail stores.
The effective tax rate for the fourth quarter was 29.8% compared to 24.3% for the same period last year. The fourth quarter tax rate was higher than the prior year due to the impact of the restructuring charges and one time benefits in the same period last year. For the fiscal year, the effective tax rate was 24.0% compared to 24.8% last year. This years tax rate was lower than fiscal 2008 due to the impact of the impairment of Umbros goodwill, intangible and other assets; and a lower on-going tax rate on operations outside the
Balance Sheet Review
At the end of the fiscal year, global inventories stood at $2.4 billion, down 3% from May 31, 2008. Cash and short-term investments at year-end were $3.5 billion, 24% higher than $2.8 billion last year.
Share Repurchase
The company did not purchase any shares during the fourth quarter. Under the companys four-year, $3 billion share repurchase program, approved by the Board of Directors in June 2006, a total of 10.6 million shares for approximately $639.0 million was purchased during the first two quarters of fiscal 2009. Program to date, the company has purchased a total of 49.2 million shares for approximately $2.7 billion.
