NIKE, INC.
Annual Report for the Fiscal Year Ended May 31, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (page 53)
Note 1 — Summary of Significant Accounting Policies
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Inventory Valuation (page 55)
Inventories related to our wholesale operations are stated at lower of cost or market and valued
on a first-in, first-out (“FIFO”) or moving average cost basis. Inventories related to our retail operations
are stated at the lower of average cost or market using the retail inventory method. Under the retail
inventory method, the valuation of inventories at cost is calculated by applying a cost-to-retail ratio
to the retail value inventories. Permanent and point of sale markdowns, when recorded, reduce both the
retail and cost components of inventory on hand so as to maintain the already established cost-to-retail
relationship.
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Source: http://sec.gov/Archives/edgar/data/320187/000119312508159004/d10k.htm#fin16266_6