Ticker: ‐ NYSE: NKE
Nike Inc.
Investment Analysis Report Analysts: William Brand, JP Tramontana
March 12, 2009
Nike Analysis Report
TABLE OF CONTENTS:
Investment Thesis ............................................................................................................... 3 The Company, Industry, & Competitors............................................................................. 3 Historical Financial Analysis ............................................................................................ 16 Risk Factors ...................................................................................................................... 23 Cost of Capital, Capital Structure Analysis & Distributions ............................................ 25 Financial Statement Forecasts........................................................................................... 28 Cash Flow Valuation......................................................................................................... 28 Summary & Conclusions .................................................................................................. 30 Appendix ........................................................................................................................... 31 Page 2 Nike Analysis Report
Investment Thesis Our analyst team feels that Nike Inc. is a buy because of the large amount of positive
aspects of the company which are both qualitative and quantitative. Nike is the leader in
many different retail environments and we feel that their solid earning power as well as
their diverse and loyal customer base and efficient operations should all contribute to
make the company profitable for years to come. Nike is an extremely unique company
with many competitive advantages and is an industry leader. Nike is undervalued even
given conservative assumptions with a robust financial position and strong growth
opportunities.
Main Drivers of Value:
• Extremely strong brand equity within the retail industry
• Efficient “futures” inventory strategy
• Well positioned balance sheet with less than 10% Debt/Cap (-2B net debt) and
large cash reserves
• Large international growth prospects while maintaining dominant U.S. market
share
These are the main drivers of value for the company that our analyst team expects will
produce stellar financial and operational results for the company both in the near and long
term.
Main Risk Factors:
• Continued macroeconomic downturn resulting in extensively lower consumer
spending associated with a worldwide GDP contraction
• Market saturation and potential lack of room for growth
These are the two most important risk factors for the company however there are more
business risks that affect the company which are detailed further in the Risk Factors
section.
The Company, Industry, & Competitors The Company’s Description “Nike, Inc. designs, develops, and markets footwear, apparel, equipment, and accessory
products worldwide. The company offers various categories of shoes, including running,
training, basketball, soccer, sport-inspired urban shoes, and children’s shoes. Nike, Inc.
also markets its products under the brand names of Converse, Chuck Taylor, All Star,
One Star, John Varvatos, Jack Purcell, Cole Haan, Bragano, and Hurley. The company
sells its products to retail accounts, through stores, independent distributors, and licensees,
as well as through its Website, nikestore.com. As of May 31, 2008, it operated 296 retail
stores in the United States and 260 retail stores internationally. The company was
founded in 1964 and is headquartered in Beaverton, Oregon.”
Source: CapitalIQ1
Page 3 Nike Analysis Report
Source: Nike Inc. 10-K Report 20081
Nike manufactures many different products in many different lines of business that target
a diverse group of customers. Mainly Nike is well known for their athletic shoes but over
the years the company has expanded into having a product for every aspect of virtually
every sport. As well, the company is well positioned because of its exposure to licensing
agreements with major sports teams at the collegiate and professional level as well as
high school and private league programs for younger competitors.
Products & Competition Major Products Nike’s main product is athletic shoes however they as well as well sell products used for
leisure purposes. The company focuses on high quality construction in all of their
products in order to ensure customer satisfaction as well as to maintain the company’s
well known and respected name. Their top sellers are running, training, basketball,
soccer, sport-inspired urban shoes, and children’s shoes. From the 10K, “We also market
shoes designed for aquatic activities, baseball, bicycling, cheerleading, football, golf,
lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and
other athletic and recreational uses. We sell sports apparel and accessories covering most
of the above categories, sports-inspired lifestyle apparel, as well as athletic bags and
accessory items. NIKE apparel and accessories are designed to complement our athletic
footwear products, feature the same trademarks and are sold through the same marketing
and distribution channels. We also market apparel with licensed college and professional
team and league logos. We sell a line of performance equipment under the NIKE brand
name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats,
gloves, protective equipment, golf clubs, and other equipment designed for sports
activities. We also have agreements for licensees to produce and sell NIKE brand
swimwear, team sports apparel, training equipment, children’s clothing, electronic
devices, eyewear, golf accessories, and belts.” The company owns Cole Haan, Converse
Inc. Hurley International and Umbro Ltd. who also produce athletic and leisure footwear
and accessories.
Page 4 Nike Analysis Report
Source: Nike Inc. 10-K Report 20081
Geographic Product Sales
Source: CapitalIQ1
United States Market
The company’s US market share is well known as it is one of the most recognizable
brands. From the 10K, “In fiscal 2008, sales in the United States including U.S. sales of
Cole Haan, Converse, Exeter Brands Group (which we sold in December, 2007), Hurley,
Umbro, NIKE Bauer Hockey (which we sold in April, 2008) and NIKE Golf accounted
for approximately 43 percent of total revenues, compared to 47 percent in fiscal 2007 and
47 percent in fiscal 2006. We estimate that we sell to more than 25,000 retail accounts in
the United States. The NIKE brand domestic retail account base includes a mix of
footwear stores, sporting goods stores, athletic specialty stores, department stores, skate,
tennis and golf shops, and other retail accounts. During fiscal year 2008, our three largest
customers accounted for approximately 24 percent of NIKE brand sales in the United
States.” The company as well uses their innovative “futures” ordering program through
which retailers order in advance (5-6 mo.) for delivery at a specified date and price.”In
fiscal year 2008, 86 percent of our U.S. wholesale footwear shipments (excluding Cole
Haan, Converse, Exeter Brands Group, Hurley, NIKE Golf, Umbro, and NIKE Bauer
Hockey) were made under the futures program, compared to 94 percent in fiscal 2007
and 90 percent in fiscal 2006. In fiscal 2008, 62 percent of our U.S. wholesale apparel
shipments (excluding Cole Haan, Converse, Exeter Brands Group, Hurley, NIKE Golf,
Umbro, and NIKE Bauer Hockey) were made under the futures program, compared to 65
percent in fiscal 2007 and 2006.”
Source: Nike Inc. 10-K Report 20081
Page 5 Nike Analysis Report
International Markets
Nike is an international company that earns revenue all over the world. Nike’s
international business represents strong growth prospects which should continue to be
very profitable in the future. From the 10K, “In fiscal 2008, non-U.S. sales (including
non-U.S. sales of Cole Haan, Converse, Exeter Brands Group, Hurley, NIKE Bauer
Hockey, Umbro, and NIKE Golf) accounted for 57 percent of total revenues, compared to
53 percent in fiscal 2007 and 53 percent in fiscal 2006. We sell our products to retail
accounts, through NIKE-owned retail stores, and through a mix of independent
distributors and licensees around the world. We estimate that we sell to more than 27,000
retail accounts outside the United States, excluding sales by independent distributors and
licensees. We operate 11 distribution centers outside of the United States. In many
countries and regions, including Canada, Asia, some Latin American countries, and
Europe, we have a futures ordering program for retailers similar to the United States
futures program described above. NIKE’s three largest customers outside of the U.S.
accounted for approximately 9 percent of total non-U.S. sales.”
Source: Nike Inc. 10-K Report 20081
Geographic Sales Summation
Nike’s revenue stream is globally distributed giving them solid exposure to both
developed and developing markets. Their level of exposure to the international market
gives the company a favorable position for the future as well as supporting current
earnings. Specifically, we believe that their position in the developing markets as well as
their position in China sets the company apart from their competitors. China’s market is
very lucrative because of both the size and the country’s recent progression in the sport of
basketball. Nike is one of the leading producers of high-end basketball shoes and should
greatly benefit from their exposure to China. As well, less developed markets like India,
Brazil and Africa should also generate a large amount of future profits for the company.
This is due to the fact that as the markets mature in the future, the amount of
discretionary funds per person will also increase. When the level of discretionary income
increases consumers will be more apt to purchase higher-end athletic shoes; the shoes
will most likely be produced by Nike because of their large well-known brand name.
(Note: the forecasted revenue growth broken down by region and then by product is
found in the appendix)
Page 6 Nike Analysis Report
Sector Data Nike is in the Consumer Discretionary Sector and is classified in the Consumer Durables
and Apparel subsector. Consumer Discretionary sector data is located below and the
subsector will be developed later in this section.
US Consumer Discretionary by Market Capitalization
The consumer discretionary sector is by definition products that are purchased at the
discretion of the consumer; they are not considered to be necessities. As well, it
encompasses those industries that tend to be the most sensitive to economic cycles. Its
manufacturing segment includes automotive, household durable goods, textiles & apparel
and leisure equipment. The services segment includes hotels, restaurants and other
leisure facilities, media production and services, and consumer retailing and services.
Consumer Discretionary Sector (international companies included)
Source: CapitalIQ3
Page 7 Nike Analysis Report
Subsector Data (Consumer Durables and Apparel) There are five sub-industries within the scope of consumer discretionary: Automobiles
and Components, Consumer Durables and Apparel, Consumer Services, Media and
Retailing
Competition
The main competitors of Nike Inc. that will be used in this report are UnderArmor Inc., K
Swiss Inc., Skechers USA Inc. and Adidas AG. Nike’s amounts of products are very
diverse and accordingly a diverse range of companies that have comparable aspects to
Nike have been chosen. Adidas AG is arguably Nike’s closest competitor however
company information is difficult to obtain because the company’s equity is not traded on
a US exchange. UnderArmour is mainly in the athletic apparel industry however
Skechers and KSwiss are mainly in the footwear industry. All of these industries are very
competitive with different companies constantly competing for market share both in the
US and on the international level. From the 10K , “The intense competition and the rapid
changes in technology and consumer preferences in the markets for athletic and leisure
footwear and apparel, and athletic equipment, constitute significant risk factors in our
operations. NIKE is the largest seller of athletic footwear and athletic apparel in the
world. Performance and reliability of shoes, apparel, and equipment, new product
development, price, product identity through marketing and promotion, and customer
support and service are important aspects of competition in the athletic footwear, apparel
and equipment industry. To help market our products, we contract with prominent and
influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and
Page 8 Nike Analysis Report
use our products, and we actively sponsor sporting events and clinics. We believe that we
are competitive in all of these areas.”
Market Share
Source: Wikinvest
Nike is well positioned in the global footwear market and has a solid market share in the
global athletic apparel market. As can be seen in the right graph, there is not a dominant
company in the athletic apparel market but Nike has a good market share which should
continue to grow over the years either through organic or acquisitions.
Porter’s Five
Buyer Power (Low)
ƒ Buyers in this industry are extremely fragmented.
ƒ High degree of brand equity has historically made buyers less price sensitive.
ƒ Nike owns a lot of retail stores; this lessens the power of third party retailers.
Supplier Power – (Low)
ƒ Firms typically contract manufacturers over seas. There are tons of manufacturers
competing for contracts.
– Allows firms to exhibit significant influence over suppliers.
ƒ Single suppliers don’t provide a substantial amount of product to these companies
(save UA).
ƒ Raw materials are readily available.
Threat of Entry – (Low)
ƒ High degree of brand equity and loyal customers make it hard for new firms to
gain market share.
– Highly competitive industry
ƒ Difficult for firms to obtain capital to buy fixed assets needed and establish
distribution network.
– Advertising/Marketing new products also very expensive.
Threat of Substitutes – (None)
ƒ No pure substitutes for athletic footwear and apparel.
Page 9 Nike Analysis Report
ƒ Very little threat of technological innovation producing substitutes.
Rivalry – (High)
ƒ Several dominate firms in the industry competing intensely for market share.
ƒ Swings in consumer preferences increase competition to stay on top of trends.
ƒ Very low consumer switching costs.
SWOT Analysis
Strengths
ƒ NKE has an incredibly strong global brand. This is critical especially in a
weakening global economy
– With a strong revenue stream, NKE is able to contract the most popular
athletes for endorsements
– Helps keep the margins fat
ƒ Nike has no factories so it does not tie up cash in manufacturing labor and plants
ƒ Futures ordering system allows NKE to actively manage inventory
ƒ Geographically diversified, which has helped NKE maintain strong revenues
ƒ Able to leverage high global market share to its advantage
ƒ Very strong financial position
Weaknesses
ƒ To grow in the USA in the future, NKE will need to continue to gain market
share/grow inorganically.
ƒ Very large amount of NKE revenue comes from USA footwear market (~23%)
which is highly competitive and saturated. NKE will be vulnerable if it looses
market share.
– Opportunities
ƒ Nike has exposure to emerging markets and thus fantastic growth opportunities.
ƒ Well positioned to take advantage of consumer shift to healthier lifestyles.
ƒ As the retail industry continues to falter, NKE continues to expand and gain
market share.
– NKE will be well positioned in the future
Threats
ƒ The footwear and greater retail industry has become increasingly competitive.
Nike must maintain its brand equity and continue to anticipate fashion trends.
ƒ Inventory buildup
– Inventories up 9% YOY in Q2.
ƒ Increased pressure on margins due to Nike-owned retail expansion.
ƒ Forex Translation
ƒ Continued Economic Downturn
– Delayed Purchases
– Trading down
Opportunities
ƒ Nike has exposure to emerging markets and thus fantastic growth opportunities.
ƒ Well positioned to take advantage of consumer shift to healthier lifestyles.
ƒ As the retail industry continues to falter, NKE continues to expand and gain
market share.
– NKE will be well positioned in the future
Page 10 Nike Analysis Report
Analysis: As a whole, the athletic apparel and footwear market seems very attractive.
Both suppliers and customers have relatively little power over the firms which compete
in this space; there is virtually no threat of substitutes and it would be excessively
difficult for firms to enter this industry. The one drawback is that there is intense rivalry
present. Several large firms compete intensely for market share, which is limited. This is
especially true in the United States market, which is growing at a slower rate than other
international markets. We believe Nike is uniquely suited for this competition, and has
performed well in spite of the crowded space due to several core competencies.
Core Competencies
Branding:
Nike has been extremely successful in creating a worldwide brand. This has been
accomplished via product design as well as high profile celebrity endorsements such as
LeBron James and Tiger Woods. Nike currently has over $3.5 billion slated for
endorsement contracts between 2009 and 2013, and that fails to account for future
advertising and sport sponsorships.
This branding has given Nike significant pricing control as it has created an insatiable
consumer demand for the company’s famous “swoosh”. This is displayed in the
financial condition ratios section where it can be seen that Nike’s ROE, ROA and net
income margins are well above the other comparable companies in the industry.
Supply Chain Management:
In addition to branding, Nike has one of the world’s best supply chains. Nike does not
own have any factories, allowing them to avoid tying up cash in manufacturing facilities.
There are a multitude of suppliers which compete for contracts with Nike; as a result
there is very little supplier risk for the firm.
Nike also has a phenomenally managed inventory system. Nike employs a system called
the “futures” ordering system, in which third party retailers place and pay for orders 6
months in advance. This helps Nike more actively anticipate future sales and adjust
inventory levels accordingly. In FY 2008, 86% of US footwear and 62% of US apparel
were ordered through this system.
Finally, Nike has developed multiple ways to effectively reach its end consumer. The
company operates 13 distribution facilities, 11 of which are outside of the US. This
allows for quick shipping to customers anywhere in the world. Nike operates over 500
stores worldwide, in addition to selling through third-party retailers and operating several
websites for direct selling. Nike also operates a customizable “NikeID” website to allow
customers to design Nike products to their personal tastes.
Insider-Institutional Ownership
Nike Inc.
Page 11 Nike Analysis Report
Source: CapitalIQ3
Nike is largely owned by institutions, which is a positive signal for the company because
it shows that institutional managers believe the security is a solid investment. As was
discussed in lecture, the institutional managers have most of the purchasing power in the
market and this is a good sign for the company
Recent Insider Trading
Source: CapitalIQ3
Insider activity has largely been selling in the recent past, this is because of both profit
taking when Nike’s stock was close to its high as well as the recent turmoil in the
financial markets. The most recent insider buy is a positive signal for the stock showing
that the company’s insiders feel the security is currently undervalued.
Nike vs. Comparables
Page 12 Nike Analysis Report
Adidas
Source: CapitalIQ3
Adidas common stock is not traded on an exchange in the US which makes the
company’s information harder to find. The company’s stock is mostly owned by the
public and is partially owned by institutions. There is no insider ownership which can be
viewed as a negative signal for the security.
UnderArmour
Source: CapitalIQ3
UnderArmour Inc. is a much smaller company than Nike and historically has focused on
the athletic apparel business but has recently started to market products in other areas
such as footwear. The company is mostly owned by institutions and the recent insider
activity has been mostly buying which is a positive signal.
Skechers USA
Page 13 Nike Analysis Report
Source: CapitalIQ3
Skechers is mostly owned by institutions and has a fairly substantial level of insider
ownership. Insider activity has been negligible in the recent past.
K Swiss
Source: CapitalIQ3
KSwiss stock is almost completely owned by institutions and the rest of the company’s
equity is owned by insiders. Insider activity in the recent past has not been material.
Page 14 Nike Analysis Report
The Future of the Company Analyst Earnings & Sales Estimates
Analyst forecasts for revenue in the current year and for the next year are slightly higher
than one year ago levels of revenue and are on the conservative side due to the turbulent
market environment. EPS estimates for the current quarter are 81 cents per share which
is the same estimate as the prior year. In the prior year the company exceeded these
estimates by 14 percent. Current year forecasted EPS is flat with a forecasted
improvement in the following year. Below analysts give growth forecasts for Nike, their
industry, their sector and the market overall. It is important to mention that these are just
forecasts. We disagree with the forecasts for Nike for this year because we feel with their
level of exposure they will surpass analyst expectations as they have done in the past.
Source: YahooFinance
Positive or Negative Earnings Surprises
Source: YahooFinance
Nike Inc. is predicted to remain a long term profitable company and is expected to
continue to set the bar in the several industries. Historically, the company is able to meet
its targets and beat analyst expectations. Analysts believe this high level of performance
is going to continue in the future.
Page 15 Nike Analysis Report
Expert Opinions (Forecasts)
Source: Bloomberg Terminal2
Analysts currently have given Nike a buy rating overall with a target price of $61.44. We
feel that this target price is on the conservative side because of both the qualitative and
quantitative attributes of Nike. Our target price will be discussed later in this report.
Historical Financial Analysis
Stock Price Performance (5 YR HISTORY) Nike vs. Comparable Companies
Source: CapitalIQ3
This chart depicts Nike’s stock price performance measured against the performance of
its peer group discussed earlier. The peer group consists of UnderArmor Inc., K Swiss
Inc., Skechers USA Inc. and Adidas AG. Nike’s stock price has outperformed their peers
over the past five years (aggregate) however the entire group’s prices have decreased
recently because of the current financial crisis.
Page 16 Nike Analysis Report
Nike vs. Portfolio of Comparables
Source: CapitalIQ3
This chart shows Nike’s stock performance measured against the consumer discretionary
sector as a whole. Nike’s stock has largely outperformed the consumer discretionary
sector over the past five years showing its dominance in the sector.
Source: Nike Inc. 10-K Report 20081
This chart shows Nike’s equity performance measured against the S&P 500 Index, the DJ
US Footwear Index, and the S&P Apparel, Accessories and Luxury Goods Index. Nike
has outperformed each of these indexes since May 2003. (Note: This chart’s performance
measure is not as recent as the other charts and is from May 2008)
Page 17 Nike Analysis Report
Nike vs. Market
Source: CapitalIQ3
This graph denotes Nike’s stock performance compared to the S&P 500 Index and shows
that Nike has largely outperformed the market over the past five years.
Page 18 Growth Performance Nike
Ratios
For the Fiscal Period Ending
Growth Over Prior Year
Total Revenue
Gross Profit
EBITDA
EBITA
EBIT
Earnings from Cont. Ops.
Net Income
Normalized Net Income
Diluted EPS before Extra
Accounts Receivable
Inventory
Net PP&E
Total Assets
Tangible Book Value
Common Equity
Cash from Ops.
Capital Expenditures
Levered Free Cash Flow
Unlevered Free Cash Flow
Dividend per Share
LTM
12 months
Nov-30-2008
12 months
May-31-2008
12 months
May-31-2007
12 months
May-31-2006
12 months
May-31-2005
12 months
May-31-2004
13.6%
17.3%
9.8%
9.4%
9.5%
8.0%
8.0%
6.7%
10.6%
14.1%
17.1%
13.9%
14.1%
14.2%
26.3%
26.3%
12.5%
27.7%
9.2%
8.7%
0.4%
1.1%
1.1%
7.1%
7.1%
1.4%
10.9%
8.8%
7.7%
11.1%
11.4%
11.4%
14.9%
14.9%
15.2%
17.7%
12.1%
16.4%
15.9%
18.3%
22.2%
28.1%
28.1%
28.3%
27.8%
14.5%
19.8%
24.9%
28.4%
26.1%
27.8%
99.5%
29.1%
26.8%
4.6%
8.8%
6.3%
10.3%
12.0%
14.9%
12.7%
16.4%
4.7%
2.2%
1.2%
8.3%
5.3%
14.7%
3.2%
12.2%
6.7%
9.8%
(0.4%)
11.2%
1.7%
8.9%
(0.6%)
15.9%
2.0%
8.3%
(29.0%)
31.1%
(39.3%)
(39.3%)
19.7%
2.3%
11.4%
3.1%
43.3%
(1.2%)
(1.2%)
23.2%
12.8%
11.8%
12.6%
(6.1%)
8.8%
8.8%
20.3%
12.7%
11.4%
6.2%
29.8%
14.0%
13.7%
24.2%
19.2%
18.0%
3.4%
19.7%
(3.3%)
(4.5%)
28.4%
12.4%
19.8%
64.7%
15.5%
63.1%
61.0%
37.0%
Source: CapitalIQ3
Nike’s growth performance YoY is shown for the past five fiscal years as well as the
trailing twelve months from 10/30/2008. Nike has shown healthy top line growth while
maintaining solid margins and an efficient operating environment. Gross profit as well as
EBITDA, EBIT and normalized NI have shown good growth demonstrating the earning
power of the company as well as its ability to control costs while expanding its market
share globally.
Source: CapitalIQ3
This figure denotes the same results as above however the absolute values and margins
are shown instead of just YoY growth.
Page 19 Nike Analysis Report
Nike vs. Comparables
NKE
Nike Inc.
Total Revenue
Annual Growth
EBITDA
Annual Growth
Margin
UA
Under Armour, Inc.
Total Revenue
Annual Growth
EBITDA
Annual Growth
Margin
KSW S
K-Swiss Inc.
Total Revenue
Annual Growth
EBITDA
Annual Growth
Margin
DB:ADS
Adidas AG
Total Revenue
Annual Growth
EBITDA
Annual Growth
Margin
SKX
Skechers USA Inc.
Total Revenue
Annual Growth
EBITDA
Annual Growth
Margin
2004
2005
2006
2007
2008
$12,253.1 $13,739.7 $14,954.9 $16,325.9 $18,627.0
12.1%
8.8%
9.2%
14.1%
1,863.2
2,160.2
2,401.0
2,411.4
2,746.5
15.9%
11.1%
0.4%
13.9%
15.2%
15.7%
16.1%
14.8%
14.7%
996
997
998
999
1000
2004
2005
2006
2007
2008
$205.2
$281.1
$430.7
$606.6
$725.2
37.0%
53.2%
40.8%
19.6%
28.6
42.4
66.7
100.9
98.3
48.3%
57.6%
51.2%
(2.6%)
13.9%
15.1%
15.5%
16.6%
13.6%
996
997
998
999
1000
2004
2005
2006
2007
2008
$429.2
$484.1
$508.6
$501.1
$410.4
12.8%
5.1%
(1.5%)
(18.1%)
88.9
102.9
108.8
101.4
34.7
15.7%
5.7%
(6.8%)
(65.8%)
20.7%
21.3%
21.4%
20.2%
8.4%
996
997
998
999
1000
2004
2005
2006
2007
2008
$7,931.2
$7,416.3
$8,398.4 $12,762.1 $13,034.2
(6.5%)
13.2%
52.0%
2.1%
813.2
889.8
1,056.8
1,388.3
1,446.6
9.4%
18.8%
31.4%
4.2%
10.3%
12.0%
12.6%
10.9%
11.1%
996
997
998
999
1000
2004
2005
2006
2007
2008
$920.3
$1,006.5
$1,205.4
$1,394.2
$1,440.7
9.4%
19.8%
15.7%
3.3%
70.3
99.8
129.2
130.6
75.2
42.0%
29.5%
1.0%
(42.4%)
7.6%
9.9%
10.7%
9.4%
5.2%
Source: CapitalIQ3
The companies that Nike is measured against for the purposes of this report (UnderArmor
Inc., K Swiss Inc., Skechers USA Inc. and Adidas AG) have for the most part achieved
fairly good operating results. UnderArmour’s top line growth is by far the highest
because of the company’s size and the fact that they are a relatively new company.
KSwiss, Adidas and Skechers have all had decreasing revenues in the most recent years
however Nike has maintained fairly consistent growth further proving their relative
strength in their industry.
Financial Performance Management outlines the companies past financial successes as well as their future goals
in the 10K as follows, “We strive to convert revenue growth to shareholder value by
driving operating excellence in several key areas: Making our supply chain a competitive
advantage, through operational discipline, Reducing product costs through a continued
focus on lean manufacturing and product design that strives to eliminate waste,
Improving selling and administrative expense productivity by focusing on investments
that drive economic returns in the form of incremental revenue and gross margin, and
leveraging existing infrastructure across our portfolio of brands to eliminate duplicative
costs, Improving working capital efficiency, Deploying capital effectively to create value
for our shareholders.” These goals are aimed at generating solid and consistent future
revenues in the high single digits with mid-teens EPS growth through efficient
Page 20 Nike Analysis Report
operations. The company is also aiming to maintain consistent results throughout their
diverse portfolio of companies. Nike’s management commentary is below.
“ In fiscal 2008 we met or exceeded these financial goals. Our revenues grew 14% to
$18.6 billion, net income grew 26% to $1.9 billion, and we delivered diluted earnings per
share of $3.74, a 28% increase versus fiscal 2007. We estimate that the combination of
favorable translation of foreign currency-denominated profits from international
businesses and the foreign currency losses included in other (expense) income, net
resulted in a year-over-year increase in consolidated income before income taxes of
approximately 6%. For the year, the increase in net income was higher than our rate of
revenue growth due to a reduction in our effective tax rate and improved gross margins,
partially offset by higher selling and administrative expenses as a percentage of revenue.
Fiscal 2008 results were positively affected by a reduction in our effective tax rate of 7.4
percentage points as compared to fiscal 2007, primarily as a result of the $105.4 million
one-time tax benefit received in the first quarter of fiscal 2008. Also reflected in the yearover-year effective tax rate improvement was a reduction in our ongoing effective tax
rate resulting from our profits earned outside of the United States; our effective tax rates
for these operations are generally lower than the U.S. statutory rate. Gross margins for
the year grew 110 basis points versus the prior year as inventory management and
strategic price increases were partially offset by higher product costs and increased closeout sales. The increase in selling and administrative expenses was attributable to higher
investments in growth drivers such as athlete and sport team endorsers of our products,
spending around major sporting events, key product initiatives, investments in company
owned retail and non-NIKE brand businesses as well as normal wage increases. Our
earnings per share for the year grew at a higher rate than net income given lower
outstanding shares due to repurchases made under our share repurchase program. In
addition, we increased cash flow from operations and continued to return larger amounts
of cash to shareholders through higher dividends and increased cash paid for share
repurchases. Our return on invested capital increased as compared to fiscal 2007.
Although we may not meet all of the financial goals outlined above in any particular
fiscal quarter or fiscal year, we continue to believe these are appropriate long-term
goals.”
Source: Nike Inc. 10-K Report 20081
F2Q09 Results
•
•
•
•
•
•
•
Record revenue of $4bn, up 6% YOY.
o Global footwear up 7%
o Global apparel up 6%
Futures orders up 6% in USA
Revenue in Europe up 4%
o Futures orders slightly down
Emerging markets revenue up 21%
Revenue in Asia up 17%
o Continued strong growth out of China, where revenues and futures were
up 27% and 25% respectively.
Americas revenue up 23%, futures up 26%
USA revenue down 1%, Some margin pressure to increasing input costs.
Page 21 Nike Analysis Report
Financial Ratios
Nike
Ratios
LTM
12 months
Nov-30-2008
12 months
May-31-2008
12 months
May-31-2007
12 months
May-31-2006
12 months
May-31-2005
12 months
May-31-2004
Profitability
Return on Assets %
Return on Capital %
Return on Equity %
13.0%
18.4%
23.8%
13.2%
19.0%
25.4%
13.0%
18.3%
22.4%
14.1%
19.7%
23.3%
14.2%
19.7%
23.2%
13.2%
18.6%
21.6%
Margin Analysis
Gross Margin %
SG&A Margin %
EBITDA Margin %
EBITA Margin %
EBIT Margin %
Earnings from Cont. Ops Margin %
Net Income Margin %
Net Income Avail. for Common Margin %
Normalized Net Income Margin %
Levered Free Cash Flow Margin %
Unlevered Free Cash Flow Margin %
45.7%
33.0%
14.4%
12.8%
12.7%
9.4%
9.4%
9.4%
7.9%
4.7%
4.7%
45.0%
32.0%
14.7%
13.1%
13.1%
10.1%
10.1%
10.1%
8.2%
6.6%
6.6%
43.9%
30.8%
14.8%
13.1%
13.1%
9.1%
9.1%
9.1%
8.3%
7.7%
7.7%
44.0%
29.9%
16.1%
14.2%
14.1%
9.3%
9.3%
9.3%
9.0%
7.7%
7.7%
44.5%
30.7%
15.7%
13.9%
13.8%
8.8%
8.8%
8.8%
8.5%
7.3%
7.4%
42.9%
30.2%
15.2%
13.1%
12.6%
7.7%
7.7%
7.7%
7.4%
8.5%
8.6%
1.6x
10.7x
7.3x
4.6x
1.6x
10.4x
7.0x
4.5x
1.6x
9.8x
6.7x
4.4x
1.6x
9.2x
6.4x
4.3x
1.6x
8.5x
6.3x
4.4x
1.7x
7.6x
5.8x
4.4x
For the Fiscal Period Ending
Asset Turnover
Total Asset Turnover
Fixed Asset Turnover
Accounts Receivable Turnover
Inventory Turnover
Source: CapitalIQ3
Nike, due to their solid earnings over the past five years, have generated very solid
returns as measured by ROQ, ROC and ROE. GM percentages have been well
maintained as well as SG&A costs margin. Due to solid cost management and higher
than average earnings, NI and FCF have maintained solid margins as well. TAT has
remained relatively constant and AR and INV turnover have maintained consistent results.
Nike vs. Comparables
NKE
UA
KSWS
DB:ADS
SKX
Nike Inc.
Under Armour, Inc.
K-Swiss Inc.
Adidas AG
Skechers USA Inc.
Normalized
1 Yr
Price Trailing PE Forward PE EPS Growth
$ 39.94
12.75
11.34
5.76%
$ 12.33
14.90
16.90
5.84%
$ 6.99
38.22
0.00%
$ 29.05
9.07
7.34 -4.59%
$ 5.71
6.72
4.81 -73.53%
PEG Price/Sales Price/Book
0.86
1.05
2.38
0.87
0.83
1.84
46.64
0.59
0.59
0.45
1.38
0.18
0.39
Source: CapitalIQ3
Nike’s financial ratios as compared to their main competitors (previously mentioned
companies) show how financially stable the company is. Their normalized P/E ratio is
around the middle of their peer group while their projected EPS growth is at the high end
of the relative spectrum. Their PEG is less than one which is a positive signal for the
company and their P/S and P/B are on the higher end of the group. The trailing P/E ratio
is actually lower when the amount of cash that the company has on their books is factored
in.
Page 22 Nike Analysis Report
Financial Condition Ratios
Nike vs. Comparables
NKE
UA
KSWS
DB:ADS
SKX
NKE
UA
KSWS
DB:ADS
SKX
Nike Inc.
Under Armour, Inc.
K-Swiss Inc.
Adidas AG
Skechers USA Inc.
ROA
12.97
10.95
0.41
6.90
4.25
ROE
23.78
12.50
8.56
19.03
8.55
ROC
18.41
14.32
0.47
10.59
5.43
Nike Inc.
Under Armour, Inc.
K-Swiss Inc.
Adidas AG
Skechers USA Inc.
Asset TO
1.63
1.65
0.79
1.17
1.69
Inventory TO
4.59
2.13
3.16
3.20
3.63
Receivables TO
7.34
8.30
7.61
5.36
8.41
Current
2.89
2.98
8.38
1.99
3.20
Quick
1.77
1.38
6.79
0.96
1.58
Dividend
Yield
2.5%
0.0%
2.8%
2.2%
0.0%
Payout
24%
0%
20%
16%
0%
Source: CapitalIQ3
Nike’s ROE, ROA and ROC are all higher than their peers and their current and quick
ratios are close the groups average.
Trading Multiples
Multiples Detail
For Quarter Ending
TEV/LTM Total Revenue
TEV/NTM Total Revenues
TEV/LTM EBITDA
TEV/NTM EBITDA
TEV/LTM EBIT
P/LTM EPS
P/NTM EPS
P/LTM Normalized EPS
P/BV
P/Tangible BV
TEV/LTM Unlevered FCF
Market Cap/LTM Levered FCF
Mar-05-2009
0.89x
0.90x
6.15x
5.77x
6.96x
10.69x
10.35x
12.75x
2.38x
2.73x
18.92x
21.02x
Dec-31-2008
1.16x
1.15x
8.08x
7.56x
9.13x
13.66x
13.04x
16.28x
3.04x
3.48x
-
Sep-30-2008
1.59x
1.48x
11.00x
9.95x
12.41x
18.37x
15.76x
21.57x
4.06x
4.73x
-
Jun-30-2008
1.46x
1.35x
9.84x
9.07x
11.18x
15.95x
15.21x
19.69x
3.74x
4.42x
-
Mar-31-2008
1.76x
1.58x
11.34x
10.94x
12.95x
18.82x
18.07x
22.19x
4.41x
4.73x
-
Dec-31-2007
1.71x
1.55x
11.54x
10.45x
12.94x
19.03x
17.68x
22.41x
4.27x
4.60x
-
Sep-28-2007
1.62x
1.48x
10.89x
10.28x
12.24x
17.72x
16.95x
21.08x
3.98x
4.30x
-
Jun-29-2007
1.66x
11.39x
12.74x
19.93x
21.62x
4.18x
4.53x
-
Risk Factors •
•
•
•
Continued macroeconomic downturn resulting in extensively lower consumer
spending associated with a worldwide GDP contraction
Market saturation and potential lack of room for growth Intense competition and
ability to anticipate consumer preferences and develop new products as well as
the potential lack of high quality endorsers
Seasonal nature of business and “Futures” orders accuracy and inventory levels
Financial health of our retailers, Credit Risk and Currency exchange rate
fluctuations
Page 23 Nike Analysis Report
•
•
•
•
Intellectual property rights being protected
Inherent operational risks of international business and overseas sourcing,
manufacturing, and financing as well as Global distribution facilities and their
impact on international revenue generation
Rely significantly on information technology in our supply chain as well as the
company’s reliance on technical innovation and high quality products in order to
compete
Phil Knight owns a large share of stock, the sale of which could depress market
prices of company’s equity
Nike has many risk factors that should be mentioned while conducting a thorough
company analysis. The two most material risk factors are mentioned in the Investment
Thesis section and are as well displayed in the preceding list. The continued
macroeconomic downturn is a risk that affects every business in the world because of the
downturn’s affect on the consumer however we feel that Nike is shielded from the better
part of this risk because of their efficient management, brand equity and loyal customer
base. We as well feel that the economic downturn cannot continue indefinitely and that
Nike will be able to “weather the storm” and continue to lead their industry. The other
main risk factor of potential market saturation and lack of room for growth is extremely
material and should be discussed. We feel that Nike’s growth prospects, due to their
large market share in the US as well as their high level of exposure internationally should
mitigate this risk. Below are details regarding the company’s exact figures which should
ensure their continued revenue growth and overall success.
ƒ
ƒ
ƒ
Dominate presence in many emerging economies.
– Emerging economies rev. up 21% YOY Q2.
• Argentina, Russia, China, Brazil, Mexico
Strong growth from established economies.
– Canada up 10% YOY
– Japan up 7% YOY
Market share gain in the US
– 3% gain in share Q2 YOY
These strong results position Nike to continue to grow. The other risk factors that affect
the company are mentioned after the two most important that are discussed above. These
are broad risks that affect most businesses and assert that Nike’s overall company
strength, financial position and brand equity should mitigate and control these risks.
Page 24 Nike Analysis Report
Cost of Capital, Capital Structure Analysis & Distributions Analysis of Firm’s Capital Structure Capital Structure Data
For the Fiscal Period Ending
12 months May-31-2008
Units
Total Debt
Total Common Equity
Total Preferred Equity
Total Capital
12 months May-31-2007
12 months May-31-2006
Millions
% of Total
Millions
% of Total
Millions
% of Total
625.1
7,825.3
0.3
8,450.7
7.4%
92.6%
0.0%
100.0%
541.2
7,025.4
0.3
7,566.9
7.2%
92.8%
0.0%
100.0%
709.4
6,285.2
0.3
6,994.9
10.1%
89.9%
0.0%
100.0%
Source: CapitalIQ3
Nike does not use a large amount of debt financing in their capital structure which is
extremely positive and material in the current market conditions. Nike is well positioned
to remain extremely financially healthy and stable even through the current global
economic contraction.
Ratios
LTM
12 months
Nov-30-2008
12 months
May-31-2008
12 months
May-31-2007
12 months
May-31-2006
12 months
May-31-2005
12 months
May-31-2004
2.9x
1.8x
0.5x
49.9
79.7
36.7
92.8
2.7x
1.7x
0.6x
52.0
81.5
40.4
93.1
3.1x
2.1x
0.7x
54.5
83.6
39.5
98.6
2.8x
1.8x
0.6x
56.7
84.8
36.5
105.0
3.2x
2.0x
0.8x
58.2
82.9
36.5
104.6
2.7x
1.6x
0.7x
62.8
82.7
34.7
110.8
9.8%
8.9%
5.5%
5.0%
35.8%
8.0%
7.4%
5.6%
5.2%
37.1%
7.7%
7.2%
5.8%
5.4%
34.3%
11.3%
10.1%
6.5%
5.9%
36.3%
13.5%
11.9%
12.2%
10.7%
35.8%
17.5%
14.9%
14.3%
12.1%
39.5%
EBIT / Interest Exp.
EBITDA / Interest Exp.
(EBITDA-CAPEX) / Interest Exp.
Total Debt/EBITDA
Net Debt/EBITDA
Total Debt/(EBITDA-CAPEX)
Net Debt/(EBITDA-CAPEX)
NA
NA
NA
0.3x
NM
0.3x
NM
NA
NA
NA
0.2x
NM
0.3x
NM
NA
NA
NA
0.2x
NM
0.3x
NM
NA
NA
NA
0.3x
NM
0.3x
NM
NM
NM
NM
0.4x
NM
0.4x
NM
62.0x
74.5x
65.9x
0.4x
NM
0.5x
NM
Altman Z Score
6.37
6.73
NA
NA
NA
7.46
For the Fiscal Period Ending
Short Term Liquidity
Current Ratio
Quick Ratio
Cash from Ops. to Curr. Liab.
Avg. Days Sales Out.
Avg. Days Inventory Out.
Avg. Days Payable Out.
Avg. Cash Conversion Cycle
Long Term Solvency
Total Debt/Equity
Total Debt/Capital
LT Debt/Equity
LT Debt/Capital
Total Liabilities/Total Assets
Source: CapitalIQ3
Nike is a very solvent company with low levels of debt and liabilities as compared to
equity, capital and assets. As was previously mentioned, Nike’s capital structure is very
healthy and further contributes to their financial stability and future financial outlook.
Page 25 Nike Analysis Report
Analysis of the Competitors Capital Structure NKE
UA
KSWS
DB:ADS
SKX
Total LT Debt
incl. Cap Leases
441.10
13.16
2,719.74
16.19
Nike Inc.
Under Armour, Inc.
K-Swiss Inc.
Adidas AG
Skechers USA Inc.
Total
Equity
7,825.60
331.10
384.23
3,825.86
668.69
D/E
10%
14%
2%
88%
3%
LT D/E
5%
4%
0%
88%
2%
Source: CapitalIQ3
Nike’s competitors are now heavily debt finance with the exception of Adidas who is
very heavily levered. In the current market we feel that this is a large negative signal for
Adidas. Nike is similarly positioned from a capital structure position than their
competitors however the company currently has enough cash on their balance sheet to
cover all of their debt both short term and long term.
Debt Schedule Description
Type
1.5% Japanese Yen Loan
Term Loans
Principal Due (USD)
47.4
Coupon Rate
1.500%
Maturity
Feb-14-2012
Seniority
Senior
Secured
Yes
Convertible
No
Repayment Currency
JPY
2.0% Japanese Yen Loan
Term Loans
24.4
2.000%
8-20-2001 - 2020
Senior
No
No
JPY
2.6% Japanese Yen Loan
Term Loans
54.5
2.600%
8-20-2001 - 2020
Senior
No
No
JPY
4.3% Japanese Yen Note, Payable Bonds and
June 26, 2011
Notes
99.6
4.300%
Jun-26-2011
Senior
No
No
JPY
4.7% Corporate Bond, Payable
October 1, 2013
Bonds and
Notes
50.0
4.700%
Oct-01-2013
Senior
No
No
USD
5.15% Corporate Bonds, Payable
October 15, 2015
Bonds and
Notes
104.5
5.150%
Oct-15-2015
Senior
No
No
USD
5.375% Corporate Bond, Payable
July 8, 2009
Bonds and
Notes
25.5
5.375%
Jul-08-2009
Senior
No
No
USD
5.4% Corporate Bond, Payable
August 7, 2012
Bonds and
Notes
15.4
5.400%
Aug-07-2012
Senior
No
No
USD
5.66% Corporate Bond, Payable
July 23, 2012
Bonds and
Notes
26.1
5.660%
Jul-23-2012
Senior
No
No
USD
Source: CapitalIQ3
Nike does not utilize a large amount of debt in their capital structure. The debt that the
company does possess is more than covered by the company’s cash on hand. We feel
that this is a very positive signal for the company because of the current credit markets.
Beta Source: Bloomberg
The beta for Nike as calculated with a regression analysis is 1.023. We found Nike’s beta
ranging from .76 to 1.023 and decided to take the conservative approach and are thus
using the highest beta found of 1.023.
Page 26 Nike Analysis Report
Cost of Capital WACC
CAPM
Risk Free Rate
10 yr T bill
Market Risk Premium
Beta
CAPM
Cost of Debt
Rating
Spread
Adjusted Cost of Debt
Synthetic Cost of Debt
Tax Rate
2.90%
6.630%
1.023
9.68%
A+
2.0%
6.5%
4.9%
0.34
Capital Structure Details
Debt/Cap
Equity/Cap
8.91%
91%
WACC
9.20%
The weighted average cost of capital that is calculated and used in order to discount
future cash flows to their present value is shown above. The CAPM was used with a
10yr Treasury Bill rate of four percent, a 6.63 percent calculated market risk premium
and a 1.023 beta (see beta section). The market risk premium was calculated using
Damadoran’s method of discounting the dividend growth of the S&P 500. This
calculation yielded a value of 9.68 percent and is used as Nike’s cost of equity capital.
Nike’s cost of debt, because of their A+ rating, is 6.5 percent which is combined with the
aforementioned cost of equity (based on capital structure percentages) to yield a WACC
of 9.2 percent for Nike.
Distributions (Dividends & Share Repurchases) Historical Dividends (Absolute values) Source: Nike Inc. 10-K Report 20081
Historical Growth Rates YOY Ratios
For the Fiscal Period Ending
Dividend per Share
LTM
12 months
Nov-30-2008
19.7%
12 months
May-31-2008
23.2%
12 months
May-31-2007
20.3%
12 months
May-31-2006
24.2%
12 months
May-31-2005
28.4%
12 months
May-31-2004
37.0%
Source: CapitalIQ3
Personal Forecast of Future Behavior We believe that Nike will continue to maintain a consist level of dividends regardless of
the current economic environment. The company’s payout ratio has historically ranged
Page 27 Nike Analysis Report
from 20-30 percent and we expect that this level will be consistent. The historical payout
ratios are below.
Dividends per Share
Payout Ratio %
2003
0.27
0.29
2004
0.37
0.19
2005
0.48
0.20
2006
0.59
0.21
2007
0.71
0.23
2008
0.88
0.22
We decided to keep the payout ratio at a constant of 24 percent for the purposes of
modeling the future growth and overall company health of Nike. The results are detailed
below.
2009E
1.00
0.24
Dividends per Share
Payout Ratio %
2010E
0.74
0.24
Projections
2011E
0.86
0.24
2012E
1.02
0.24
2013E
1.18
0.24
Financial Statement Forecasts Presentation of Pro Forma Financial Statements Historical Financial Statements (Note): See “Historical Financials” in Appendix for full historical financial statements.
Presentation of Projections (Note): See “Projected Financials & Valuation” in Appendix for full projected financial
statements.
Cash Flow Valuation DCF Analysis - Millions
Year
Revenue
Operating Expenses
2009E
2010E
Projections
2011E
2012E
2013E
% of REVENUE
18,691.0 19,339.2 20,546.0 21,255.9 21,681.0
16,448.0 17,018.5 17,875.0 18,067.5 17,995.2
88%
88%
87%
85%
83%
EBIT
Taxes
Net of Tax
Dep/Amort
2,242.92
762.59
1,480.32
352.33
2,320.71
789.04
1,531.67
382.64
2,670.98
908.13
1,762.85
414.83
3,188.38
1,084.05
2,104.33
448.14
Change NWC
399.74
138.54
71.68
264.51
(42.40)
CAPEX
372.09
384.96
408.92
423.01
431.45
FCF
Discount years
FCFF PV
3,685.77
1,253.16
2,432.61
482.11
1,060.83 1,390.80 1,697.08 1,864.95 2,525.66
1
2
3
4
5
971.45
1166.32
1303.26
1311.50
1626.50
Thereafter
Future Obligations
Operating Leases
Endorsement Contract
Product Purchase Obl
Other
Total
312.4
700.4
2272
250.7
3535.5
264.4
599.3
1.9
76.4
942
228.9
518.3
0
62.2
809.4
Page 28 192.1
480.3
0
55.1
727.5
163.9
407.2
0
50.7
621.8
692.3
1122
0
1.2
1815.5
Nike Analysis Report
Nike’s projected future cash flows are discounted to their present values using the
calculated WACC. It is also important to look at the future obligations of the company
and their present value as well. Nike’s future obligations concerning operating leases as
well as their endorsement contracts with athletes are combined with all other future
obligations and are then discounted back to their present value. This was done in order to
show the company’s level of future commitments in order to better inform the reader
about what can be expected in Nike’s future.
Revenue Growth
16%
14%
12%
Growth Profile
10%
8%
6%
4%
2%
0%
2004
2005
2006
2007
2008
2009E 2010E 2011E 2012E 2013E
Nike’s base case revenue projections based on our analysis are shown graphically as
compared to their past revenue growth in order to visually display the conservative
growth prospects that are used in order to value the company.
WACC
Terminal Growth Rate
Terminal Value
PV of TV
9.20%
3.0%
41,955.63
27,018.94
EV
Total Debt
33,397.97
441.00
FCFE
Shares Outstanding
32,956.97
495.6
Implied Share Price
Current Share Price
Implied ROI
$
$
66.50
43.43
53.12%
This figure displays the summation of all of the future cash flows as well as the horizon
or terminal cash flow. These cash flows are all displayed at their present values
according to the WACC. The level of debt is subtracted out in order to arrive at the total
value of the firm which is then divided by numbers of shares outstanding in order to
arrive at the intrinsic or implied value per share. This value is then compared to the
Page 29 Nike Analysis Report
current price per share in order to ascertain the level of return to be expected, with the
assumed projections, from Nike’s stock.
Cash Flow Valuation (Scenario analysis­Worst Case) Growth Profile
20%
15%
WACC
Terminal Growth Rate
Terminal Value
PV of TV
9.20%
3.0%
28,328.04
18,242.94
EV
Total Debt
23,930.03
441.00
10%
5%
0%
-5%
2004 2005 2006 2007 20082009E2010E2011E2012E2013E FCFE
-15%
-20%
23,489.03
495.6
Shares Outstanding
-10%
Implied Share Price
Current Share Price
Implied ROI
Growth Profile
-25%
$
$
47.40
43.43
9.13%
The worst case scenario that our analyst team felt could be legitimately applied to Nike’s
growth forecast is displayed on the left and the results of the DCF model are displayed on
the right. Over the next 3 years the growth rates that were applied (overall top line) are
-20%, -10%, and -5% with growth rising to 0% in the fourth year and continuing to 3%
into perpetuity. These growth rates are extremely conservative and were used to show
what the implied value per share would be assuming these very low rates. Our analyst
team does not think that it is even feasible that Nike will come anywhere close to these
projected growth levels however we included this to show a worst-case scenario. As well,
even assuming the worst case scenario the stock is still undervalued with an intrinsic
price of 47.40 USD.
Summary & Conclusions Our analyst team feels that Nike is an extremely strong and well positioned company that
is being unfairly undervalued because of the weakening global economy. We have
analyzed nearly every facet of Nike’s business and feel that the company is very well
managed with efficient operating procedures as well as having one of the most
recognizable brands on the planet and a loyal and ever-growing customer base. Nike’s
stock is a buy according to our analysis and should yield the purchaser outstanding yields
both through dividends and equity appreciation.
(Note: Please see Investment Thesis for specific growth drivers and associated risks)
Page 30 1,855.8
Revenue
Other Revenue
Total Revenue
Cost Of Goods Sold
Gross Profit
Selling General & Admin Exp.
R & D Exp.
Depreciation & Amort.
Other Operating Expense/(Income)
Other Operating Exp., Total
Operating Income
Interest Expense
Interest and Invest. Income
Net Interest Exp.
Other Non-Operating Inc. (Exp.)
EBT Excl. Unusual Items
Impairment of Goodwill
Gain (Loss) On Sale Of Assets
Other Unusual Items
EBT Incl. Unusual Items
Income Tax Expense
Earnings from Cont. Ops.
Earnings of Discontinued Ops.
Extraord. Item & Account. Change
Net Income
Pref. Dividends and Other Adj.
NI to Common Incl Extra Items
For the Fiscal Period Ending
LTM
12 months
Nov-30-2008
19,654.7
19,654.7
10,663.3
8,991.4
6,492.7
6,492.7
2,498.7
44.5
44.5
(52.0)
2,491.2
60.6
2,551.8
696.0
1,855.8
1,855.8
-
Income Statement
Page 31 1,883.4
12 months
May-31-2008
18,627.0
18,627.0
10,239.6
8,387.4
5,953.7
5,953.7
2,433.7
77.1
77.1
(68.5)
2,442.3
60.6
2,502.9
619.5
1,883.4
1,883.4
1,491.5
12 months
May-31-2007
16,325.9
16,325.9
9,165.4
7,160.5
5,028.7
5,028.7
2,131.8
67.2
67.2
(28.0)
2,171.0
14.7
14.2
2,199.9
708.4
1,491.5
1,491.5
1,392.0
12 months
May-31-2006
14,954.9
14,954.9
8,367.9
6,587.0
4,477.8
4,477.8
2,109.2
36.8
36.8
(4.4)
2,141.6
2,141.6
749.6
1,392.0
1,392.0
1,211.6
12 months
May-31-2005
13,739.7
13,739.7
7,624.3
6,115.4
4,221.7
4,221.7
1,893.7
(4.8)
(4.8)
(29.1)
1,859.8
1,859.8
648.2
1,211.6
1,211.6
-
945.6
12 months
May-31-2004
12,253.1
12,253.1
7,001.4
5,251.7
3,702.0
3,702.0
1,549.7
(25.0)
(25.0)
(74.7)
1,450.0
1,450.0
504.4
945.6
945.6
-
Nike Analysis Report
Appendix Historical Financials Source: Nike Inc. 10-K Report 20081
Currency
ASSETS
Cash And Equivalents
Short Term Investments
Total Cash & ST Investments
Accounts Receivable
Total Receivables
Inventory
Prepaid Exp.
Deferred Tax Assets, Curr.
Other Current Assets
Total Current Assets
Gross Property, Plant & Equipment
Accumulated Depreciation
Net Property, Plant & Equipment
Goodwill
Other Intangibles
Deferred Tax Assets, LT
Other Long-Term Assets
Total Assets
Balance Sheet
Balance Sheet as of:
May-31-2008
USD
2,133.9
642.2
2,776.1
2,795.3
2,795.3
2,438.4
266.7
227.2
335.6
8,839.3
4,103.0
(2,211.9)
1,891.1
448.8
743.1
520.4
12,442.7
Nov-30-2008
USD
1,721.5
1,008.0
2,729.5
2,737.2
2,737.2
2,419.1
947.9
89.7
8,923.4
4,109.4
(2,208.5)
1,900.9
376.8
650.2
783.4
12,634.7
1,856.7
990.3
2,847.0
2,494.7
2,494.7
2,121.9
253.0
219.7
140.2
8,076.5
3,619.1
(1,940.8)
1,678.3
130.8
409.9
392.8
10,688.3
May-31-2007
USD
954.2
1,348.8
2,303.0
2,382.9
2,382.9
2,076.7
177.1
203.3
203.0
7,346.0
3,408.3
(1,750.6)
1,657.7
130.8
405.5
300.4
29.2
9,869.6
Reclassified
May-31-2006
USD
1,388.1
436.6
1,824.7
2,262.1
2,262.1
1,811.1
343.0
110.2
6,351.1
3,179.2
(1,573.4)
1,605.8
135.4
406.1
295.2
8,793.6
May-31-2005
USD
828.0
400.8
1,228.8
2,120.2
2,120.2
1,650.2
364.4
165.0
5,528.6
3,183.4
(1,571.6)
1,611.8
135.4
366.3
266.6
7,908.7
Restated
May-31-2004
USD
Nike Analysis Report
Page 32 Page 33 1,287.6
1,475.7
177.7
6.3
88.0
286.2
3,321.5
441.1
854.5
4,617.1
0.3
0.3
2.8
2,497.8
5,073.3
251.4
7,825.3
7,825.6
1,124.1
941.2
316.0
32.4
117.4
558.5
3,089.6
445.5
983.1
4,518.2
0.3
0.3
2.8
2,751.9
5,108.7
252.8
8,116.2
8,116.5
12,634.7
Currency
LIABILITIES
Accounts Payable
Accrued Exp.
Short-term Borrowings
Curr. Port. of LT Debt
Curr. Income Taxes Payable
Other Current Liabilities
Total Current Liabilities
Long-Term Debt
Def. Tax Liability, Non-Curr.
Other Non-Current Liabilities
Total Liabilities
Pref. Stock, Redeemable
Total Pref. Equity
Common Stock
Additional Paid In Capital
Retained Earnings
Treasury Stock
Comprehensive Inc. and Other
Total Common Equity
Total Equity
Total Liabilities And Equity
12,442.7
May-31-2008
USD
Nov-30-2008
USD
Balance Sheet
Balance Sheet as of:
10,688.3
1,040.3
1,120.0
100.8
30.5
109.0
183.4
2,584.0
409.9
668.7
3,662.6
0.3
0.3
2.8
1,960.0
4,885.2
177.4
7,025.4
7,025.7
May-31-2007
USD
9,869.6
952.2
1,033.4
43.4
255.3
85.5
242.6
2,612.4
410.7
561.0
3,584.1
0.3
0.3
2.8
1,447.3
4,713.4
121.7
6,285.2
6,285.5
Reclassified
May-31-2006
USD
8,793.6
775.0
926.1
69.8
6.2
95.0
127.1
1,999.2
687.3
462.6
3,149.1
0.3
0.3
2.8
1,182.9
4,396.5
62.0
5,644.2
5,644.5
May-31-2005
USD
7,908.7
780.4
785.4
146.0
6.6
118.2
193.9
2,030.5
682.4
413.8
3,126.7
0.3
0.3
2.8
887.8
3,982.9
(91.8)
4,781.7
4,782.0
Restated
May-31-2004
USD
Nike Analysis Report
Nike Analysis Report
Cash Flow
For the Fiscal Period Ending
Net Income
Depreciation & Amort.
Amort. of Goodwill and Intangibles
Depreciation & Amort., Total
(Gain) Loss From Sale Of Assets
Stock-Based Compensation
Tax Benefit from Stock Options
Other Operating Activities
Change in Acc. Receivable
Change In Inventories
Change in Acc. Payable
Change in Other Net Operating Assets
Cash from Ops.
Capital Expenditure
Sale of Property, Plant, and Equipment
Cash Acquisitions
Divestitures
Invest. in Marketable & Equity Securt.
Net (Inc.) Dec. in Loans Originated/Sold
Other Investing Activities
Cash from Investing
Short Term Debt Issued
Long-Term Debt Issued
Total Debt Issued
Short Term Debt Repaid
Long-Term Debt Repaid
Total Debt Repaid
Issuance of Common Stock
Repurchase of Common Stock
Common Dividends Paid
Common and/or Pref. Dividends Paid
Total Dividends Paid
Special Dividend Paid
Other Financing Activities
Cash from Financing
Foreign Exchange Rate Adj.
Net Change in Cash
LTM
12 months
Nov-30-2008
1,855.8
321.6
8.7
330.3
(60.6)
154.0
(222.6)
(277.4)
(347.9)
98.4
94.7
1,624.7
(472.2)
15.5
(571.1)
246.0
(384.2)
147.7
(1,018.3)
210.1
(10.6)
271.3
(1,290.4)
(39.5)
(412.9)
(452.4)
55.2
(1,216.8)
(138.6)
(749.0)
12 months
May-31-2008
1,883.4
303.6
9.2
312.8
(60.6)
141.0
(291.9)
(118.3)
(249.8)
330.9
(11.2)
1,936.3
(449.2)
1.9
(571.1)
246.0
380.4
(21.8)
(413.8)
63.7
63.7
(35.2)
(35.2)
343.3
(1,248.0)
(412.9)
(412.9)
63.0
(1,226.1)
(19.2)
277.2
Page 34 12 months
May-31-2007
1,491.5
269.7
9.9
279.6
147.7
24.7
(39.6)
(49.5)
85.1
(60.8)
1,878.7
(313.5)
28.3
382.4
(4.3)
92.9
94.4
94.4
(255.7)
(255.7)
322.9
(985.2)
(343.7)
(343.7)
55.8
(1,111.5)
42.4
902.5
12 months
May-31-2006
1,392.0
282.0
9.8
291.8
11.8
54.2
(38.7)
(85.1)
(200.3)
279.4
(37.2)
1,667.9
(333.7)
1.6
(909.9)
(34.6)
(1,276.6)
(24.2)
(24.2)
225.3
(761.1)
(290.9)
(290.9)
(850.9)
25.7
(433.9)
12 months
May-31-2005
1,211.6
257.2
9.3
266.5
4.9
63.1
37.6
(93.5)
(103.3)
112.4
71.4
1,570.7
(257.1)
7.2
(47.2)
(35.3)
(28.0)
(360.4)
(90.9)
(90.9)
226.8
(556.2)
(236.7)
(236.7)
(657.0)
6.8
560.1
Restated
12 months
May-31-2004
945.6
255.2
58.3
313.5
47.2
19.0
97.1
(55.9)
255.6
(103.6)
1,518.5
(214.8)
11.6
(289.1)
(400.8)
(57.5)
(950.6)
153.8
153.8
(206.9)
(206.9)
253.6
(419.8)
(179.2)
(179.2)
(398.5)
24.6
194.0
Nike Analysis Report
Projected Financials & Valuation Revenue
Other Revenue
Total Revenue
Cost Of Goods Sold
% of REVENUE
Gross Profit
Selling General & Admin Exp.
% of REVENUE
2010E
Projections
2011E
2012E
2013E
18,690.96
18,690.96
19,339.24
19,339.24
20,545.98
20,545.98
21,255.86
21,255.86
21,680.98
21,680.98
10,653.85
11,023.36
11,711.21
11,903.28
11,924.54
57%
57%
57%
56%
55%
8,037.11
8,315.87
8,834.77
9,352.58
9,756.44
5,441.87
5,612.53
5,748.96
5,716.06
5,588.57
31%
31%
30%
29%
28%
352.33
382.64
414.83
448.14
482.11
8%
8%
8%
8%
8%
-
-
-
-
-
5,794.20
2,242.92
5,995.16
2,320.71
6,163.80
2,670.98
6,164.20
3,188.38
6,070.67
3,685.77
18.31
36.80
18.49
16.94
36.80
19.86
16.94
36.80
19.86
12.66
36.80
24.14
9.64
36.80
27.16
Currency Exchange Gains (Loss)
Other Non-Operating Inc. (Exp.)
EBT Excl. Unusual Items
2,261.41
2,340.57
2,690.84
3,212.52
3,712.93
Impairment of Goodwill
Gain (Loss) On Sale Of Assets
Other Unusual Items
EBT Incl. Unusual Items
2,261.41
2,340.57
2,690.84
3,212.52
3,712.93
775.06
802.20
922.24
R & D Exp.
Depreciation & Amort.
% of PPE
Other Operating Expense/(Income)
Other Operating Exp., Total
Operating Income
Interest Expense
Interest and Invest. Income
Net Interest Exp.
Income Tax Expense
% of EBT
1,101.04
1,272.55
34%
34%
34%
34%
34%
1,486.34
1,538.37
1,768.59
2,111.48
2,440.38
1,486.34
1,538.37
1,768.59
2,111.48
2,440.38
-
-
-
-
-
1,486.34
1,486.34
1,538.37
1,538.37
1,768.59
1,768.59
2,111.48
2,111.48
2,440.38
2,440.38
Per Share Items
Basic EPS
Basic EPS Excl. Extra Items
Weighted Avg. Basic Shares Out.
3.00
3.00
495.60
3.10
3.10
495.60
3.57
3.57
495.60
4.26
4.26
495.60
4.92
4.92
495.60
Diluted EPS
Diluted EPS Excl. Extra Items
Weighted Avg. Diluted Shares Out.
2.95
2.95
504.10
3.05
3.05
504.10
3.51
3.51
504.10
4.19
4.19
504.10
4.84
4.84
504.10
1.00
0.24
0.74
0.24
0.86
0.24
1.02
0.24
1.18
0.24
Earnings from Cont. Ops.
Earnings of Discontinued Ops.
Extraord. Item & Account. Change
Net Income
Pref. Dividends and Other Adj.
NI to Common Incl Extra Items
NI to Common Excl. Extra Items
Dividends per Share
Payout Ratio %
2009E
Page 35 Nike Analysis Report
Balance Sheet (In Millions)
ASSETS
Cash And Equivalents
Short Term Investments
% of CASH
Projections
2010E
2011E
2,133.90
2,133.90
812.33
812.33
2012E
2,133.90
812.33
2013E
2,133.90
812.33
38%
38%
38%
38%
38%
Marketable Securities
Total Cash & ST Investments
802.50
3,748.72
2,132.08
5,078.30
3,651.05
6,597.28
5,474.81
8,421.04
7,871.60
10,817.82
Accounts Receivable
2,990.55
3,094.3
3,287.36
3,400.94
3,468.96
16%
16%
16%
16%
16%
2,990.55
3,094.28
3,287.36
3,400.94
3,468.96
2,915.37
% of REVENUE
Total Receivables
Inventory
2,513.32
2,600.49
2,762.75
2,858.21
% of REVENUE
13%
13%
13%
13%
13%
Prepaid Exp.
398.65
412.48
438.22
445.41
446.20
% of COGS
Deferred Tax Assets, Curr.
4%
4%
224.29
232.07
4%
267.10
4%
318.84
% of EBIT
10%
10%
10%
10%
Other Current Assets
Total Current Assets
-
-
-
-
4%
368.58
10%
-
9,875.54
11,417.62
13,352.70
15,444.43
18,016.93
Gross Property, Plant & Equipment
Accumulated Depreciation
Net Property, Plant & Equipment
4,475.09
(2,564.23)
1,910.86
4,860.05
(2,946.87)
1,913.18
5,268.97
(3,361.70)
1,907.27
5,691.99
(3,809.84)
1,882.15
6,123.44
(4,291.94)
1,831.50
Goodwill
Other Intangibles
Deferred Tax Assets, LT
Other Long-Term Assets
Total Assets
448.80
743.10
334.13
13,312.43
448.80
743.10
334.13
14,856.84
448.80
743.10
334.13
16,786.01
448.80
743.10
334.13
18,852.61
448.80
743.10
334.13
21,374.46
1,336.11
LIABILITIES
Accounts Payable
1,151.84
1,191.80
1,266.16
1,309.91
% of REVENUE
6%
6%
6%
6%
6%
Accrued Exp.
1,300.02
1,345.11
1,429.04
1,452.48
1,455.08
% of COGS
Short-term Borrowings
Other ST Debt
Curr. Port. of LT Debt
Curr. Income Taxes Payable
% of Income Tax
Other Current Liabilities
% of REVENUE
Total Current Liabilities
Long-Term Debt
Def. Tax Liability, Non-Curr.
YOY Growth %
Other Non-Current Liabilities
Total Liabilities
Pref. Stock, Redeemable
Total Pref. Equity
Common Stock
Additional Paid In Capital
Retained Earnings
Treasury Stock
Comprehensive Inc. and Other
Total Common Equity
Total Equity
Total Liabilities And Equity
2009E
2,133.90
812.33
12%
12%
12%
12%
12%
102.18
31.30
146.22
102.18
6.30
151.34
102.18
153.40
173.99
102.18
46.30
207.72
102.18
197.50
240.08
19%
19%
19%
19%
19%
253.81
262.61
279.00
288.64
294.41
1%
1%
1%
1%
1%
2,985.38
3,059.34
3,403.78
3,407.23
3,625.35
416.10
1,094.61
409.80
1,402.19
256.40
1,796.20
210.10
2,300.92
12.60
2,947.46
28%
28%
28%
28%
28%
4,496.09
4,871.33
5,456.37
5,918.25
6,585.41
0.30
0.30
0.30
0.30
0.30
0.30
0.30
0.30
0.30
0.30
2.80
2,497.80
6,064.04
2.80
2,497.80
7,233.21
2.80
2,497.80
8,577.34
2.80
2,497.80
10,182.06
2.80
2,497.80
12,036.75
251.40
8,816.04
251.40
9,985.21
251.40
11,329.34
251.40
12,934.06
251.40
14,788.75
8,816.34
9,985.51
11,329.64
12,934.36
14,789.05
13,312.43
14,856.84
16,786.01
18,852.61
21,374.46
Page 36 Nike Analysis Report
Cash Flow Statement - In millions
Net Income
Depreciation & Amort.
Amort. of Goodwill and Intangibles
% of Depreciation
Depreciation & Amort., Total
(Gain) Loss From Sale Of Assets
2009E
2010E
Projections
2011E
2012E
2013E
1,486.34
1,538.37
1,768.59
2,111.48
2,440.38
352.33
382.64
414.83
448.14
482.11
12.15
13.19
14.30
15.45
16.62
3%
364.48
3%
395.83
3%
429.14
3%
463.59
3%
498.73
-
-
-
-
-
141.00
141.00
141.00
141.00
141.00
Tax Benefit from Stock Options
-
-
-
-
-
Other Operating Activities
-
-
-
-
-
Stock-Based Compensation
Change in Acc. Receivable
195.25
103.72
193.08
113.58
68.02
Change In Inventories
(74.92)
(87.17)
(162.27)
(95.46)
(57.16)
(135.76)
39.95
74.37
43.75
26.20
-
-
-
-
-
Cash from Ops.
1,976.40
2,131.71
2,443.91
2,777.94
3,117.16
Capital Expenditure
(372.09)
(384.96)
(408.92)
(423.01)
(431.45)
2%
2%
2%
2%
2%
-
-
-
-
-
Cash Acquisitions
-
-
-
-
-
Divestitures
-
-
-
-
-
380.40
380.40
380.40
380.40
380.40
-
-
-
-
-
Other Investing Activities
(31.78)
(31.78)
(31.78)
(31.78)
(31.78)
Cash from Investing
(23.45)
(36.32)
(60.28)
(74.38)
(82.82)
Short Term Debt Issued
-
-
-
-
-
Long-Term Debt Issued
-
-
-
-
-
Total Debt Issued
-
-
-
-
-
Change in Acc. Payable
Change in Other Net Operating Assets
% or REVENUE
Sale of Property, Plant, and Equipment
Invest. in Marketable & Equity Securt.
Net (Inc.) Dec. in Loans Originated/Sold
Short Term Debt Repaid
-
-
-
-
-
Long-Term Debt Repaid
(31.30)
(6.30)
(153.40)
(46.30)
(197.50)
Total Debt Repaid
(31.30)
(6.30)
(153.40)
(46.30)
(197.50)
Issuance of Common Stock
Repurchase of Common Stock
236.02
236.02
236.02
236.02
236.02
(500.00)
(400.00)
-
-
-
Common Dividends Paid
Common and/or Pref. Dividends Paid
(495.60)
(369.21)
(424.46)
(506.75)
(585.69)
Total Dividends Paid
(495.60)
(369.21)
(424.46)
(506.75)
(585.69)
Special Dividend Paid
-
-
-
-
-
Other Financing Activities
-
-
-
-
-
(790.88)
(375.51)
(577.86)
(553.05)
(783.19)
Cash from Financing
Foreign Exchange Rate Adj.
Net Change in Cash
-
-
-
-
-
802.50
2,132.08
3,651.05
5,474.81
7,871.60
Page 37 Nike Analysis Report
Revenue Breakdown - In millions
United States of America
Footwear
2003
2004
2005
2006
2007
2008
2009E
2010E
Projections
2011E
2012E
2013E
3019.5
3070.4
3358.2
3832.2
4067.2
4326.8
4110.5
4110.5
4316.0
4445.5
4534.4
2%
9%
14%
6%
6%
-5%
0%
5%
3%
2%
1351
1433.5
1457.7
1591.6
1716.1
1745.1
1657.8
1657.8
1707.6
1758.8
1794.0
6%
2%
9%
8%
2%
-5%
0%
3%
3%
2%
287.9
277.9
313.4
298.7
323.8
306.1
281.6
270.3
270.3
278.5
284.0
-3%
13%
-5%
8%
-5%
-8%
-4%
0%
3%
2%
4,658.4
4,781.8
5,129.3
5,722.5
6,107.1
6,378.0
6,049.9
6,038.7
6,293.9
6,482.7
6,612.4
3%
7%
12%
7%
4%
-5%
0%
4%
3%
2%
2232.2
2500
2454.3
2608
3112.6
3174.9
3333.6
3566.9
3674.0
3747.4
18%
12%
-2%
6%
19%
2%
5%
7%
3%
2%
1133.1
1333.8
1497.1
1559
1757.2
2083.5
2125.2
2231.4
2387.6
2459.3
2508.4
18%
12%
4%
13%
19%
2%
5%
7%
3%
2%
212.6
261.7
284.5
313.3
358.1
424.3
424.3
454.0
485.8
500.4
510.4
23%
9%
10%
14%
18%
0%
7%
7%
3%
2%
3,241.7
3,827.7
4,281.6
4,326.6
4,723.3
5,620.4
5,724.3
6,019.0
6,440.4
6,633.6
6,766.2
18%
12%
1%
9%
19%
2%
5%
7%
3%
2%
855.3
962.9
1044.1
1159.2
1499.5
1559.5
1637.5
1752.1
1804.6
1840.7
17%
13%
8%
11%
29%
4%
5%
7%
3%
2%
499.3
612.3
755.5
815.6
909.3
1,140.0
1185.6
1244.9
1332.0
1372.0
1399.4
23%
23%
8%
11%
25%
4%
5%
7%
3%
2%
127.1
143.2
178.9
194.1
214.9
242.2
242.2
247.0
256.9
264.6
269.9
13%
25%
8%
11%
13%
0%
2%
4%
3%
2%
1,358.8
1,610.8
1,897.3
2,053.8
2,283.4
2,881.7
2,987.3
3,129.4
3,341.0
3,441.3
3,510.1
19%
18%
8%
11%
26%
4%
5%
7%
3%
2%
408.2
478.6
635.3
679.6
792.7
832.3
874.0
935.1
963.2
982.4
21%
17%
33%
7%
17%
5%
5%
7%
3%
2%
148.1
159.5
169.1
201.8
193.9
265.4
278.7
292.6
313.1
322.5
328.9
8%
6%
19%
-4%
37%
5%
5%
7%
3%
2%
41.6
36.8
48.1
67.8
79
96
96.0
99.8
105.8
109.0
111.2
-12%
31%
41%
17%
22%
0%
4%
6%
3%
2%
527.0
604.5
695.8
904.9
952.5
1,154.1
1,207.0
1,266.4
1,354.0
1,394.7
1,422.6
15%
15%
30%
5%
21%
5%
5%
7%
3%
2%
1,428.3
1,735.7
1,947.1
2,259.6
2,592.8
2722.4
2885.8
3116.6
3303.6
3369.7
44%
22%
12%
16%
15%
5%
6%
8%
6%
2%
12,253.1
13,739.7
14,954.9
16,325.9
18,627.0
18,691.0
19,339.2
20,546.0
21,255.9
21,681.0
14%
12%
9%
9%
14%
4%
5%
6%
3%
2%
YOY Growth %
Apparel
YOY Growth %
Equiptment
YOY Growth %
Total Revenue USA
YOY Growth %
Europe, Middle East, Africa (EMEA)
Footwear
1896
YOY Growth %
Apparel
YOY Growth %
Equiptment
YOY Growth %
Total Revenue EMEA
YOY Growth %
Asia/Pacific
Footwear
732.4
YOY Growth %
Apparel
YOY Growth %
Equiptment
YOY Growth %
Total Revenue Asia
YOY Growth %
Americas
Footwear
337.3
YOY Growth %
Apparel
YOY Growth %
Equiptment
YOY Growth %
Total Revenue Americas
YOY Growth %
Other
991.1
YOY Growth %
Total Revenues
YOY Growth %
10,777.0
Page 38 Nike Analysis Report
Bibliography: All Sources and Citations Direct (In-Text) Citations:
1[
Charts, in text citations and miscellaneous information] via Nike Inc. 10K
2[Charts, historical cost of capital information, analyst forecasts, and other financial information], via Bloomberg Terminal, accessed
[March 2009].
3[Charts, market share data, historical figures, stock price performance, and other financial data], CapitalIQ, Inc., a division of
Standard & Poor’s.
4[Chart] http://www.wikinvest.com/stock/Nike_(NKE)
Page 39