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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED AUGUST 31,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT

2、OF 1934FOR THE TRANSITION PERIOD FROM TO .Commission File No.1-10635NIKE,Inc.(Exact name of Registrant as specified in its charter)Oregon93-0584541(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)One Bowerman Drive,Beaverton,Oregon 97005-6453(Address o

3、f principal executive offices and zip code)(503)671-6453(Registrants telephone number,including area code)SECURITIES REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT:Class B Common StockNKENew York Stock Exchange(Title of each class)(Trading symbol)(Name of each exchange on which registered)Indicate b

4、y check mark:YESNOwhether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing req

5、uirements for thepast 90 days.whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit s

6、uch files).whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of large accelerated filer,accelerated filer,smaller reporting company,and emerging growth company in Rule 12b-2 o

7、f the Exchange Act.Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting companyEmerging growth companyif an emerging growth company,if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards p

8、rovided pursuant to Section 13(a)of the Exchange Act.whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).As of September 30,2023,the number of shares of the Registrants Common Stock outstanding were:Class A297,897,252 Class B1,224,012,873 1,521,910,125 Table of ContentsNIK

9、E,INC.FORM 10-QTABLE OF CONTENTSPAGEPART I-FINANCIAL INFORMATION1ITEM 1.Financial Statements1Unaudited Condensed Consolidated Statements of Income1Unaudited Condensed Consolidated Statements of Comprehensive Income2Unaudited Condensed Consolidated Balance Sheets3Unaudited Condensed Consolidated Stat

10、ements of Cash Flows4Unaudited Condensed Consolidated Statements of Shareholders Equity5Notes to the Unaudited Condensed Consolidated Financial Statements6ITEM 2.Managements Discussion and Analysis of Financial Condition and Results of Operations21ITEM 3.Quantitative and Qualitative Disclosures abou

11、t Market Risk36ITEM 4.Controls and Procedures36PART II-OTHER INFORMATION38ITEM 1.Legal Proceedings38ITEM 1A.Risk Factors38ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds39ITEM 5.Other Information40ITEM 6.Exhibits41Signatures42Table of ContentsPART I-FINANCIAL INFORMATIONITEM 1.FIN

12、ANCIAL STATEMENTSNIKE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOMETHREE MONTHS ENDED AUGUST 31,(In millions,except per share data)20232022Revenues$12,939$12,687 Cost of sales7,219 7,072 Gross profit5,720 5,615 Demand creation expense1,069 943 Operating overhead expense3,047 2,977 Total

13、selling and administrative expense4,116 3,920 Interest expense(income),net(34)13 Other(income)expense,net(10)(146)Income before income taxes1,648 1,828 Income tax expense198 360 NET INCOME$1,450$1,468 Earnings per common share:Basic$0.95$0.94 Diluted$0.94$0.93 Weighted average common shares outstand

14、ing:Basic1,528.4 1,567.1 Diluted1,543.3 1,585.8 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.1Table of ContentsNIKE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMETHREE MONTHS ENDED AUGUST 31,(Dolla

15、rs in millions)20232022Net income$1,450$1,468 Other comprehensive income(loss),net of tax:Change in net foreign currency translation adjustment36(226)Change in net gains(losses)on cash flow hedges(134)555 Change in net gains(losses)on other3(11)Total other comprehensive income(loss),net of tax(95)31

16、8 TOTAL COMPREHENSIVE INCOME$1,355$1,786 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.2Table of ContentsNIKE,INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSAUGUST 31,MAY 31,(In millions)20232023ASSETSCurrent assets:Cas

17、h and equivalents$6,178$7,441 Short-term investments2,612 3,234 Accounts receivable,net4,749 4,131 Inventories8,698 8,454 Prepaid expenses and other current assets2,013 1,942 Total current assets24,250 25,202 Property,plant and equipment,net5,109 5,081 Operating lease right-of-use assets,net2,939 2,

18、923 Identifiable intangible assets,net272 274 Goodwill281 281 Deferred income taxes and other assets3,935 3,770 TOTAL ASSETS$36,786$37,531 LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt$Notes payable6 6 Accounts payable2,738 2,862 Current portion of operatin

19、g lease liabilities435 425 Accrued liabilities4,987 5,723 Income taxes payable295 240 Total current liabilities8,461 9,256 Long-term debt8,929 8,927 Operating lease liabilities2,807 2,786 Deferred income taxes and other liabilities2,618 2,558 Commitments and contingencies(Note 11)Redeemable preferre

20、d stock Shareholders equity:Common stock at stated value:Class A convertible 298 and 305 shares outstanding Class B 1,226 and 1,227 shares outstanding3 3 Capital in excess of stated value12,590 12,412 Accumulated other comprehensive income(loss)136 231 Retained earnings1,242 1,358 Total shareholders

21、 equity13,971 14,004 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY$36,786$37,531 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.3Table of ContentsNIKE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSTHREE MONTHS END

22、ED AUGUST 31,(Dollars in millions)20232022Cash provided(used)by operations:Net income$1,450$1,468 Adjustments to reconcile net income to net cash provided(used)by operations:Depreciation191 169 Deferred income taxes(68)(43)Stock-based compensation196 170 Amortization,impairment and other(5)(9)Net fo

23、reign currency adjustments(7)16 Changes in certain working capital components and other assets and liabilities:(Increase)decrease in accounts receivable(621)(415)(Increase)decrease in inventories(263)(1,363)(Increase)decrease in prepaid expenses,operating lease right-of-use assets and other current

24、and non-currentassets(225)(128)Increase(decrease)in accounts payable,accrued liabilities,operating lease liabilities and other current and non-current liabilities(714)492 Cash provided(used)by operations(66)357 Cash provided(used)by investing activities:Purchases of short-term investments(1,144)(2,4

25、69)Maturities of short-term investments778 1,432 Sales of short-term investments1,038 948 Additions to property,plant and equipment(253)(264)Other investing activities(1)139 Cash provided(used)by investing activities418(214)Cash provided(used)by financing activities:Increase(decrease)in notes payabl

26、e,net(1)Proceeds from exercise of stock options and other stock issuances99 82 Repurchase of common stock(1,133)(983)Dividends common and preferred(524)(480)Other financing activities(41)(22)Cash provided(used)by financing activities(1,599)(1,404)Effect of exchange rate changes on cash and equivalen

27、ts(16)(87)Net increase(decrease)in cash and equivalents(1,263)(1,348)Cash and equivalents,beginning of period7,441 8,574 CASH AND EQUIVALENTS,END OF PERIOD$6,178$7,226 Supplemental disclosure of cash flow information:Non-cash additions to property,plant and equipment$148$124 Dividends declared and n

28、ot paid519 482 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.4Table of ContentsNIKE,INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYCOMMON STOCKCAPITAL INEXCESSOF STATEDVALUEACCUMULATEDOTHERCOMPREHENSI

29、VEINCOME(LOSS)RETAINEDEARNINGSTOTALCLASS ACLASS B(In millions,except per share data)SHARESAMOUNTSHARESAMOUNTBalance at May 31,2023305$1,227$3$12,412$231$1,358$14,004 Stock options exercised2 106 106 Conversion to Class B Common Stock(7)7 Repurchase of Class B Common Stock(10)(85)(1,047)(1,132)Divide

30、nds on common stock($0.340 per share)and preferred stock$0.10 per share)(519)(519)Issuance of shares to employees,net of shareswithheld for employee taxes(39)(39)Stock-based compensation196 196 Net income1,450 1,450 Other comprehensive income(loss)(95)(95)Balance at August 31,2023298$1,226$3$12,590$

31、136$1,242$13,971 COMMON STOCKCAPITAL INEXCESSOF STATEDVALUEACCUMULATEDOTHERCOMPREHENSIVEINCOME(LOSS)RETAINEDEARNINGSTOTALCLASS ACLASS B(In millions,except per share data)SHARESAMOUNTSHARESAMOUNTBalance at May 31,2022305$1,266$3$11,484$318$3,476$15,281 Stock options exercised2 80 80 Repurchase of Cla

32、ss B Common Stock(9)(66)(925)(991)Dividends on common stock($0.305 per share)and preferred stock($0.10 per share)(482)(482)Issuance of shares to employees,net of shareswithheld for employee taxes(20)(2)(22)Stock-based compensation170 170 Net income1,468 1,468 Other comprehensive income(loss)318 318

33、Balance at August 31,2022305$1,259$3$11,648$636$3,535$15,822 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.5Table of ContentsNOTES TO THE UNAUDITED CONDENSED CONSOLIDATEDFINANCIAL STATEMENTSNOTE 1Summary of Significant Acco

34、unting Policies7NOTE 2Accrued Liabilities7NOTE 3Fair Value Measurements8NOTE 4Income Taxes9NOTE 5Stock-Based Compensation10NOTE 6Earnings Per Share11NOTE 7Risk Management and Derivatives11NOTE 8Accumulated Other Comprehensive Income(Loss)15NOTE 9Revenues17NOTE 10Operating Segments18NOTE 11Contingenc

35、ies206Table of ContentsNOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBASIS OF PRESENTATIONThe Unaudited Condensed Consolidated Financial Statements include the accounts of NIKE,Inc.and its subsidiaries(the Company or NIKE)and reflect all normalrecurring adjustments which are,in the opinion of man

36、agement,necessary for a fair statement of the results of operations for the interim period.The year-end CondensedConsolidated Balance Sheet data as of May 31,2023,was derived from audited financial statements,but does not include all disclosures required by accountingprinciples generally accepted in

37、 the United States of America(U.S.GAAP).The interim financial information and notes thereto should be read in conjunction with theCompanys latest Annual Report on Form 10-K for the fiscal year ended May 31,2023(the Annual Report).The results of operations for the three months ended August31,2023,are

38、 not necessarily indicative of results to be expected for the entire fiscal year.RECENTLY ADOPTED ACCOUNTING STANDARDSIn September 2022,the Financial Accounting Standards Board(the FASB)issued Accounting Standards Update 2022-04,Liabilities Supplier Finance Programs(Subtopic 405-50):Disclosure of Su

39、pplier Finance Program Obligations.The new guidance requires qualitative and quantitative disclosure sufficient to enable users of thefinancial statements to understand the nature,activity during the period,changes from period to period and potential magnitude of such programs.The amendments areeffe

40、ctive for fiscal years beginning after December 15,2022,including interim periods within those fiscal periods,except for the amendment on rollforward information,which is effective for fiscal years beginning after December 15,2023.The Company adopted the required guidance in the first quarter of fis

41、cal 2024.Certain financial institutions offer voluntary supplier finance programs facilitated through a third-party platform that provide participating suppliers the option to financevalid payment obligations from the Company.The Company is not a party to agreements negotiated between participating

42、suppliers and third-party financial institutions.The Companys obligations to its suppliers,including amounts due and payment terms,are not affected by a suppliers decision to participate in these programs and theCompany does not provide guarantees to third parties in connection with these programs.A

43、s of August 31,2023 and May 31,2023,the Company had$953 million and$834 million,respectively,of outstanding supplier obligations confirmed as valid under these programs.These amounts are included within Accounts payable on theUnaudited Condensed Consolidated Balance Sheets.NOTE 2 ACCRUED LIABILITIES

44、Accrued liabilities included the following:AUGUST 31,MAY 31,(Dollars in millions)20232023Compensation and benefits,excluding taxes$1,133$1,737 Sales-related reserves1,003 994 Dividends payable526 529 Import and logistics439 370 Endorsement compensation303 552 Other1,583 1,541TOTAL ACCRUED LIABILITIE

45、S$4,987$5,723 7Table of ContentsNOTE 3 FAIR VALUE MEASUREMENTSThe Company measures certain financial assets and liabilities at fair value on a recurring basis,including derivatives,equity securities and available-for-sale debtsecurities.For additional information about the Companys fair value polici

46、es,refer to Note 1 Summary of Significant Accounting Policies within the Annual Report.The following tables present information about the Companys financial assets measured at fair value on a recurring basis as of August 31,2023 and May 31,2023,andindicate the level in the fair value hierarchy in wh

47、ich the Company classifies the fair value measurement:AUGUST 31,2023(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTSCash$1,432$1,432$Level 1:U.S.Treasury securities2,022 4 2,018 Level 2:Commercial paper and bonds549 13 536 Money market funds4,154 4,154 Time deposit

48、s581 575 6 U.S.Agency securities52 52 Total Level 25,336 4,742 594 TOTAL$8,790$6,178$2,612 MAY 31,2023(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTSCash$1,767$1,767$Level 1:U.S.Treasury securities2,655 2,655 Level 2:Commercial paper and bonds543 15 528 Money mark

49、et funds5,157 5,157 Time deposits507 502 5 U.S.Agency securities46 46 Total Level 26,253 5,674 579 TOTAL$10,675$7,441$3,234 As of August 31,2023,the Company held$1,945 million of available-for-sale debt securities with maturity dates within one year and$667 million with maturity datesgreater than on

50、e year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets.The fair value of the Companysavailable-for-sale debt securities approximates their amortized cost.Included in Interest expense(income),net was interest income related to the Companys inv

51、estment portfolio of$99 million and$65 million for the three months endedAugust 31,2023 and 2022,respectively.8Table of ContentsThe following tables present information about the Companys derivative assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair

52、value hierarchy in which the Company classifies the fair value measurement:AUGUST 31,2023DERIVATIVE ASSETSDERIVATIVE LIABILITIES(Dollars in millions)ASSETS ATFAIR VALUEOTHERCURRENTASSETSOTHER LONG-TERM ASSETSLIABILITIESAT FAIRVALUEACCRUEDLIABILITIESOTHER LONG-TERMLIABILITIESLevel 2:Foreign exchange

53、forwards and options$491$420$71$235$177$58(1)If the foreign exchange derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets,the asset and liability positions each would have been reduced by$233million as of August 31,2023.As of that date,the Company received$7

54、million of cash collateral from counterparties related to foreign exchange derivative instruments.No amount of collateral wasposted on the derivative liability balance as of August 31,2023.MAY 31,2023DERIVATIVE ASSETSDERIVATIVE LIABILITIES(Dollars in millions)ASSETS ATFAIR VALUEOTHERCURRENTASSETSOTH

55、ER LONG-TERM ASSETSLIABILITIESAT FAIRVALUEACCRUEDLIABILITIESOTHER LONG-TERMLIABILITIESLevel 2:Foreign exchange forwards and options$557$493$64$180$128$52(1)If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets,the asset and liability positions each would h

56、ave been reduced by$178 million as of May 31,2023.As of that date,the Company received$36 million of cash collateral from counterparties related to foreign exchange derivative instruments.No amount of collateral was posted on the derivative liabilitybalance as of May 31,2023.For additional informati

57、on related to the Companys derivative financial instruments and credit risk,refer to Note 7 Risk Management and Derivatives.The carrying amounts of other current financial assets and other current financial liabilities approximate fair value.FINANCIAL ASSETS AND LIABILITIES NOT RECORDED AT FAIR VALU

58、EThe Companys Long-term debt is recorded at adjusted cost,net of unamortized premiums,discounts and debt issuance costs.The fair value of long-term debt isestimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets(Level 2).The fair value

59、 of the Companys Long-term debt,including the current portion,was approximately$7,768 million at August 31,2023 and$7,889 million at May 31,2023.The carrying amounts reflected on the Unaudited Condensed Consolidated Balance Sheets for Notes payable approximate fair value.NOTE 4 INCOME TAXESThe effec

60、tive tax rate was 12.0%and 19.7%for the three months ended August 31,2023 and 2022,respectively.The decrease in the Companys effective tax rate wasprimarily due to the impact of temporary relief provided by the Internal Revenue Service(IRS)relating to U.S.foreign tax credit regulations.On July 21,20

61、23,the IRSissued Notice 2023-55 which specifically delayed the application of certain U.S.foreign tax credit regulations that had previously limited the Companys ability to claimcredits on certain foreign taxes for the fiscal year ended May 31,2023.As a result of this new guidance,the Company recogn

62、ized a one-time tax benefit related to prioryear tax positions in the first three months of fiscal 2024.On August 16,2022,the U.S.government enacted the Inflation Reduction Act of 2022 that included,among other provisions,changes to the U.S.corporate income taxsystem,including a fifteen percent mini

63、mum tax based on adjusted financial statement income,which was effective for the Company beginning June 1,2023.Based onthe Companys current analysis of the provisions,these tax law changes are not expected to have a material impact on the Companys financial statements for fiscal2024.As of August 31,

64、2023,total gross unrecognized tax benefits,excluding related interest and penalties,were$931 million,$644 million of which would affect the Companyseffective tax rate if recognized in future periods.The majority of the total gross unrecognized tax benefits are long-term in nature and included within

65、 Deferred incometaxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.As of May 31,2023,total gross unrecognized tax benefits,excluding related interestand penalties,were$936 million.As of August 31,2023 and May 31,2023,accrued interest and penalties related(1)(1)9Table

66、of Contentsto uncertain tax positions were$274 million and$268 million,respectively,(excluding federal benefit)and included within Deferred income taxes and other liabilities on theUnaudited Condensed Consolidated Balance Sheets.The Company is subject to taxation in the U.S.,as well as various state

67、 and foreign jurisdictions.The Company is currently under audit by the U.S.IRS for fiscal years2017 through 2019.The Company has closed all U.S.federal income tax matters through fiscal 2016,with the exception of certain transfer pricing adjustments.Tax years after 2011 remain open in certain major

68、foreign jurisdictions.Although the timing of resolution of audits is not certain,the Company evaluates all domestic andforeign audit issues in the aggregate,along with the expiration of applicable statutes of limitations,and estimates that it is reasonably possible the total grossunrecognized tax be

69、nefits could decrease by up to$20 million within the next 12 months.In January 2019,the European Commission opened a formal investigation toexamine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company.The Company believes the investigation is withoutm

70、erit.If this matter is adversely resolved,the Netherlands may be required to assess additional amounts with respect to prior periods,and the Companys income taxesrelated to prior periods in the Netherlands could increase.NOTE 5 STOCK-BASED COMPENSATIONSTOCK-BASED COMPENSATIONThe NIKE,Inc.Stock Incen

71、tive Plan(the Stock Incentive Plan)provides for the issuance of up to 798 million previously unissued shares of Class B Common Stock inconnection with equity awards granted under the Stock Incentive Plan.The Stock Incentive Plan authorizes the grant of non-statutory stock options,incentive stockopti

72、ons,stock appreciation rights and stock awards,including restricted stock and restricted stock units.Restricted stock units include both time-vesting restricted stockunits(RSUs)as well as performance-based restricted stock units(PSUs).In addition to the Stock Incentive Plan,the Company gives employe

73、es the right to purchaseshares at a discount from the market price under employee stock purchase plans(ESPPs).For additional information,refer to Note 9 Common Stock and Stock-Based Compensation within the Annual Report.The following table summarizes the Companys total stock-based compensation expen

74、se recognized in Cost of sales or Operating overhead expense,as applicable:THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022Stock options$76$75 ESPPs21 15 Restricted stock and restricted stock units99 80 TOTAL STOCK-BASED COMPENSATION EXPENSE$196$170(1)Expense for stock options includes the

75、 expense associated with stock appreciation rights.Accelerated stock option expense is primarily recorded for employees meeting certain retirement eligibilityrequirements.(2)Restricted stock units include RSUs and PSUs.The income tax benefit related to stock-based compensation expense was$17 million

76、 and$20 million for the three months ended August 31,2023 and 2022,respectively,and reported within Income tax expense.STOCK OPTIONSThe weighted average fair value per share of stock options granted during the three months ended August 31,2023 and 2022,computed as of the grant date using theBlack-Sc

77、holes pricing model,was$34.79 and$32.13,respectively.The weighted average assumptions used to estimate these fair values were as follows:THREE MONTHS ENDED AUGUST 31,20232022Dividend yield1.1%0.8%Expected volatility29.2%27.0%Weighted average expected life(in years)5.85.8Risk-free interest rate4.2%2.

78、7%Expected volatilities are based on an analysis of the historical volatility of the Companys common stock,the implied volatility in market-traded options on the Companyscommon stock with a term greater than one year,as well as other factors.The weighted average expected life of stock options is bas

79、ed on an analysis of historical andexpected future exercise patterns.The interest(1)(1)(2)10Table of Contentsrate is based on the U.S.Treasury(constant maturity)risk-free rate in effect at the date of grant for periods corresponding with the expected term of the stock options.As of August 31,2023,th

80、e Company had$387 million of unrecognized compensation costs from stock options,net of estimated forfeitures,to be recognized in Cost ofsales or Operating overhead expense,as applicable,over a weighted average remaining period of 2.4 years.RESTRICTED STOCK AND RESTRICTED STOCK UNITSThe weighted aver

81、age fair value per share of restricted stock and restricted stock units granted for the three months ended August 31,2023 and 2022,computed as of thegrant date,was$106.85 and$127.16,respectively.As of August 31,2023,the Company had$676 million of unrecognized compensation costs from restricted stock

82、 and restricted stock units,net of estimated forfeitures,tobe recognized in Cost of sales or Operating overhead expense,as applicable,over a weighted average remaining period of 2.3 years.NOTE 6 EARNINGS PER SHAREThe following is a reconciliation from basic earnings per common share to diluted earni

83、ngs per common share.The computations of diluted earnings per common shareexclude restricted stock,restricted stock units and options,including shares under ESPPs,to purchase an estimated additional 33.7 million and 23.8 million shares ofcommon stock outstanding for the three months ended August 31,

84、2023 and 2022,respectively,because the awards were assumed to be anti-dilutive.THREE MONTHS ENDED AUGUST 31,(In millions,except per share data)20232022Net income available to common stockholders$1,450$1,468 Determination of shares:Weighted average common shares outstanding1,528.4 1,567.1 Assumed con

85、version of dilutive stock options and awards14.9 18.7 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING1,543.3 1,585.8 Earnings per common share:Basic$0.95$0.94 Diluted$0.94$0.93 NOTE 7 RISK MANAGEMENT AND DERIVATIVESThe Company is exposed to global market risks,including the effect of changes in f

86、oreign currency exchange rates and interest rates,and uses derivatives to managefinancial exposures that occur in the normal course of business.As of and for the three months ended August 31,2023,there have been no material changes to theCompanys hedging program or strategy from what was disclosed w

87、ithin the Annual Report.For additional information about the Companys derivatives and hedgingpolicies,refer to Note 1 Summary of Significant Accounting Policies and Note 12 Risk Management and Derivatives within the Annual Report.The majority of derivatives outstanding as of August 31,2023,are desig

88、nated as foreign currency cash flow hedges,primarily for Euro/U.S.Dollar,British Pound/Euro,Chinese Yuan/U.S.Dollar and Japanese Yen/U.S.Dollar currency pairs.All derivatives are recognized on the Unaudited Condensed Consolidated Balance Sheets at fairvalue and classified based on the instruments ma

89、turity date.The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets:11Table of Contents DERIVATIVE ASSETSBALANCE SHEET LOCATIONAUGUST 31,MAY 31,(Dollars in millions)20232023Derivatives formally designated as hedging i

90、nstruments:Foreign exchange forwards and optionsPrepaid expenses and other current assets$406$480 Foreign exchange forwards and optionsDeferred income taxes and other assets71 64 Total derivatives formally designated as hedging instruments477 544 Derivatives not designated as hedging instruments:For

91、eign exchange forwards and optionsPrepaid expenses and other current assets14 13 Total derivatives not designated as hedging instruments14 13 TOTAL DERIVATIVE ASSETS$491$557 DERIVATIVE LIABILITIESBALANCE SHEET LOCATIONAUGUST 31,MAY 31,(Dollars in millions)20232023Derivatives formally designated as h

92、edging instruments:Foreign exchange forwards and optionsAccrued liabilities$142$93 Foreign exchange forwards and optionsDeferred income taxes and other liabilities58 52 Total derivatives formally designated as hedging instruments200 145 Derivatives not designated as hedging instruments:Foreign excha

93、nge forwards and optionsAccrued liabilities35 35 Total derivatives not designated as hedging instruments35 35 TOTAL DERIVATIVE LIABILITIES$235$180 The following tables present the amounts in the Unaudited Condensed Consolidated Statements of Income in which the effects of cash flow hedges are record

94、ed and theeffects of cash flow hedge activity on these line items:THREE MONTHS ENDED AUGUST 31,20232022(Dollars in millions)TOTALAMOUNT OF GAIN(LOSS)ON CASH FLOWHEDGE ACTIVITYTOTALAMOUNT OF GAIN(LOSS)ON CASH FLOWHEDGE ACTIVITYRevenues$12,939$1$12,687$(9)Cost of sales7,219 86 7,072 109 Demand creatio

95、n expense1,069 943(1)Other(income)expense,net(10)35(146)82 Interest expense(income),net(34)(2)13(2)12Table of ContentsThe following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income:(Dollars in millions)AMOUNT OF GAIN(LOSS)RECOGNIZED IN OTHERCOMPREHENSIVE

96、 INCOME(LOSS)ON DERIVATIVESAMOUNT OF GAIN(LOSS)RECLASSIFIED FROM ACCUMULATEDOTHER COMPREHENSIVEINCOME(LOSS)INTO INCOMETHREE MONTHS ENDED AUGUST31,LOCATION OF GAIN(LOSS)RECLASSIFIED FROM ACCUMULATEDOTHER COMPREHENSIVE INCOME(LOSS)INTO INCOMETHREE MONTHS ENDEDAUGUST 31,2023202220232022Derivatives desi

97、gnated as cash flowhedges:Foreign exchange forwards and options$(18)$25 Revenues$1$(9)Foreign exchange forwards and options(2)487 Cost of sales86 109 Foreign exchange forwards and options(5)Demand creation expense(1)Foreign exchange forwards and options(10)293 Other(income)expense,net35 82 Interest

98、rate swaps Interest expense(income),net(2)(2)TOTAL DESIGNATED CASH FLOWHEDGES$(30)$800$120$179(1)For the three months ended August 31,2023 and 2022,the amounts recorded in Other(income)expense,net as a result of the discontinuance of cash flow hedges because the forecasted transactionswere no longer

99、 probable of occurring were immaterial.(2)Gains and losses associated with terminated interest rate swaps,which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income(loss),will bereleased through Interest expense(income),net over the term of the issued

100、 debt.AMOUNT OF GAIN(LOSS)RECOGNIZEDIN INCOME ON DERIVATIVESLOCATION OF GAIN(LOSS)RECOGNIZED IN INCOMEON DERIVATIVESTHREE MONTHS ENDED AUGUST31,(Dollars in millions)20232022Derivatives not designated as hedging instruments:Foreign exchange forwards and options and embedded derivatives$(27)$61 Other(

101、income)expense,netCASH FLOW HEDGESAll changes in fair value of derivatives designated as cash flow hedge instruments are recorded in Accumulated other comprehensive income(loss)until Net income isaffected by the variability of cash flows of the hedged transaction.Effective hedge results are classifi

102、ed in the Unaudited Condensed Consolidated Statements of Incomein the same manner as the underlying exposure.When it is no longer probable the forecasted hedged transaction will occur in the initially identified time period,hedgeaccounting is discontinued and the Company accounts for the associated

103、derivative as an undesignated instrument as discussed below.Additionally,the gains and lossesassociated with derivatives no longer designated as cash flow hedge instruments in Accumulated other comprehensive income(loss)are recognized immediately in Other(income)expense,net,if it is probable the for

104、ecasted hedged transaction will not occur by the end of the initially identified time period or within an additional two-monthperiod thereafter.In rare circumstances,the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecastedtransactio

105、n that are outside the control or influence of the Company.The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately$18.3 billion as of August 31,2023.Approximately$313 million of deferred net gains(net of tax)on both outstanding and matur

106、ed derivatives in Accumulated other comprehensive income(loss)as ofAugust 31,2023,are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Netincome.Actual amounts ultimately reclassified to Net income are depen

107、dent on the exchange rates in effect when derivative contracts currently outstanding mature.As ofAugust 31,2023,the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 27 months.(1)(1)(2)13Table of ContentsUNDESIGNATED DERIVATIVE

108、INSTRUMENTSThe Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities on the Unaudited CondensedConsolidated Balance Sheets.These undesignated instruments are recorded at fair value as a derivative asset or liability on the U

109、naudited Condensed ConsolidatedBalance Sheets with their corresponding change in fair value recognized in Other(income)expense,net,together with the remeasurement gain or loss from the hedgedbalance sheet position.The total notional amount of outstanding undesignated derivative instruments was$3.7 b

110、illion as of August 31,2023.CREDIT RISKThe Companys bilateral credit-related contingent features generally require the owing entity,either the Company or the derivative counterparty,to post collateral for theportion of the fair value in excess of$50 million should the fair value of outstanding deriv

111、atives per counterparty be greater than$50 million.Additionally,a certain level ofdecline in credit rating of either the Company or the counterparty could trigger collateral requirements.As of August 31,2023,the Company was in compliance with allcredit risk-related contingent features,and derivative

112、 instruments with such features were in a net asset position of approximately$256 million.Accordingly,the Companywas not required to post cash collateral as a result of these contingent features.Further,$7 million of collateral was received on the Companys derivative asset balanceas of August 31,202

113、3.The Company considers the impact of the risk of counterparty default to be immaterial.For additional information related to the Companys derivative financial instruments and collateral,refer to Note 3 Fair Value Measurements.14Table of ContentsNOTE 8 ACCUMULATED OTHER COMPREHENSIVE INCOME(LOSS)The

114、 changes in Accumulated other comprehensive income(loss),net of tax,were as follows:(Dollars in millions)FOREIGNCURRENCYTRANSLATIONADJUSTMENTCASH FLOWHEDGESNETINVESTMENTHEDGESOTHERTOTALBalance at May 31,2023$(253)$431$115$(62)$231 Other comprehensive income(loss):Other comprehensive gains(losses)bef

115、ore reclassifications36(23)13 Reclassifications to net income of previously deferred(gains)losses(111)3(108)Total other comprehensive income(loss)36(134)3(95)Balance at August 31,2023$(217)$297$115$(59)$136(1)The accumulated foreign currency translation adjustment and net investment hedge gains/loss

116、es related to an investment in a foreign subsidiary are reclassified to Net income upon sale or uponcomplete or substantially complete liquidation of the respective entity.(2)Net of tax benefit(expense)of$0 million,$7 million,$0 million,$0 million and$7 million,respectively.(3)Net of tax(benefit)exp

117、ense of$0 million,$9 million,$0 million,$(1)million and$8 million,respectively.(Dollars in millions)FOREIGNCURRENCYTRANSLATIONADJUSTMENTCASH FLOWHEDGESNETINVESTMENTHEDGESOTHERTOTALBalance at May 31,2022$(520)$779$115$(56)$318 Other comprehensive income(loss):Other comprehensive gains(losses)before r

118、eclassifications(272)716 (3)441 Reclassifications to net income of previously deferred(gains)losses46(161)(8)(123)Total other comprehensive income(loss)(226)555 (11)318 Balance at August 31,2022$(746)$1,334$115$(67)$636(1)The accumulated foreign currency translation adjustment and net investment hed

119、ge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or uponcomplete or substantially complete liquidation of the respective entity.(2)Net of tax benefit(expense)of$0 million,$(84)million,$0 million,$1 million and$(83)million,respectively.(3)Net o

120、f tax(benefit)expense of$0 million,$18 million,$0 million,$3 million and$21 million,respectively.(1)(1)(2)(3)(1)(1)(2)(3)15Table of ContentsThe following table summarizes the reclassifications from Accumulated other comprehensive income(loss)to the Unaudited Condensed Consolidated Statements ofIncom

121、e:AMOUNT OF GAIN(LOSS)RECLASSIFIED FROMACCUMULATED OTHERCOMPREHENSIVE INCOME(LOSS)INTO INCOMELOCATION OF GAIN(LOSS)RECLASSIFIED FROM ACCUMULATEDOTHER COMPREHENSIVE INCOME(LOSS)INTO INCOMETHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022Gains(losses)on foreign currency translation adjustment

122、$(46)Other(income)expense,netTotal before tax(46)Tax(expense)benefit Gain(loss)net of tax(46)Gains(losses)on cash flow hedges:Foreign exchange forwards and options1(9)RevenuesForeign exchange forwards and options86 109 Cost of salesForeign exchange forwards and options(1)Demand creation expenseForei

123、gn exchange forwards and options35 82 Other(income)expense,netInterest rate swaps(2)(2)Interest expense(income),netTotal before tax120 179 Tax(expense)benefit(9)(18)Gain(loss)net of tax111 161 Gains(losses)on other(4)11 Other(income)expense,netTotal before tax(4)11 Tax(expense)benefit1(3)Gain(loss)n

124、et of tax(3)8 Total net gain(loss)reclassified for the period$108$123 16Table of ContentsNOTE 9 REVENUESDISAGGREGATION OF REVENUESThe following tables present the Companys Revenues disaggregated by reportable operating segment,major product line and distribution channel:THREE MONTHS ENDED AUGUST 31,

125、2023(Dollars in millions)NORTHAMERICAEUROPE,MIDDLEEAST&AFRICAGREATERCHINAASIAPACIFIC&LATINAMERICAGLOBALBRANDDIVISIONSTOTALNIKEBRANDCONVERSECORPORATETOTALNIKE,INC.Revenues by:Footwear$3,733$2,260$1,287$1,141$8,421$522$8,943 Apparel1,479 1,137 401 371 3,388 20 3,408 Equipment211 213 47 60 531 11 542 O

126、ther 13 13 35(2)46 TOTAL REVENUES$5,423$3,610$1,735$1,572$13$12,353$588$(2)$12,939 Revenues by:Sales to Wholesale Customers$2,772$2,379$895$937$6,983$329$7,312 Sales through Direct to Consumer2,651 1,231 840 635 5,357 224 5,581 Other 13 13 35(2)46 TOTAL REVENUES$5,423$3,610$1,735$1,572$13$12,353$588

127、$(2)$12,939 THREE MONTHS ENDED AUGUST 31,2022(Dollars in millions)NORTHAMERICAEUROPE,MIDDLEEAST&AFRICAGREATERCHINAASIAPACIFIC&LATINAMERICAGLOBALBRANDDIVISIONSTOTALNIKEBRANDCONVERSECORPORATETOTALNIKE,INC.Revenues by:Footwear$3,805$2,012$1,233$1,064$8,114$577$8,691 Apparel1,494 1,153 374 413 3,434 20

128、3,454 Equipment211 168 49 58 486 8 494 Other 14 14 38(4)48 TOTAL REVENUES$5,510$3,333$1,656$1,535$14$12,048$643$(4)$12,687 Revenues by:Sales to Wholesale Customers$3,027$2,203$839$914$6,983$344$7,327 Sales through Direct to Consumer2,483 1,130 817 621 5,051 261 5,312 Other 14 14 38(4)48 TOTAL REVENU

129、ES$5,510$3,333$1,656$1,535$14$12,048$643$(4)$12,687 For the three months ended August 31,2023 and 2022,Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are notpart of a geographic operating segment.Converse Other revenues were primarily attributable

130、to licensing businesses.Corporate revenues primarily consisted of foreigncurrency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse,but managed throughthe Companys central foreign exchange risk management program.As of A

131、ugust 31,2023 and May 31,2023,the Company did not have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilitieson the Unaudited Condensed Consolidated Balance Sheets.17Table of ContentsNOTE 10 OPERATING SEGMENTSThe Companys operating segments are evide

132、nce of the structure of the Companys internal organization.The NIKE Brand segments are defined by geographic regionsfor operations participating in NIKE Brand sales activity.Each NIKE Brand geographic segment operates predominantly in one industry:the design,development,marketing and selling of athl

133、etic footwear,apparel andequipment.The Companys reportable operating segments for the NIKE Brand are:North America;Europe,Middle East&Africa(EMEA);Greater China;and AsiaPacific&Latin America(APLA),and include results for the NIKE and Jordan brands.The Companys NIKE Direct operations are managed with

134、in each NIKE Brand geographic operating segment.Converse is also a reportable segment for the Companyand operates in one industry:the design,marketing,licensing and selling of athletic lifestyle sneakers,apparel and accessories.Global Brand Divisions is included within the NIKE Brand for presentatio

135、n purposes to align with the way management views the Company.Global Brand Divisionsrevenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.Global Brand Divisions costs representdemand creation and operating overhead expense that inc

136、lude product creation and design expenses centrally managed for the NIKE Brand,as well as costs associatedwith NIKE Direct global digital operations and enterprise technology.Corporate consists primarily of unallocated general and administrative expenses,including expenses associated with centrally

137、managed departments;depreciation andamortization related to the Companys headquarters;unallocated insurance,benefit and compensation programs,including stock-based compensation;and certainforeign currency gains and losses,including certain hedge gains and losses.The primary financial measure used by

138、 the Company to evaluate performance of individual operating segments is earnings before interest and taxes(EBIT),whichrepresents Net income before Interest expense(income),net,and Income tax expense in the Unaudited Condensed Consolidated Statements of Income.As part of the Companys centrally manag

139、ed foreign exchange risk management program,standard foreign currency rates are assigned twice per year to each NIKEBrand entity in the Companys geographic operating segments and to Converse.These rates are set approximately nine and twelve months in advance of the futureselling seasons to which the

140、y relate(specifically,for each currency,one standard rate applies to the fall and holiday selling seasons,and one standard rate applies to thespring and summer selling seasons)based on average market spot rates in the calendar month preceding the date they are established.Inventories and Cost of sal

141、es forgeographic operating segments and Converse reflect the use of these standard rates to record non-functional currency product purchases in the entitys functionalcurrency.Differences between assigned standard foreign currency rates and actual market rates are included in Corporate,together with

142、foreign currency hedge gainsand losses generated from the Companys centrally managed foreign exchange risk management program and other conversion gains and losses.Accounts receivable,net,Inventories and Property,plant and equipment,net for operating segments are regularly reviewed by management and

143、 are therefore providedbelow.18Table of Contents THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022REVENUESNorth America$5,423$5,510 Europe,Middle East&Africa3,610 3,333 Greater China1,735 1,656 Asia Pacific&Latin America1,572 1,535 Global Brand Divisions13 14 Total NIKE Brand12,353 12,048 C

144、onverse588 643 Corporate(2)(4)TOTAL NIKE,INC.REVENUES$12,939$12,687 EARNINGS BEFORE INTEREST AND TAXESNorth America$1,434$1,377 Europe,Middle East&Africa930 975 Greater China525 541 Asia Pacific&Latin America414 500 Global Brand Divisions(1,205)(1,187)Converse167 209 Corporate(651)(574)Interest expe

145、nse(income),net(34)13 TOTAL NIKE,INC.INCOME BEFORE INCOME TAXES$1,648$1,828 AUGUST 31,MAY 31,(Dollars in millions)20232023ACCOUNTS RECEIVABLE,NETNorth America$1,932$1,653 Europe,Middle East&Africa1,562 1,197 Greater China161 162 Asia Pacific&Latin America687 700 Global Brand Divisions84 96 Total NIK

146、E Brand4,426 3,808 Converse240 235 Corporate83 88 TOTAL ACCOUNTS RECEIVABLE,NET$4,749$4,131 INVENTORIESNorth America$3,761$3,806 Europe,Middle East&Africa2,220 2,167 Greater China1,182 973 Asia Pacific&Latin America1,072 894 Global Brand Divisions222 232 Total NIKE Brand8,457 8,072 Converse300 305 C

147、orporate(59)77 TOTAL INVENTORIES$8,698$8,454(1)Inventories as of August 31,2023 and May 31,2023,were substantially all finished goods.(1)19Table of ContentsAUGUST 31,MAY 31,(Dollars in millions)20232023PROPERTY,PLANT AND EQUIPMENT,NETNorth America$792$794 Europe,Middle East&Africa1,043 1,009 Greater

148、 China276 292 Asia Pacific&Latin America275 279 Global Brand Divisions889 840 Total NIKE Brand3,275 3,214 Converse36 38 Corporate1,798 1,829 TOTAL PROPERTY,PLANT AND EQUIPMENT,NET$5,109$5,081 NOTE 11 CONTINGENCIESIn the ordinary course of business,the Company is subject to various legal proceedings,

149、claims and government investigations relating to its business,products andactions of its employees and representatives,including contractual and employment relationships,product liability,antitrust,customs,tax,intellectual property and othermatters.The outcome of these legal matters is inherently un

150、certain,and the Company cannot predict the eventual outcome of currently pending matters,the timing oftheir ultimate resolution or the eventual losses,fines,penalties or consequences relating to those matters.When a loss related to a legal proceeding or claim is probableand reasonably estimable,the

151、Company accrues its best estimate for the ultimate resolution of the matter.If one or more legal matters were to be resolved against theCompany in a reporting period for amounts above managements expectations,the Companys financial position,operating results and cash flows for that reporting periodc

152、ould be materially adversely affected.In the opinion of management,based on its current knowledge and after consultation with counsel,the Company does not believeany currently pending legal matters will have a material adverse impact on the Companys results of operations,financial position or cash f

153、lows,except as describedbelow.BELGIAN CUSTOMS CLAIMThe Company has received claims for certain years from Belgian Customs and other government authorities for alleged underpaid duties related to products importedbeginning in fiscal 2018.The Company disputes these claims and has engaged in the appell

154、ate process.The Company has issued bank guarantees in order to appealthe claims.At this time,the Company is unable to estimate the range of loss and cannot predict the final outcome as it could take several years to reach a resolution onthis matter.If this matter is ultimately resolved against the C

155、ompany,the amounts owed,including fines,penalties and other consequences relating to the matter,couldhave a material adverse effect on the Companys results of operations,financial position and cash flows.20Table of ContentsITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS

156、OF OPERATIONSOVERVIEWNIKE designs,develops,markets and sells athletic footwear,apparel,equipment,accessories and services worldwide.We are the largest seller of athletic footwear andapparel in the world.We sell our products through NIKE Direct operations,which is comprised of both NIKE-owned retail

157、stores and sales through our digital platforms(also referred to as NIKE Brand Digital),to wholesale accounts and to a mix of independent distributors,licensees and sales representatives in nearly all countriesaround the world.Our goal is to deliver value to our shareholders by building a profitable

158、global portfolio of branded footwear,apparel,equipment and accessoriesbusinesses.Our strategy is to achieve long-term revenue growth by creating innovative,must-have products,building deep personal consumer connections with ourbrands and delivering compelling consumer experiences through digital pla

159、tforms and at retail.Through the Consumer Direct Acceleration strategy,we are focused on creating the marketplace of the future with more premium,consistent and seamless consumerexperiences,leading with digital and our owned stores,as well as select wholesale partners.In addition,our product creatio

160、n and marketing organizations are aligned to aconsumer construct focused on sports dimensions through Mens,Womens and Kids,which allows us to better serve consumer needs.We continue to invest in a newEnterprise Resource Planning Platform,data and analytics,demand sensing,insight gathering and other

161、areas to create an end-to-end technology foundation,which webelieve will further accelerate our digital transformation.We believe this unified approach will accelerate growth and unlock more efficiency for our business,while drivingspeed and responsiveness as we serve consumers globally.FINANCIAL HI

162、GHLIGHTS NIKE,Inc.Revenues for the first quarter of fiscal 2024 were$12.9 billion,an increase of 2%on both a reported and currency-neutral basis,compared to the firstquarter of fiscal 2023 NIKE Direct revenues grew 6%from$5.1 billion for the first quarter of fiscal 2023 to$5.4 billion for the first

163、quarter of fiscal 2024,and represented approximately 43%of total NIKE Brand revenues for the first quarter of fiscal 2024 Gross margin for the first quarter of fiscal 2024 decreased 10 basis points to 44.2%,primarily driven by higher product costs and unfavorable changes in foreigncurrency exchange

164、rates,largely offset by strategic pricing actions Inventories as of August 31,2023,were$8.7 billion,an increase of 3%compared to May 31,2023,primarily driven by product mix and lower inventory obsolescencereserves We returned$1.7 billion to our shareholders in the first quarter of fiscal 2024 throug

165、h share repurchases and dividendsECONOMIC CONDITIONS AND MARKET DYNAMICS Consumer Spending:Our growth in Revenues for the first quarter of fiscal 2024 reflects ongoing demand for our products despite ongoing uncertainty in the globaleconomy.We will continue to closely monitor macroeconomic condition

166、s,including the potential impacts of inflation and rising interest rates on consumer behavior.Inflationary Pressures:Inflationary pressures,including higher product costs,negatively impacted gross margin for the first quarter of fiscal 2024.The strategicpricing actions we have taken more than offset

167、 the impact of these higher product costs on gross margin in the first quarter of fiscal 2024.Supply Chain Conditions:During the first quarter of fiscal 2024 and as of August 31,2023,our inventory levels were healthy as we continue to experiencenormalized inventory transit times and flow of seasonal

168、 product.Foreign Currency Impacts:As a global company with significant operations outside the United States,we are exposed to risk arising from changes in foreigncurrency exchange rates.For additional information,refer to Foreign Currency Exposures and Hedging Practices.We continue to be confident i

169、n our brand strength.We are focused on scaling a deep,diverse and distinct product portfolio as well as deepening our consumerconnections,while carefully managing the health of our most iconic product franchises.However,the operating environment could remain volatile in fiscal 2024 as the riskexists

170、 that worsening macroeconomic conditions could have a material adverse impact on our future revenue growth as well as overall profitability.21Table of ContentsUSE OF NON-GAAP FINANCIAL MEASURESThroughout this Quarterly Report on Form 10-Q,we discuss non-GAAP financial measures,which should be consid

171、ered in addition to,and not in lieu of,the financialmeasures calculated and presented in accordance with U.S.GAAP.References to these measures should not be considered in isolation or as a substitute for otherfinancial measures calculated and presented in accordance with U.S.GAAP and may not be comp

172、arable to similarly titled measures used by other companies.Management uses these non-GAAP measures when evaluating the Companys performance,including when making financial and operating decisions.Additionally,management believes these non-GAAP financial measures provide investors with additional fi

173、nancial information that should be considered when assessing ourunderlying business performance and trends.Earnings Before Interest and Taxes(EBIT):Calculated as Net income before Interest expense(income),net and Income tax expense in the Consolidated Statementsof Income.Total NIKE,Inc.EBIT for the

174、three months ended August 31,2023 and 2022 are as follows:THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022Net income$1,450$1,468 Add:Interest expense(income),net(34)13 Add:Income tax expense198 360 Earnings before interest and taxes$1,614$1,841 EBIT margin:Calculated as total NIKE,Inc.EBIT

175、 divided by total NIKE,Inc.Revenues.Our EBIT margin calculation for the three months ended August 31,2023 and2022 are as follows:THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022NumeratorEarnings before interest and taxes$1,614$1,841 DenominatorTotal NIKE,Inc.Revenues$12,939$12,687 EBIT mar

176、gin12.5%14.5%Currency-neutral revenues:Currency-neutral revenues enhance visibility to underlying business trends,excluding the impact of translation arising from foreign currencyexchange rate fluctuations.Currency-neutral revenues are calculated using actual exchange rates in use during the compara

177、tive prior year period in place of theexchange rates in use during the current period.Wholesale equivalent revenues:References to wholesale equivalent revenues are intended to provide context as to the total size of our NIKE Brand market footprint ifwe had no NIKE Direct operations.NIKE Brand wholes

178、ale equivalent revenues consist of(1)sales to external wholesale customers and(2)internal sales from ourwholesale operations to our NIKE Direct operations,which are charged at prices comparable to those charged to external wholesale customers.COMPARABLE STORE SALESComparable store sales:This key met

179、ric,which excludes NIKE Brand Digital sales,comprises revenues from NIKE-owned in-line and factory stores for which all three ofthe following requirements have been met:(1)the store has been open at least one year,(2)square footage has not changed by more than 15%within the past year and(3)the store

180、 has not been permanently repositioned within the past year.Comparable store sales includes revenues from stores that were temporarily closed during theperiod as a result of COVID-19.Comparable store sales represents a performance metric that we believe is useful information for management and inves

181、tors inunderstanding the performance of our established NIKE-owned in-line and factory stores.Management considers this metric when making financial and operatingdecisions.The method of calculating comparable store sales varies across the retail industry.As a result,our calculation of this metric ma

182、y not be comparable to similarlytitled metrics used by other companies.22Table of ContentsRESULTS OF OPERATIONSTHREE MONTHS ENDED AUGUST 31,(Dollars in millions,except per share data)20232022%CHANGERevenues$12,939$12,687 2%Cost of sales7,219 7,072 2%Gross profit5,720 5,615 2%Gross margin44.2%44.3%De

183、mand creation expense1,069 943 13%Operating overhead expense3,047 2,977 2%Total selling and administrative expense4,116 3,920 5%of revenues31.8%30.9%Interest expense(income),net(34)13 Other(income)expense,net(10)(146)Income before income taxes1,648 1,828-10%Income tax expense198 360-45%Effective tax

184、 rate12.0%19.7%NET INCOME$1,450$1,468-1%Diluted earnings per common share$0.94$0.93 1%CONSOLIDATED OPERATING RESULTSREVENUESTHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESNIKE,Inc.Revenues:NIKE Brand Revenues by:Footwear$8,421$8,114 4%4%Apparel3,388 3

185、,434-1%-1%Equipment531 486 9%9%Global Brand Divisions13 14-7%1%Total NIKE Brand Revenues12,353 12,048 3%3%Converse588 643-9%-9%Corporate(2)(4)TOTAL NIKE,INC.REVENUES$12,939$12,687 2%2%Supplemental NIKE Brand Revenues Details:NIKE Brand Revenues by:Sales to Wholesale Customers$6,983$6,983 0%1%Sales t

186、hrough NIKE Direct5,357 5,051 6%6%Global Brand Divisions13 14-7%1%TOTAL NIKE BRAND REVENUES$12,353$12,048 3%3%(1)The percent change excluding currency changes represents a non-GAAP financial measure.For additional information,see Use of Non-GAAP Financial Measures.(2)Global Brand Divisions revenues

187、include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.(3)Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Conve

188、rse,butmanaged through our central foreign exchange risk management program.(1)(2)(3)(2)23Table of ContentsFIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023 NIKE,Inc.Revenues were$12.9 billion for the first quarter of fiscal 2024,which increased 2%compared to the first quarter of

189、 fiscal 2023 on a reported and currency-neutral basis.The increase,on a currency-neutral basis,was driven by higher revenues in Europe,Middle East&Africa(EMEA)and Greater China,whichcontributed approximately 2 and 1 percentage points to NIKE,Inc.Revenues,respectively.Lower revenues in North America

190、reduced NIKE,Inc.Revenues byapproximately 1 percentage point.NIKE Brand revenues,which represented over 90%of NIKE,Inc.Revenues,increased 3%on a reported and currency-neutral basis.This increase was primarily dueto higher revenues in the Jordan Brand and Womens,partially offset by lower revenues in

191、Mens and Kids.NIKE Brand footwear revenues increased 4%on a currency-neutral basis due to higher revenues in the Jordan Brand,Womens and Mens,partially offset bylower revenues in Kids.Unit sales of footwear decreased 1%,while higher average selling price(ASP)per pair contributed approximately 5 perc

192、entagepoints of footwear revenue growth.Higher ASP per pair was primarily due to higher full-price ASP,net of discounts,on a wholesale equivalent basis,andgrowth in the size of our NIKE Direct business,partially offset by lower NIKE Direct ASP.NIKE Brand apparel revenues decreased 1%on a currency-ne

193、utral basis,primarily due to lower revenues in Mens,Womens and the Jordan Brand.Unitsales of apparel decreased 12%,while higher ASP per unit contributed approximately 11 percentage points of apparel revenue growth.Higher ASP per unitwas primarily due to higher full-price and NIKE Direct ASPs.NIKE Di

194、rect revenues increased 6%from$5.1 billion in the first quarter of fiscal 2023 to$5.4 billion in the first quarter of fiscal 2024.On a currency-neutral basis,NIKE Direct revenues increased 6%,driven by comparable store sales growth of 8%,the addition of new stores and NIKE Brand Digital sales growth

195、 of 2%.Foradditional information regarding comparable store sales,including the definition,see Comparable Store Sales.NIKE Brand Digital sales were$2.9 billion for the firstquarter of fiscal 2024 compared to$2.8 billion for the first quarter of fiscal 2023.Within NIKE Direct revenues,there were cert

196、ain reclassifications made betweenNIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation.The reclassifications did not have a material impact onour Unaudited Condensed Consolidated Financial Statements.GROSS MARGINTHREE MONTHS ENDED AUGUST 31,(D

197、ollars in millions)20232022%CHANGEGross profit$5,720$5,615 2%Gross margin44.2%44.3%(10)bpsFor the first quarter of fiscal 2024,our consolidated gross margin was 10 basis points lower than the prior year primarily due to:Higher NIKE Brand product costs,on a wholesale equivalent basis(decreasing gross

198、 margin approximately 180 basis points);Unfavorable changes in net foreign currency exchange rates,including hedges(decreasing gross margin approximately 90 basis points);and Lower off-price margin,on a wholesale equivalent basis(decreasing gross margin approximately 30 basis points).This was partia

199、lly offset by:Higher NIKE Brand full-price ASP,net of discounts,on a wholesale equivalent basis(increasing gross margin approximately 300 basis points)due primarily tostrategic pricing actions;and Higher margin in our NIKE Direct business(increasing gross margin approximately 10 basis points).24Tabl

200、e of ContentsTOTAL SELLING AND ADMINISTRATIVE EXPENSETHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGEDemand creation expense$1,069$943 13%Operating overhead expense3,047 2,977 2%Total selling and administrative expense$4,116$3,920 5%of revenues31.8%30.9%90 bps(1)Demand creation expe

201、nse consists of advertising and promotion costs,including costs of endorsement contracts,complimentary products,television,digital and print advertising and media costs,brandevents and retail brand presentation.FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023Demand creation expe

202、nse increased 13%primarily due to an increase in advertising and marketing expense.Changes in foreign currency exchange rates did not have amaterial impact on Demand creation expense.Operating overhead expense increased 2%primarily due to higher wage-related expenses and NIKE Direct variable costs,p

203、artially offset by lower technology spend.Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.OTHER(INCOME)EXPENSE,NETTHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022Other(income)expense,net$(10)$(146)Other(income)expense,net comprises fo

204、reign currency conversion gains and losses from the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments,as well as unusual or non-operating transactions that are outside the normalcourse of busine

205、ss.For the first quarter of fiscal 2024,Other(income)expense,net decreased from$146 million of other income,net,to$10 million of other income,net,in the current year,primarily due to a net unfavorable change in foreign currency conversion gains and losses,including hedges,as well as net favorable se

206、ttlements of legal matters in theprior year.We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreigncurrency-related gains and losses included in Other(income)expense,net had unfavorable impacts

207、of approximately$65 million on our Income before income taxes forthe first quarter of fiscal 2024.INCOME TAXESTHREE MONTHS ENDED AUGUST 31,20232022%CHANGEEffective tax rate12.0%19.7%(770)bpsOur effective tax rate was 12.0%for the first quarter of fiscal 2024 compared to 19.7%for the first quarter of

208、 fiscal 2023,primarily due to a one-time benefit provided bythe recent delay of the effective date of certain U.S.foreign tax credit regulations.For additional information,refer to Note 4 Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.(1)25Tab

209、le of ContentsOPERATING SEGMENTSAs discussed in Note 10 Operating Segments in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements,our operating segmentsare evidence of the structure of the Companys internal organization.The NIKE Brand segments are defined by geographi

210、c regions for operations participating in NIKEBrand sales activity.The breakdown of Revenues is as follows:THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESNorth America$5,423$5,510-2%-1%Europe,Middle East&Africa3,610 3,333 8%6%Greater China1,735 1,656

211、5%12%Asia Pacific&Latin America1,572 1,535 2%3%Global Brand Divisions13 14-7%1%TOTAL NIKE BRAND12,353 12,048 3%3%Converse588 643-9%-9%Corporate(2)(4)TOTAL NIKE,INC.REVENUES$12,939$12,687 2%2%(1)The percent change excluding currency changes represents a non-GAAP financial measure.For additional infor

212、mation,see Use of Non-GAAP Financial Measures.(2)Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.(3)Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues ge

213、nerated by entities within the NIKE Brand geographic operating segments and Converse,butmanaged through our central foreign exchange risk management program.The primary financial measure used by the Company to evaluate performance of individual operating segments is EBIT,which represents Net income

214、before Interestexpense(income),net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income.As discussed in Note 10 Operating Segments in theaccompanying Notes to the Unaudited Condensed Consolidated Financial Statements,certain corporate costs are not included in EBIT of

215、our operating segments.The breakdown of EBIT is as follows:THREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGENorth America$1,434$1,377 4%Europe,Middle East&Africa930 975-5%Greater China525 541-3%Asia Pacific&Latin America414 500-17%Global Brand Divisions(1,205)(1,187)-2%TOTAL NIKE BRA

216、ND2,098 2,206-5%Converse167 209-20%Corporate(651)(574)-13%TOTAL NIKE,INC.EARNINGS BEFORE INTEREST AND TAXES1,614 1,841-12%EBIT margin12.5%14.5%Interest expense(income),net(34)13 TOTAL NIKE,INC.INCOME BEFORE INCOME TAXES$1,648$1,828-10%(1)Total NIKE Brand EBIT,Total NIKE,Inc.EBIT and EBIT margin repr

217、esent non-GAAP financial measures.For further information,see Use of Non-GAAP Financial Measures.(1)(2)(3)(1)(1)(1)26Table of ContentsNORTH AMERICATHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues by:Footwear$3,733$3,805-2%-2%Apparel1,479 1,494-

218、1%-1%Equipment211 211 0%0%TOTAL REVENUES$5,423$5,510-2%-1%Revenues by:Sales to Wholesale Customers$2,772$3,027-8%-8%Sales through NIKE Direct2,651 2,483 7%7%TOTAL REVENUES$5,423$5,510-2%-1%EARNINGS BEFORE INTEREST AND TAXES$1,434$1,377 4%FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISC

219、AL 2023 North America revenues decreased 1%on a currency-neutral basis,due to lower revenues in Mens,Womens and Kids,largely offset by higher revenues in theJordan Brand.Wholesale revenues decreased 8%,reflecting our proactive decisions to manage inventory supply and prioritize marketplace health.NI

220、KE Directrevenues increased 7%,driven by comparable store sales growth of 6%,the addition of new stores and digital sales growth of 4%.Footwear revenues decreased 2%on a currency-neutral basis,due to lower revenues in Mens,Kids and Womens,largely offset by higher revenues in the JordanBrand.Unit sal

221、es of footwear decreased 10%,while higher ASP per pair contributed approximately 8 percentage points of footwear revenue growth.Higher ASP perpair was primarily due to higher full-price ASP and growth in NIKE Direct.Apparel revenues decreased 1%on a currency-neutral basis,primarily due to lower reve

222、nues in Womens,Mens and the Jordan Brand.Unit sales of appareldecreased 11%,while higher ASP per unit contributed 10 percentage points of apparel revenue growth.Higher ASP per unit was primarily due to higher full-price andNIKE Direct ASP.Reported EBIT increased 4%reflecting lower revenues and the f

223、ollowing:Gross margin expansion of 240 basis points primarily due to higher full-price ASP,net of discounts,largely due to strategic pricing actions and higher margin in NIKEDirect.This was partially offset by higher product costs and a lower mix of full-price sales.Selling and administrative expens

224、e increase of 4%driven by higher operating overhead expense.The increase in operating overhead expense was primarily due tohigher wage-related expenses and NIKE Direct variable costs.Demand creation expense was flat as lower advertising and marketing expense was offset by higherdigital marketing.27T

225、able of ContentsEUROPE,MIDDLE EAST&AFRICATHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues by:Footwear$2,260$2,012 12%10%Apparel1,137 1,153-1%-3%Equipment213 168 27%23%TOTAL REVENUES$3,610$3,333 8%6%Revenues by:Sales to Wholesale Customers$2,379

226、$2,203 8%7%Sales through NIKE Direct1,231 1,130 9%6%TOTAL REVENUES$3,610$3,333 8%6%EARNINGS BEFORE INTEREST AND TAXES$930$975-5%FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023 EMEA revenues increased 6%on a currency-neutral basis due to higher revenues in Mens and Womens,partia

227、lly offset by lower revenues in the Jordan Brand.NIKE Direct revenues increased 6%due to comparable store sales growth of 14%and the addition of new stores,partially offset by digital sales declines of 2%.Footwear revenues increased 10%on a currency-neutral basis,primarily due to higher revenues in

228、Mens and Womens.Unit sales of footwear increased 2%,whilehigher ASP per pair contributed approximately 8 percentage points of footwear revenue growth.Higher ASP per pair was primarily due to higher full-price and NIKEDirect ASPs.Apparel revenues decreased 3%on a currency-neutral basis due to lower r

229、evenues in Mens,the Jordan Brand and Womens.Unit sales of apparel decreased 15%,while higher ASP per unit contributed approximately 12 percentage points of apparel revenue growth.Higher ASP per unit was primarily due to higher full-price andNIKE Direct ASPs,as well as growth in NIKE Direct.Reported

230、EBIT decreased 5%reflecting higher revenues and the following:Gross margin contraction of 310 basis points primarily due to unfavorable changes in standard foreign currency exchange rates,partially offset by higher full-priceASP,net of discounts,primarily due to strategic pricing actions.Selling and

231、 administrative expense increase of 11%due to higher operating overhead and demand creation expense.Operating overhead expense increasedprimarily due to higher wage-related expenses,other administrative costs and unfavorable changes in foreign currency exchange rates.Demand creation expenseincreased

232、 primarily due to higher sports marketing expense and unfavorable changes in foreign currency exchange rates.28Table of ContentsGREATER CHINATHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues by:Footwear$1,287$1,233 4%11%Apparel401 374 7%14%Equip

233、ment47 49-4%2%TOTAL REVENUES$1,735$1,656 5%12%Revenues by:Sales to Wholesale Customers$895$839 7%14%Sales through NIKE Direct840 817 3%10%TOTAL REVENUES$1,735$1,656 5%12%EARNINGS BEFORE INTEREST AND TAXES$525$541-3%FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023 Greater China r

234、evenues increased 12%on a currency-neutral basis due to higher revenues in Womens,the Jordan Brand,Mens and Kids.NIKE Direct revenuesincreased 10%due to comparable store sales growth of 7%benefiting from improved physical retail traffic post COVID-19 related disruptions,the addition of newstores and

235、 digital sales growth of 6%.Footwear revenues increased 11%on a currency-neutral basis due to higher revenues in the Jordan Brand,Womens,Mens and Kids.Unit sales of footwearincreased 9%,while higher ASP per pair contributed approximately 2 percentage points of footwear revenue growth.Higher ASP per

236、pair was primarily due to higherfull-price ASP,partially offset by lower NIKE Direct ASP.Apparel revenues increased 14%on a currency-neutral basis,primarily due to higher revenues in Womens.Unit sales of apparel decreased 2%,while higher ASPper unit contributed approximately 16 percentage points of

237、apparel revenue growth.Higher ASP per unit was primarily due to higher NIKE Direct and full-price ASPs,as well as a higher mix of full-price sales,partially offset by lower off-price ASP.Reported EBIT decreased 3%reflecting higher revenues and the following:Gross margin contraction of approximately

238、80 basis points,primarily due to higher product costs and unfavorable changes in standard foreign currency exchangerates.This was partially offset by higher full-price ASP,net of discounts,and a higher mix of full-price sales.Selling and administrative expense increase of 6%primarily due to higher d

239、emand creation expense.Demand creation expense increased primarily due to higheradvertising and marketing expense,partially offset by favorable changes in foreign currency exchange rates.Operating overhead expense was flat as favorablechanges in foreign currency exchanges rates were offset by higher

240、 wage-related expenses and NIKE Direct variable costs.29Table of ContentsASIA PACIFIC&LATIN AMERICATHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues by:Footwear$1,141$1,064 7%7%Apparel371 413-10%-9%Equipment60 58 3%3%TOTAL REVENUES$1,572$1,535 2

241、%3%Revenues by:Sales to Wholesale Customers$937$914 3%3%Sales through NIKE Direct635 621 2%3%TOTAL REVENUES$1,572$1,535 2%3%EARNINGS BEFORE INTEREST AND TAXES$414$500-17%We completed the sale of our entity in Chile and our entities in Argentina and Uruguay to third-party distributors in the first an

242、d second quarters of fiscal 2023,respectively.The impacts from closing these transactions are included within Corporate and are not reflected in the Asia Pacific&Latin America(APLA)operating segment results.This completed the transition of our NIKE Brand businesses within our Central and South Ameri

243、ca(CASA)marketplace,which now reflects a full distributor operatingmodel.FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023 APLA revenues increased 3%on a currency-neutral basis due to higher revenues across most territories,led by Japan,Southeast Asia&India and Mexico,partiallyof

244、fset by lower revenues in CASA and Korea.Within our CASA territory,the transition of our Chile,Argentina and Uruguay entities to a third-party distributor operatingmodel reduced APLA revenue growth by approximately 3 percentage points.Revenues increased due to overall growth in Womens,the Jordan Bra

245、nd and Kids.NIKE Direct revenues increased 3%,driven by comparable store sales growth of 12%and the addition of new stores,partially offset by digital sales declines of 3%.Footwear revenues increased 7%on a currency-neutral basis due to higher revenues in Mens,Womens,the Jordan Brand and Kids.Unit s

246、ales of footwearincreased 7%and ASP per pair was slightly up,as higher full-price ASP was largely offset by lower NIKE Direct ASP.Apparel revenues decreased 9%on a currency-neutral basis,primarily due to lower revenues in Mens and Womens.Unit sales of apparel decreased 17%,whilehigher ASP per unit c

247、ontributed approximately 8 percentage points of apparel revenue growth.Higher ASP per unit was primarily due to higher full-price ASP,growthin NIKE Direct and higher off-price ASP.Reported EBIT decreased 17%reflecting higher revenues and the following:Gross margin contraction of approximately 410 ba

248、sis points primarily due to higher product costs,as well as unfavorable changes in standard foreign currencyexchange rates and lower margin in NIKE Direct.This was partially offset by higher full-price ASP,net of discounts.Selling and administrative expense increase of 14%due to higher demand creati

249、on and operating overhead expense.Demand creation expense increased primarilydue to higher advertising and marketing expense as well as higher digital marketing expense.Operating overhead expense increased primarily due to higher wage-related expenses.30Table of ContentsGLOBAL BRAND DIVISIONSTHREE M

250、ONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues$13$14-7%1%Earnings(Loss)Before Interest and Taxes$(1,205)$(1,187)-2%Global Brand Divisions primarily represent demand creation and operating overhead expense,including product creation and design expens

251、es that are centrally managedfor the NIKE Brand,as well as costs associated with NIKE Direct global digital operations and enterprise technology.Global Brand Divisions revenues include NIKE Brandlicensing and other miscellaneous revenues that are not part of a geographic operating segment.FIRST QUAR

252、TER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023Global Brand Divisions loss before interest and taxes increased 2%primarily due to higher demand creation partially offset by lower operating overhead expense.Higherdemand creation expense was primarily due to higher advertising and marketin

253、g expense.Lower operating overhead expense was primarily due to lower technologyspend.CONVERSETHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE%CHANGEEXCLUDINGCURRENCYCHANGESRevenues by:Footwear$522$577-10%-10%Apparel20 20 0%1%Equipment11 8 38%32%Other35 38-8%-8%TOTAL REVENUES$588$64

254、3-9%-9%Revenues by:Sales to Wholesale Customers$329$344-4%-5%Sales through Direct to Consumer224 261-14%-14%Other35 38-8%-8%TOTAL REVENUES$588$643-9%-9%EARNINGS BEFORE INTEREST AND TAXES$167$209-20%(1)Other revenues consist of territories serviced by third-party licensees who pay royalties to Conver

255、se for the use of its registered trademarks and other intellectual property rights.We do not own theConverse trademarks in Japan and accordingly do not earn revenues in Japan.FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023 Converse revenues decreased 9%on a currency-neutral bas

256、is as revenue declines in North America were partially offset by an increase in Asia.Combined unit saleswithin the wholesale and direct to consumer channels decreased 6%and ASP decreased 3%,reflecting promotional activity in digital.Direct to consumer revenues decreased 14%on a currency-neutral basi

257、s due to reduced traffic in North America and Western Europe.Wholesale revenues decreased 5%on a currency-neutral basis,as declines in North America were partially offset by growth in Western Europe due to supply chainnormalization.Reported EBIT decreased 20%reflecting lower revenues and the followi

258、ng:Gross margin contraction of approximately 200 basis points due to promotional activity and unfavorable changes in standard foreign currency exchange rates.Selling and administrative expense was flat as lower operating overhead was offset by higher demand creation expense.Operating overhead expens

259、e decreasedprimarily as a result of lower professional service and administrative costs.Demand creation expense increased as a result of higher advertising and marketing aswell as brand event expenses.(1)(1)31Table of ContentsCORPORATETHREE MONTHS ENDED AUGUST 31,(Dollars in millions)20232022%CHANGE

260、Revenues$(2)$(4)Earnings(Loss)Before Interest and Taxes$(651)$(574)-13%Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operatingsegments and Converse,but managed through our central foreign exc

261、hange risk management program.The Corporate loss before interest and taxes primarily consists of unallocated general and administrative expenses,including expenses associated with centrallymanaged departments;depreciation and amortization related to our corporate headquarters;unallocated insurance,b

262、enefit and compensation programs,including stock-based compensation;and certain foreign currency gains and losses.In addition to the foreign currency gains and losses recognized in Corporate revenues,foreign currency results in Corporate include gains and losses resulting from thedifference between

263、actual foreign currency exchange rates and standard rates used to record non-functional currency denominated product purchases within the NIKEBrand geographic operating segments and Converse;related foreign currency hedge results;conversion gains and losses arising from remeasurement of monetaryasse

264、ts and liabilities in non-functional currencies;and certain other foreign currency derivative instruments.FIRST QUARTER OF FISCAL 2024 COMPARED TO FIRST QUARTER OF FISCAL 2023Corporates loss before interest and taxes increased$77 million for the first quarter of fiscal 2024,primarily due to the foll

265、owing:an unfavorable change of$117 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impactof certain foreign currency derivative instruments,as well as net favorable settlements of legal matters in the prior year,reported as a c

266、omponent of consolidatedOther(income)expense,net;an unfavorable change of$59 million primarily related to increased wage-related expenses and other professional services,reported as a component ofconsolidated Operating overhead expense;anda favorable change of$105 million related to the difference b

267、etween actual foreign currency exchange rates and standard foreign currency exchange ratesassigned to the NIKE Brand geographic operating segments and Converse,net of hedge gains and losses;these results are reported as a component ofconsolidated gross margin.FOREIGN CURRENCY EXPOSURES AND HEDGING P

268、RACTICESOVERVIEWAs a global company with significant operations outside the United States,in the normal course of business we are exposed to risk arising from changes in currencyexchange rates.Our primary foreign currency exposures arise from the recording of transactions denominated in non-function

269、al currencies and the translation of foreigncurrency denominated results of operations,financial position and cash flows into U.S.Dollars.Our foreign exchange risk management program is intended to lessen both the positive and negative effects of currency fluctuations on our consolidated results ofo

270、perations,financial position and cash flows.We manage global foreign exchange risk centrally on a portfolio basis to address those risks material to NIKE,Inc.Ourhedging policy is designed to partially or entirely offset the impact of exchange rate changes on the underlying net exposures being hedged

271、.Where exposures arehedged,our program has the effect of delaying the impact of exchange rate movements on our Unaudited Condensed Consolidated Financial Statements;the length ofthe delay is dependent upon hedge horizons.We do not hold or issue derivative instruments for trading or speculative purpo

272、ses.As of and for the three months endedAugust 31,2023,there have been no material changes to the Companys hedging program or strategy from what was disclosed within the Annual Report on Form 10-Kfor the fiscal year ended May 31,2023(the Annual Report)Refer to Note 3 Fair Value Measurements and Note

273、 7 Risk Management and Derivatives in the accompanying Notes to the Unaudited Condensed ConsolidatedFinancial Statements for additional description of outstanding derivatives at each reported period end.For additional information about our Foreign Currency Exposuresand Hedging Practices,refer to Par

274、t II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations within the Annual Report.32Table of ContentsTRANSACTIONAL EXPOSURESWe conduct business in various currencies and have transactions which subject us to foreign currency risk.Our most significant transacti

275、onal foreign currency exposuresare:Product Costs Product purchases denominated in currencies other than the functional currency of the transacting entity and factory input costs from theforeign currency adjustments program with certain factories.Non-Functional Currency Denominated External Sales A p

276、ortion of our NIKE Brand and Converse revenues associated with European operations are earnedin currencies other than the Euro(e.g.,the British Pound)but are recognized at a subsidiary that uses the Euro as its functional currency.These sales generatea foreign currency exposure.Other Costs Non-funct

277、ional currency denominated costs,such as endorsement contracts,also generate foreign currency risk,though to a lesser extent.Non-Functional Currency Denominated Monetary Assets and Liabilities Our global subsidiaries have various monetary assets and liabilities,primarilyreceivables and payables,incl

278、uding intercompany receivables and payables,denominated in currencies other than their functional currencies.These balancesheet items are subject to remeasurement which may create fluctuations in Other(income)expense,net within our consolidated results of operations.MANAGING TRANSACTIONAL EXPOSUREST

279、ransactional exposures are managed on a portfolio basis within our foreign currency risk management program.We manage these exposures by taking advantage ofnatural offsets and currency correlations that exist within the portfolio and may also elect to use currency forward and option contracts to hed

280、ge the remaining effect ofexchange rate fluctuations on probable forecasted future cash flows,including certain product cost exposures,non-functional currency denominated external sales andother costs described above.Generally,these are accounted for as cash flow hedges.Certain currency forward cont

281、racts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject toremeasurement are not formally designated as hedging instruments.Accordingly,changes in fair value of these instruments are recognized in Other(income)expense,net and a

282、re intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged.TRANSLATIONAL EXPOSURESMany of our foreign subsidiaries operate in functional currencies other than the U.S.Dollar.Fluctuations in currency exchan

283、ge rates create volatility in our reported resultsas we are required to translate the balance sheets,operational results and cash flows of these subsidiaries into U.S.Dollars for consolidated reporting.The translation offoreign subsidiaries non-U.S.Dollar denominated balance sheets into U.S.Dollars

284、for consolidated reporting results in a cumulative translation adjustment toAccumulated other comprehensive income(loss)within Shareholders equity.The impact of foreign exchange rate fluctuations on the translation of our consolidatedRevenues was a detriment of approximately$57 million and$823 milli

285、on for the three months ended August 31,2023 and 2022,respectively.The impact of foreignexchange rate fluctuations on the translation of our Income before income taxes was a detriment of approximately$2 million and$253 million for the three months endedAugust 31,2023 and 2022,respectively.MANAGING T

286、RANSLATIONAL EXPOSURESTo minimize the impact of translating foreign currency denominated revenues and expenses into U.S.Dollars for consolidated reporting,certain foreign subsidiaries useexcess cash to purchase U.S.Dollar denominated available-for-sale investments.The variable future cash flows asso

287、ciated with the purchase and subsequent sale ofthese U.S.Dollar denominated investments at non-U.S.Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accountingunder U.S.GAAP.We utilize forward contracts and/or options to mitigate the variability of

288、the forecasted future purchases and sales of these U.S.Dollar investments.Thecombination of the purchase and sale of the U.S.Dollar investment and the hedging instrument has the effect of partially offsetting the year-over-year foreign currencytranslation impact on net earnings in the period the inv

289、estments are sold.Hedges of the purchase of U.S.Dollar denominated available-for-sale investments areaccounted for as cash flow hedges.We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currenc

290、yrelated gains and losses included in Other(income)expense,net had an unfavorable impact of approximately$65 million and$234 million in our Income before incometaxes for the three months ended August 31,2023 and 2022,respectively.33Table of ContentsLIQUIDITY AND CAPITAL RESOURCESCASH FLOW ACTIVITYCa

291、sh provided(used)by operations was an outflow of$66 million for the first three months of fiscal 2024,compared to an inflow of$357 million for the first three monthsof fiscal 2023.Net income,adjusted for non-cash items,generated$1,757 million of operating cash inflow for the first three months of fi

292、scal 2024,compared to$1,771million for the first three months of fiscal 2023.The net change in working capital and other assets and liabilities resulted in a decrease to Cash provided(used)byoperations of$1,823 million for the first three months of fiscal 2024 compared to a decrease of$1,414 million

293、 for the first three months of fiscal 2023.The net change inworking capital was primarily impacted by unfavorable changes in Accrued liabilities,primarily due to net unfavorable changes in cash collateral with derivativecounterparties as a result of hedging transactions.The net change in working cap

294、ital was also impacted by favorable changes to Inventories due to improved lead timesand flow of seasonal product in the current period.Further impacting the net change in working capital was an unfavorable change in Accounts receivable,in part due tothe timing of wholesale shipments in the current

295、period.Cash provided(used)by investing activities was an inflow of$418 million for the first three months of fiscal 2024,compared to an outflow of$214 million for the first threemonths of fiscal 2023,primarily driven by the net change in short-term investments.For the first three months of fiscal 20

296、24,the net change in short-term investments(including sales,maturities and purchases)resulted in a cash inflow of$672 million compared to a cash outflow of$89 million for the first three months of fiscal 2023.Cash provided(used)by financing activities was an outflow of$1,599 million for the first th

297、ree months of fiscal 2024 compared to$1,404 million for the first three monthsof fiscal 2023.The increased outflow in the first three months of fiscal 2024 was driven by higher share repurchases of$1,133 million for the first three months of fiscal2024 compared to$983 million in the first three mont

298、hs of fiscal 2023,as well as higher dividend payments of$524 million for the first three months of fiscal 2024compared to$480 million in the first three months of fiscal 2023.During the first three months of fiscal 2024,we repurchased a total of 10.5 million shares of NIKEs Class B Common Stock for$

299、1,132 million(an average price of$108.12 per share)under the four-year,$18 billion share repurchase plan authorized by the Board of Directors in June 2022.As of August 31,2023,we have repurchased54.0 million shares at a cost of approximately$5.9 billion(an average price of$109.94 per share)under thi

300、s$18 billion share repurchase program.We continue to expectfunding of share repurchases will come from operating cash flows and excess cash.The timing and the amount of share repurchases will be dictated by our capital needsand stock market conditions.CAPITAL RESOURCESOn July 21,2022,we filed a shel

301、f registration statement(the Shelf)with the U.S.Securities and Exchange Commission(the SEC)which permits us to issue anunlimited amount of debt securities from time to time.The Shelf expires on July 21,2025.As of August 31,2023,our committed credit facilities were unchanged from the information prev

302、iously reported within the Annual Report.We currently have long-termdebt ratings of AA-and A1 from Standard and Poors Corporation and Moodys Investor Services,respectively.Any changes to these ratings could result in interest rateand facility fee changes.As of August 31,2023,we were in full complian

303、ce with the covenants under our facilities and believe it is unlikely we will fail to meet any of thecovenants in the foreseeable future.As of August 31,2023 and May 31,2023,no amounts were outstanding under our committed credit facilities.Liquidity is also provided by our$3 billion commercial paper

304、 program.As of and for the three months ended August 31,2023,we did not have any borrowings outstandingunder our$3 billion program.We may issue commercial paper or other debt securities depending on general corporate needs.To date,in fiscal 2024,we have not experienced difficulty accessing the capit

305、al or credit markets;however,future volatility may increase costs associated with issuingcommercial paper or other debt instruments or affect our ability to access those markets.As of August 31,2023,we had Cash and equivalents and Short-term investments totaling$8.8 billion,primarily consisting of c

306、ommercial paper,corporate notes,depositsheld at major banks,money market funds,U.S.Treasury obligations and other investment grade fixed-income securities.Our fixed-income investments are exposed toboth credit and interest rate risk.All of our investments are investment grade to minimize our credit

307、risk.While individual securities have varying durations,as ofAugust 31,2023,the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 100 days.We believe that existing Cash and equivalents,Short-term investments and cash generated by operations,together w

308、ith access to external sources of funds as describedabove,will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.There have been no significant changes to the material cash requirements reported within the Annual Report.34Table of ContentsOFF-BALANCE SHEET ARRANG

309、EMENTSAs of August 31,2023,we did not have any off-balance sheet arrangements that have,or are reasonably likely to have,a material effect on our current or future financialcondition,results of operations,liquidity,capital expenditures or capital resources.NEW ACCOUNTING PRONOUNCEMENTSRefer to Note

310、1 Summary of Significant Accounting Policies within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements forrecently adopted and issued accounting standards.CRITICAL ACCOUNTING ESTIMATESOur discussion and analysis of our financial condition and results of operations ar

311、e based upon our Unaudited Condensed Consolidated Financial Statements,which havebeen prepared in accordance with accounting principles generally accepted in the United States of America.The preparation of these financial statements requires us tomake estimates and judgments that affect the reported

312、 amounts of assets,liabilities,revenues and expenses and related disclosure of contingent assets and liabilities.We believe the assumptions and judgments involved in the accounting estimates described in the Managements Discussion and Analysis of Financial Condition andResults of Operations section

313、of the Annual Report have the greatest potential impact on our financial statements,so we consider these to be our critical accountingestimates.Actual results could differ from these estimates.We are not currently aware of any reasonably likely events or circumstances that would result in materially

314、different amounts being reported.35Table of ContentsITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISKThere have been no material changes from the information previously reported under Part II,Item 7A within our Annual Report on Form 10-K for the fiscal year endedMay 31,2023.ITEM 4.CON

315、TROLS AND PROCEDURESWe maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Securities ExchangeAct of 1934,as amended(the Exchange Act)reports is recorded,processed,summarized and reported within the time perio

316、ds specified in the SECs rules and formsand that such information is accumulated and communicated to our management,including our Chief Executive Officer and Chief Financial Officer,as appropriate,toallow for timely decisions regarding required disclosure.In designing and evaluating the disclosure c

317、ontrols and procedures,management recognizes that any controlsand procedures,no matter how well designed and operated,can provide only reasonable assurance of achieving the desired control objectives,and management isrequired to apply its judgment in evaluating the cost-benefit relationship of possi

318、ble controls and procedures.We carry out a variety of ongoing procedures,under the supervision and with the participation of our management,including our Chief Executive Officer and ChiefFinancial Officer,to evaluate the effectiveness of the design and operation of our disclosure controls and proced

319、ures.Based on the foregoing,our Chief Executive Officerand Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of August 31,2023.We are continuing several transformation initiatives to centralize and simplify our business

320、processes and systems.These are long-term initiatives,which we believe willenhance our internal control over financial reporting due to increased automation and further integration of related processes.We will continue to monitor our internalcontrol over financial reporting for effectiveness through

321、out these transformation initiatives.There have not been any changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected,or are reasonably likelyto materially affect,our internal control over financial reporting.36Table of ContentsSPEC

322、IAL NOTE REGARDING FORWARD-LOOKINGSTATEMENTS AND ANALYST REPORTSCertain written and oral statements,other than purely historic information,including estimates,projections,statements relating to NIKEs business plans,objectives andexpected operating or financial results and the assumptions upon which

323、those statements are based,made or incorporated by reference from time to time by NIKE or itsrepresentatives in this report,other reports,filings with the SEC,press releases,conferences or otherwise,are forward-looking statements within the meaning of thePrivate Securities Litigation Reform Act of 1

324、995 and Section 21E of the Exchange Act.Forward-looking statements include,without limitation,any statement that maypredict,forecast,indicate or imply future results,performance or achievements,and may contain the words believe,anticipate,expect,estimate,project,will be,will continue,will likely res

325、ult or words or phrases of similar meaning.Forward-looking statements involve risks and uncertainties which may cause actual results todiffer materially from the forward-looking statements.The risks and uncertainties are detailed from time to time in reports filed by NIKE with the SEC,including repo

326、rts filedon Forms 8-K,10-Q and 10-K,and include,among others,the following:international,national and local political,civil,economic and market conditions,including high,and increases in,inflation and interest rates;the size and growth of the overall athletic or leisure footwear,apparel and equipmen

327、t markets;intense competition amongdesigners,marketers,distributors and sellers of athletic or leisure footwear,apparel and equipment for consumers and endorsers;demographic changes;changes inconsumer preferences;popularity of particular designs,categories of products and sports;seasonal and geograp

328、hic demand for NIKE products;difficulties in anticipatingor forecasting changes in consumer preferences,consumer demand for NIKE products and the various market factors described above;our ability to execute on oursustainability strategy and achieve our sustainability-related goals and targets,inclu

329、ding sustainable product offerings;difficulties in implementing,operating andmaintaining NIKEs increasingly complex information technology systems and controls,including,without limitation,the systems related to demand and supply planningand inventory control;interruptions in data and information te

330、chnology systems;consumer data security;fluctuations and difficulty in forecasting operating results,including,without limitation,the fact that advance orders may not be indicative of future revenues due to changes in shipment timing,the changing mix of orders withshorter lead times,and discounts,or

331、der cancellations and returns;the ability of NIKE to sustain,manage or forecast its growth and inventories;the size,timing and mix ofpurchases of NIKEs products;increases in the cost of materials,labor and energy used to manufacture products;new product development and introduction;the ability tosec

332、ure and protect trademarks,patents and other intellectual property;product performance and quality;customer service;adverse publicity and an inability to maintainNIKEs reputation and brand image,including without limitation,through social media or in connection with brand damaging events;the loss of

333、 significant customers orsuppliers;dependence on distributors and licensees;business disruptions;increased costs of freight and transportation to meet delivery deadlines;increases in borrowingcosts due to any decline in NIKEs debt ratings;changes in business strategy or development plans;general risks associated with doing business outside of the UnitedStates,including,without limitation,exchange