UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 202329, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                         TO                         .

Commission File No. 1-10635
nikelogoorange.jpg
NIKE, 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 of principal executive offices and zip code)

(503) 671-6453
(Registrant's 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 by check mark:YESNO
whether 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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.þ
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 such files).þ
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"large accelerated filer,” “accelerated" "accelerated filer,” “smaller" "smaller reporting company," and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerþAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
if an emerging growth company, if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided 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).þ
As of March 30, 2023,29, 2024, the number of shares of the Registrant's Common Stock outstanding were:
Class A304,897,252297,897,252 
Class B1,232,091,5641,211,461,555 
1,536,988,8161,509,358,807 



Table of Contents

NIKE, INC.
FORM 10-Q
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1.
ITEM 3.
ITEM 4.
PART II - OTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 5.
ITEM 6.



Table of Contents

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NIKE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(In millions, except per share data)(In millions, except per share data)2023202220232022(In millions, except per share data)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
RevenuesRevenues$12,390 $10,871 $38,392 $34,476 
Cost of salesCost of sales7,019 5,804 21,695 18,500 
Gross profitGross profit5,371 5,067 16,697 15,976 
Demand creation expenseDemand creation expense923 854 2,968 2,789 
Operating overhead expenseOperating overhead expense3,036 2,584 9,035 7,980 
Total selling and administrative expenseTotal selling and administrative expense3,959 3,438 12,003 10,769 
Interest expense (income), netInterest expense (income), net(7)53 22 165 
Other (income) expense, netOther (income) expense, net(58)(94)(283)(235)
Income before income taxesIncome before income taxes1,477 1,670 4,955 5,277 
Income tax expenseIncome tax expense237 274 916 670 
NET INCOMENET INCOME$1,240 $1,396 $4,039 $4,607 
Earnings per common share:Earnings per common share:
BasicBasic$0.80 $0.88 $2.59 $2.91 
Basic
Basic
DilutedDiluted$0.79 $0.87 $2.57 $2.85 
Weighted average common shares outstanding:Weighted average common shares outstanding:
BasicBasic1,543.8 1,579.0 1,556.7 1,581.1 
Basic
Basic
DilutedDiluted1,564.8 1,610.7 1,574.4 1,615.8 
The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
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NIKE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)2023202220232022(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Net incomeNet income$1,240 $1,396 $4,039 $4,607 
Other comprehensive income (loss), net of tax:Other comprehensive income (loss), net of tax:
Change in net foreign currency translation adjustment
Change in net foreign currency translation adjustment
Change in net foreign currency translation adjustmentChange in net foreign currency translation adjustment153 (6)281 (289)
Change in net gains (losses) on cash flow hedgesChange in net gains (losses) on cash flow hedges(433)(29)(279)775 
Change in net gains (losses) on otherChange in net gains (losses) on other23 (11)(18)(7)
Total other comprehensive income (loss), net of taxTotal other comprehensive income (loss), net of tax(257)(46)(16)479 
TOTAL COMPREHENSIVE INCOMETOTAL COMPREHENSIVE INCOME$983 $1,350 $4,023 $5,086 
The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
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NIKE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
FEBRUARY 28,MAY 31,
FEBRUARY 29,FEBRUARY 29,MAY 31,
(In millions)(In millions)20232022(In millions)20242023
ASSETSASSETS
Current assets:Current assets:
Current assets:
Current assets:
Cash and equivalents
Cash and equivalents
Cash and equivalentsCash and equivalents$6,955 $8,574 
Short-term investmentsShort-term investments3,847 4,423 
Accounts receivable, netAccounts receivable, net4,513 4,667 
InventoriesInventories8,905 8,420 
Prepaid expenses and other current assetsPrepaid expenses and other current assets1,815 2,129 
Total current assetsTotal current assets26,035 28,213 
Property, plant and equipment, netProperty, plant and equipment, net4,939 4,791 
Operating lease right-of-use assets, netOperating lease right-of-use assets, net2,834 2,926 
Identifiable intangible assets, netIdentifiable intangible assets, net277 286 
GoodwillGoodwill281 284 
Deferred income taxes and other assetsDeferred income taxes and other assets3,928 3,821 
TOTAL ASSETSTOTAL ASSETS$38,294 $40,321 
LIABILITIES AND SHAREHOLDERS' EQUITYLIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:Current liabilities:
Current liabilities:
Current liabilities:
Current portion of long-term debt
Current portion of long-term debt
Current portion of long-term debtCurrent portion of long-term debt$500 $500 
Notes payableNotes payable14 10 
Accounts payableAccounts payable2,675 3,358 
Current portion of operating lease liabilitiesCurrent portion of operating lease liabilities435 420 
Accrued liabilitiesAccrued liabilities5,594 6,220 
Income taxes payableIncome taxes payable330 222 
Total current liabilitiesTotal current liabilities9,548 10,730 
Long-term debtLong-term debt8,925 8,920 
Operating lease liabilitiesOperating lease liabilities2,692 2,777 
Deferred income taxes and other liabilitiesDeferred income taxes and other liabilities2,598 2,613 
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)Commitments and contingencies (Note 12)
Redeemable preferred stockRedeemable preferred stock— — 
Shareholders' equity:Shareholders' equity:
Common stock at stated value:Common stock at stated value:
Class A convertible — 305 and 305 shares outstanding— — 
Class B — 1,235 and 1,266 shares outstanding
Common stock at stated value:
Common stock at stated value:
Class A convertible — 298 and 305 shares outstanding
Class A convertible — 298 and 305 shares outstanding
Class A convertible — 298 and 305 shares outstanding
Class B — 1,213 and 1,227 shares outstanding
Capital in excess of stated valueCapital in excess of stated value12,074 11,484 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)302 318 
Retained earningsRetained earnings2,152 3,476 
Total shareholders' equityTotal shareholders' equity14,531 15,281 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITYTOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$38,294 $40,321 
The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
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NIKE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED FEBRUARY 28,
NINE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023
Cash provided (used) by operations:Cash provided (used) by operations:
Net incomeNet income$4,039 $4,607 
Net income
Net income
Adjustments to reconcile net income to net cash provided (used) by operations:Adjustments to reconcile net income to net cash provided (used) by operations:
Depreciation
Depreciation
DepreciationDepreciation516 538 
Deferred income taxesDeferred income taxes(216)(234)
Stock-based compensationStock-based compensation556 467 
Amortization, impairment and otherAmortization, impairment and other107 
Net foreign currency adjustmentsNet foreign currency adjustments(197)
Changes in certain working capital components and other assets and liabilities:Changes in certain working capital components and other assets and liabilities:
(Increase) decrease in accounts receivable(Increase) decrease in accounts receivable109 466 
(Increase) decrease in accounts receivable
(Increase) decrease in accounts receivable
(Increase) decrease in inventories(Increase) decrease in inventories(527)(872)
(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets(273)(639)
Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilitiesIncrease (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities(526)(305)
Cash provided (used) by operationsCash provided (used) by operations3,588 4,037 
Cash provided (used) by investing activities:Cash provided (used) by investing activities:
Purchases of short-term investments
Purchases of short-term investments
Purchases of short-term investmentsPurchases of short-term investments(4,844)(9,229)
Maturities of short-term investmentsMaturities of short-term investments2,470 5,152 
Sales of short-term investmentsSales of short-term investments3,149 2,921 
Additions to property, plant and equipmentAdditions to property, plant and equipment(700)(516)
Other investing activitiesOther investing activities62 (39)
Cash provided (used) by investing activitiesCash provided (used) by investing activities137 (1,711)
Cash provided (used) by financing activities:Cash provided (used) by financing activities:
Increase (decrease) in notes payable
Increase (decrease) in notes payable, net
Increase (decrease) in notes payable, net
Increase (decrease) in notes payable, net
Proceeds from exercise of stock options and other stock issuancesProceeds from exercise of stock options and other stock issuances413 959 
Repurchase of common stockRepurchase of common stock(4,101)(2,923)
Dividends — common and preferredDividends — common and preferred(1,488)(1,356)
Other financing activitiesOther financing activities(94)(140)
Cash provided (used) by financing activitiesCash provided (used) by financing activities(5,266)(3,456)
Effect of exchange rate changes on cash and equivalentsEffect of exchange rate changes on cash and equivalents(78)(55)
Net increase (decrease) in cash and equivalentsNet increase (decrease) in cash and equivalents(1,619)(1,185)
Cash and equivalents, beginning of periodCash and equivalents, beginning of period8,574 9,889 
CASH AND EQUIVALENTS, END OF PERIODCASH AND EQUIVALENTS, END OF PERIOD$6,955 $8,704 
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:
Non-cash additions to property, plant and equipmentNon-cash additions to property, plant and equipment$145 $126 
Non-cash additions to property, plant and equipment
Non-cash additions to property, plant and equipment
Dividends declared and not paidDividends declared and not paid527 488 
The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
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NIKE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at November 30, 2023298 $ 1,219 $3 $12,871 $121 $1,151 $14,146 
Stock options exercised135 135 
Repurchase of Class B Common Stock(8)(67)(799)(866)
Dividends on common stock ($0.370 per share)(561)(561)
Issuance of shares to employees, net of shares withheld for employee taxes(27)(20)
Stock-based compensation216 216 
Net income1,172 1,172 
Other comprehensive income (loss)
Balance at February 29, 2024298 $ 1,213 $3 $13,128 $125 $970 $14,226 
COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at November 30, 2022305 $ 1,245 $3 $11,851 $559 $2,859 $15,272 
Stock options exercised153 153 
Repurchase of Class B Common Stock(13)(99)(1,420)(1,519)
Dividends on common stock ($0.340 per share)(527)(527)
Issuance of shares to employees, net of shares withheld for employee taxes(23)— (23)
Stock-based compensation192 192 
Net income1,240 1,240 
Other comprehensive income (loss)(257)(257)
Balance at February 28, 2023305 $ 1,235 $3 $12,074 $302 $2,152 $14,531 

COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at November 30, 2021305 $ 1,278 $3 $10,990 $145 $3,786 $14,924 
Stock options exercised112 112 
Repurchase of Class B Common Stock(8)(57)(1,165)(1,222)
Dividends on common stock ($0.305 per share)(488)(488)
Issuance of shares to employees, net of shares withheld for employee taxes(20)(8)(28)
Stock-based compensation161 161 
Net income1,396 1,396 
Other comprehensive income (loss)(46)(46)
Balance at February 28, 2022305 $ 1,271 $3 $11,186 $99 $3,521 $14,809 

COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at May 31, 2022305 $ 1,266 $3 $11,484 $318 $3,476 $15,281 
Stock options exercised302 302 
Repurchase of Class B Common Stock(39)(288)(3,829)(4,117)
Dividends on common stock ($0.985 per share) and preferred stock ($0.10 per share)(1,535)(1,535)
Issuance of shares to employees, net of shares withheld for employee taxes20 21 
Stock-based compensation556 556 
Net income4,039 4,039 
Other comprehensive income (loss)(16)(16)
Balance at February 28, 2023305 $ 1,235 $3 $12,074 $302 $2,152 $14,531 

COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at May 31, 2023305 $ 1,227 $3 $12,412 $231 $1,358 $14,004 
Stock options exercised347 347 
Conversion to Class B Common Stock(7)— 
Repurchase of Class B Common Stock(30)(251)(2,956)(3,207)
Dividends on common stock ($1.080 per share) and preferred stock ($0.10 per share)(1,645)(1,645)
Issuance of shares to employees, net of shares withheld for employee taxes13 15 
Stock-based compensation618 618 
Net income4,200 4,200 
Other comprehensive income (loss)(106)(106)
Balance at February 29, 2024298 $ 1,213 $3 $13,128 $125 $970 $14,226 
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COMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS B
COMMON STOCKCOMMON STOCKCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL
CLASS ACLASS ACLASS B
(In millions, except per share data)(In millions, except per share data)SHARESAMOUNTSHARESAMOUNTCAPITAL IN EXCESS OF STATED VALUEACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RETAINED EARNINGSTOTAL(In millions, except per share data)SHARESAMOUNTSHARESAMOUNT
Balance at May 31, 2021305 $ 1,273 $3 
Balance at May 31, 2022
Stock options exercisedStock options exercised14 837 837 
Repurchase of Class B Common StockRepurchase of Class B Common Stock(19)(126)(2,806)(2,932)
Dividends on common stock ($0.885 per share) and preferred stock ($0.10 per share)(1,406)(1,406)
Dividends on common stock ($0.985 per share) and preferred stock ($0.10 per share)
Issuance of shares to employees, net of shares withheld for employee taxesIssuance of shares to employees, net of shares withheld for employee taxes43 (53)(10)
Stock-based compensationStock-based compensation467 467 
Net incomeNet income4,607 4,607 
Other comprehensive income (loss)Other comprehensive income (loss)479 479 
Balance at February 28, 2022305 $ 1,271 $3 $11,186 $99 $3,521 $14,809 
Balance at February 28, 2023
The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 54
NOTE 65
NOTE 76
NOTE 87
NOTE 98
NOTE 109
NOTE 1110
NOTE 1211
NOTE 1312
NOTE 1413
NOTE 14
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NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Unaudited Condensed Consolidated Financial Statements include the accounts of NIKE, Inc. and its subsidiaries (the “Company”"Company" or “NIKE”"NIKE") and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim period. The year-end Condensed Consolidated Balance Sheet data as of May 31, 2022,2023, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“("U.S. GAAP”GAAP"). The interim financial information and notes thereto should be read in conjunction with the Company's latest Annual Report on Form 10-K for the fiscal year ended May 31, 2022.2023 (the "Annual Report"). The results of operations for the three and nine months ended February 28, 2023,29, 2024, are not necessarily indicative of results to be expected for the entire fiscal year.
RECENTLY ISSUED ACCOUNTING STANDARDS AND DISCLOSURE RULES
In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The uncertain state ofamendments will require public entities to disclose significant segment expenses that are regularly provided to the global economy or worsening macroeconomic conditions could affectchief operating decision maker and included within segment profit and loss. The amendments are effective for the Company’s business, including, among other things, potential impacts of inflationCompany's annual periods beginning June 1, 2024, and rising interest rates on consumer behavior, higher inventory levelsinterim periods beginning June 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in various markets, higher inventory obsolescence reserves, higher promotional activity, reduced demand for product, reduced orders from wholesale customers for products and order cancellations. There could also be new or prolonged COVID-19 related restrictions or disruptions. Any of these factors, among others, could have material adverse impactsthe financial statements. The Company is currently evaluating the ASU to determine its impact on the Company’s revenue growth as well as overall profitabilityCompany's disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company's annual periods beginning June 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.
In March 2024, the U.S. Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in future periods.registration statements and annual reports. The disclosure requirements will apply to the Company's fiscal year beginning June 1, 2025. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.
RECENTLY ISSUEDADOPTED ACCOUNTING STANDARDS
In September 2022, the Financial Accounting Standards Board (the “FASB”)FASB issued Accounting Standards Update (“ASU”) ASU 2022-04, Liabilities Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances transparency surrounding the use of supplier finance programs.Obligations. The new guidance requires qualitative and quantitative disclosure sufficient to enable users of the financial statements to understand the nature, activity during the period, changes from period to period and potential magnitude of such programs. The amendments are effective forCompany adopted the required guidance in the first quarter of fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for2024.
Certain financial institutions offer voluntary supplier finance programs facilitated through a third-party platform that provide participating suppliers the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023.option to finance valid payment obligations from the Company. The Company is currently evaluatingnot a party to agreements negotiated between participating suppliers and third-party financial institutions. The Company's obligations to its suppliers, including amounts due and payment terms, are not affected by a supplier's decision to participate in these programs and the ASUCompany does not provide guarantees to determine its impact on the Company’s disclosures.
NOTE 2 — INVENTORIES
Inventory balancesthird parties in connection with these programs. As of $8,905 million and $8,420 million at February 28, 202329, 2024 and May 31, 2022,2023, the Company had $704 million and $834 million, respectively, were substantially all finished goods.of outstanding supplier obligations confirmed as valid under these programs. These amounts are included within Accounts payable on the Unaudited Condensed Consolidated Balance Sheets.
NOTE 3 — ACCRUED LIABILITIES
Accrued liabilities included the following:
FEBRUARY 28,MAY 31,
(Dollars in millions)20232022
Compensation and benefits, excluding taxes$1,445 $1,297 
Sales-related reserves1,0671,015 
Dividends payable531485 
Endorsement compensation498496 
Allowance for expected loss on sale(1)
397 
Other2,0532,530
TOTAL ACCRUED LIABILITIES$5,594 $6,220 
(1) Refer to Note 14 — Acquisitions and Divestitures for additional information.
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NOTE 42 — ACCRUED LIABILITIES
Accrued liabilities included the following:
FEBRUARY 29,MAY 31,
(Dollars in millions)20242023
Compensation and benefits, excluding taxes$1,254 $1,737 
Sales-related reserves1,227 994 
Dividends payable566 529 
Endorsement compensation493 552 
Other2,278 1,911
TOTAL ACCRUED LIABILITIES$5,818 $5,723 
NOTE 3 — FAIR VALUE MEASUREMENTS
The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivatives, equity securities and available-for-sale debt securities. For additional information about the Company's fair value policies, refer to Note 1 — Summary of Significant Accounting Policies ofwithin the Annual Report on Form 10-K for the fiscal year ended May 31, 2022.Report.
The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of February 28, 202329, 2024 and May 31, 2022,2023, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:
FEBRUARY 28, 2023
FEBRUARY 29, 2024FEBRUARY 29, 2024
(Dollars in millions)(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTS(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTS
CashCash$1,105 $1,105 $— 
Level 1:Level 1:
U.S. Treasury securitiesU.S. Treasury securities3,185 3,184 
U.S. Treasury securities
U.S. Treasury securities
Level 2:Level 2:
Commercial paper and bonds
Commercial paper and bonds
Commercial paper and bondsCommercial paper and bonds583 575 
Money market fundsMoney market funds5,114 5,114 — 
Time depositsTime deposits781 727 54 
U.S. Agency securitiesU.S. Agency securities34 — 34 
Total Level 2Total Level 26,512 5,849 663 
TOTALTOTAL$10,802 $6,955 $3,847 
MAY 31, 2022
MAY 31, 2023MAY 31, 2023
(Dollars in millions)(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTS(Dollars in millions)ASSETS AT FAIR VALUECASH AND EQUIVALENTSSHORT-TERM INVESTMENTS
CashCash$839 $839 $— 
Level 1:Level 1:
U.S. Treasury securitiesU.S. Treasury securities3,801 3,793 
U.S. Treasury securities
U.S. Treasury securities
Level 2:Level 2:
Commercial paper and bonds
Commercial paper and bonds
Commercial paper and bondsCommercial paper and bonds660 37 623 
Money market fundsMoney market funds6,458 6,458 — 
Time depositsTime deposits1,237 1,232 
U.S. Agency securitiesU.S. Agency securities— 
Total Level 2Total Level 28,357 7,727 630 
TOTALTOTAL$12,997 $8,574 $4,423 
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As of February 28, 2023,29, 2024, the Company held $3,089$867 million of available-for-sale debt securities with maturity dates within one year and $758$746 million with maturity dates greater than one year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets. The fair value of the Company's available-for-sale debt securities approximates their amortized cost.
Included in Interest expense (income), net was interest income related to the Company's investment portfolio of $83$113 million and $22$83 million for the three months ended February 29, 2024 and February 28, 2023, and 2022, respectively, and $196$304 million and $57$196 million for the nine months ended February 29, 2024 and February 28, 2023, and 2022, respectively.
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The following tables present information about the Company's derivative assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:
FEBRUARY 28, 2023
DERIVATIVE ASSETSDERIVATIVE LIABILITIES
FEBRUARY 29, 2024FEBRUARY 29, 2024
DERIVATIVE ASSETSDERIVATIVE ASSETSDERIVATIVE LIABILITIES
(Dollars in millions)(Dollars in millions)ASSETS AT FAIR VALUEOTHER CURRENT ASSETSOTHER LONG-TERM ASSETSLIABILITIES AT FAIR VALUEACCRUED LIABILITIESOTHER LONG-TERM LIABILITIES(Dollars in millions)ASSETS AT FAIR VALUEOTHER CURRENT ASSETSOTHER LONG-TERM ASSETSLIABILITIES AT FAIR VALUEACCRUED LIABILITIESOTHER LONG-TERM LIABILITIES
Level 2:Level 2:
Foreign exchange forwards and options(1)
Foreign exchange forwards and options(1)
$651 $551 $100 $176 $112 $64 
Embedded derivatives— — 
Foreign exchange forwards and options(1)
Foreign exchange forwards and options(1)
Interest rate swap contracts(1)
TOTALTOTAL$656 $556 $100 $178 $114 $64 
(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 $175$149 million as of February 28, 2023.29, 2024. As of that date, the Company received $100$48 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of February 28, 2023.29, 2024.
MAY 31, 2023MAY 31, 2023
DERIVATIVE ASSETSDERIVATIVE ASSETSDERIVATIVE LIABILITIES
(Dollars in millions)(Dollars in millions)ASSETS AT FAIR VALUEOTHER CURRENT ASSETSOTHER LONG-TERM ASSETSLIABILITIES AT FAIR VALUEACCRUED LIABILITIESOTHER LONG-TERM LIABILITIES
Level 2:
Foreign exchange forwards and options(1)
Foreign exchange forwards and options(1)
Foreign exchange forwards and options(1)
MAY 31, 2022
DERIVATIVE ASSETSDERIVATIVE LIABILITIES
(Dollars in millions)ASSETS AT FAIR VALUEOTHER CURRENT ASSETSOTHER LONG-TERM ASSETSLIABILITIES AT FAIR VALUEACCRUED LIABILITIESOTHER LONG-TERM LIABILITIES
Level 2:
Foreign exchange forwards and options(1)
$875 $669 $206 $76 $65 $11 
Embedded derivatives— — 
TOTAL$880 $674 $206 $77 $66 $11 
(1)If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $76$178 million as of May 31, 2022.2023. As of that date, the Company received $486$36 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of May 31, 20222023.
For additional information related to the Company's derivative financial instruments and credit risk, refer to Note 98 — 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 VALUE
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts, and debt issuance costs.costs and interest rate swap fair value adjustments. The fair value of long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2). The fair value of the Company's Long-term debt including the current portion, was approximately $8,241$7,764 million at February 28, 202329, 2024 and $8,933$7,889 million at May 31, 2022.2023.
For fair value information regarding Notes payable, refer to Note 5 — Short-term Borrowings and Credit Lines..
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NOTE 54 — SHORT-TERM BORROWINGS AND CREDIT LINES
The carrying amounts reflected on the Unaudited Condensed Consolidated Balance Sheets for Notes payable approximate fair value.
As of February 28, 202329, 2024 and May 31, 2022,2023, the Company had no borrowings outstanding under its $3 billion commercial paper program.
On March 10, 2023,8, 2024, subsequent to the end of the third quarter of fiscal 2023,2024, the Company entered into a 364-day committed credit facility agreement with a syndicate of banks, which provides for up to $1 billion of borrowings, with an option to increase borrowings up to $1.5 billion in total with lender approval. The facility matures on March 8, 2024,7, 2025, with an option to extend the maturity date an additional 364 days. This facility replaces the prior $1 billion 364-day credit facility agreement entered into on March 11, 2022,10, 2023, which matured on March 10, 2023.8, 2024. Based on the Company's current long-term senior unsecured debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term Secured Overnight Financing Rate (Term SOFR) for the applicable interest period plus 0.60%. The facility fee is 0.02% of the total undrawn commitment. As of April 6, 2023,4, 2024, no amounts were outstanding under this committed credit facility.
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There have been no other changes to the credit lines reported in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2022.2023.
NOTE 65 — INCOME TAXES
The effective tax rate was 18.5%15.6% and 12.7%18.5% for the nine months ended February 29, 2024 and February 28, 2023, and 2022, respectively. The increasedecrease in the Company's effective tax rate was primarily due to one-time benefits including the impact of temporary relief provided by the Internal Revenue Service ("IRS") relating to U.S. foreign tax credit regulations. On July 21, 2023, the IRS issued Notice 2023-55 which specifically delayed the application of certain U.S. foreign tax credit regulations that had previously limited the Company's ability to claim credits on certain foreign taxes for the fiscal year ended May 31, 2023. As a less favorable impact from stock-based compensation andresult of this new guidance, the Company recognized a shiftone-time tax benefit related to prior year tax positions in the first three months of fiscal 2024. Other one-time benefits included a reduction in accrued withholding taxes on undistributed foreign earnings recognized in the second quarter 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 tax system, including a fifteen percent minimum tax based on "adjusted financial statement income," which was effective for the Company beginning June 1, 2023. Based on the Company's earnings mix.current analysis of the provisions, these tax law changes are not expected to have a material impact on the Company's financial statements for fiscal 2024.
As of February 28, 2023,29, 2024, total gross unrecognized tax benefits, excluding related interest and penalties, were $941$988 million, $657$701 million of which would affect the Company's effective tax rate if recognized in future periods. The majority of the total gross unrecognized tax benefits are long-term in nature and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets. As of May 31, 2022,2023, total gross unrecognized tax benefits, excluding related interest and penalties, were $848$936 million. As of February 28, 202329, 2024 and May 31, 2022,2023, accrued interest and penalties related to uncertain tax positions were $282$314 million and $248$268 million, respectively, (excluding federal benefit) and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.
The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions. The Company is currently under audit by the U.S. IRS for fiscal years 2017 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 foreign jurisdictions. Although the timing of resolution of audits is not certain, the Company evaluates all domestic and foreign audit issues in the aggregate, along with the expiration of applicable statutes of limitations, and estimates that it is reasonably possible the total gross unrecognized tax benefits could decrease by up to $30$20 million within the next 12 months. In January 2019, the European Commission opened a formal investigation to examine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company. The Company believes the investigation is without merit. If this matter is adversely resolved, the Netherlands may be required to assess additional amounts with respect to prior periods, and the Company's income taxes related to prior periods in the Netherlands could increase.
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NOTE 76 — STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
The NIKE, Inc. Stock Incentive Plan (the “Stock"Stock Incentive Plan”Plan") provides for the issuance of up to 798 million previously unissued shares of Class B Common Stock in connection with equity awards granted under the Stock Incentive Plan. The Stock Incentive Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights and stock awards, including restricted stock and restricted stock units. Restricted stock units include both time-vesting restricted stock units (RSUs)("RSUs") as well as performance-based restricted stock units (PSUs)("PSUs"). In addition to the Stock Incentive Plan, the Company gives employees the right to purchase shares at a discount from the market price under employee stock purchase plans (ESPPs)("ESPPs"). ReferFor additional information, refer to Note 119 — Common Stock and Stock-Based Compensation ofwithin the Annual Report on Form 10-K for the fiscal year ended May 31, 2022 for additional information.Report.
The following table summarizes the Company's total stock-based compensation expense recognized in Cost of sales or Operating overhead expense, as applicable: 
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28, THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)2023202220232022(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Stock options(1)
Stock options(1)
$78 $75 $232 $221 
ESPPsESPPs20 15 53 44 
Restricted stock and restricted stock units(1)(2)
94 71 271 202 
Restricted stock and restricted stock units(2)
TOTAL STOCK-BASED COMPENSATION EXPENSETOTAL STOCK-BASED COMPENSATION EXPENSE$192 $161 $556 $467 
(1)Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is primarily recorded for employees meeting certain retirement eligibility requirements.
(2)Restricted stock units include RSUs and PSUs.
The income tax benefit related to stock-based compensation expense was $22$12 million and $34$22 million for the three months ended February 29, 2024 and February 28, 2023, and 2022, respectively, and $44$30 million and $307$44 million for the nine months ended February 29, 2024 and February 28, 2023, and 2022, respectively, and reported within Income tax expense.
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STOCK OPTIONS
The weighted average fair value per share of stock options granted during the nine months ended February 28, 2023 and 2022, computed as of the grant date using the Black-Scholes pricing model, was $31.31 and $37.53, respectively. The weighted average assumptions used to estimate these fair values were as follows:
 NINE MONTHS ENDED FEBRUARY 28,
20232022
Dividend yield0.9 %0.8 %
Expected volatility27.1 %24.9 %
Weighted average expected life (in years)5.85.8
Risk-free interest rate3.3 %0.9 %
Expected volatilities are based on an analysis of the historical volatility of the Company's common stock, the implied volatility in market-traded options on the Company's common stock with a term greater than one year, as well as other factors. The weighted average expected life of stock options is based on an analysis of historical and expected future exercise patterns. The interest rate 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 February 28, 2023,29, 2024, the Company had $502$478 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.6 years.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
The weighted average fair value per share of restricted stock and RSUs granted for the nine months ended February 28, 2023 and 2022, computed as of the grant date, was $110.27 and $158.94, respectively.
The weighted average fair value per share of PSUs granted for the nine months ended February 28, 2023 and 2022, computed as of the grant date, was $134.71 and $250.52, respectively.
As of February 28, 2023,29, 2024, the Company had $727$699 million of unrecognized compensation costs from restricted stock and restricted stock units, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.5 years.
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NOTE 87 — EARNINGS PER SHARE
The following is a reconciliation from basic earnings per common share to diluted earnings per common share. The computations of diluted earnings per common share exclude restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional 29.540.9 million and 9.329.5 million shares of common stock outstanding for the three months ended February 29, 2024 and February 28, 2023, and 2022, respectively, and 31.842.6 million and 9.431.8 million shares of common stock outstanding for the nine months ended February 29, 2024 and February 28, 2023, and 2022, respectively, because the awards were assumed to be anti-dilutive.
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28, THREE MONTHS ENDEDNINE MONTHS ENDED
(In millions, except per share data)(In millions, except per share data)2023202220232022(In millions, except per share data)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Net income available to common stockholdersNet income available to common stockholders$1,240 $1,396 $4,039 $4,607 
Determination of shares:Determination of shares:
Weighted average common shares outstandingWeighted average common shares outstanding1,543.8 1,579.0 1,556.7 1,581.1 
Weighted average common shares outstanding
Weighted average common shares outstanding
Assumed conversion of dilutive stock options and awardsAssumed conversion of dilutive stock options and awards21.0 31.7 17.7 34.7 
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGDILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING1,564.8 1,610.7 1,574.4 1,615.8 
Earnings per common share:Earnings per common share:
BasicBasic$0.80 $0.88 $2.59 $2.91 
Basic
Basic
DilutedDiluted$0.79 $0.87 $2.57 $2.85 
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NOTE 98 — RISK MANAGEMENT AND DERIVATIVES
The Company is exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. As of and for the nine months ended February 28, 2023,29, 2024, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K.Report. For additional information about the Company's derivatives and hedging policies, refer to Note 1 — Summary of Significant Accounting Policies and Note 1412 — Risk Management and Derivatives ofwithin the Annual Report on Form 10-K for the fiscal year ended May 31, 2022.Report.
The majority of derivatives outstanding as of February 28, 2023,29, 2024, are designated as foreign currency cash flow hedges, primarily for Euro/U.S. Dollar, British Pound/Euro, Chinese Yuan/U.S. Dollar British Pound/Euro and Japanese Yen/U.S. Dollar currency pairs. All derivatives are recognized on the Unaudited Condensed Consolidated Balance Sheets at fair value and classified based on the instrument's maturity date.
The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets:
 DERIVATIVE ASSETS
BALANCE SHEET LOCATIONFEBRUARY 29,MAY 31,
(Dollars in millions)20242023
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and optionsPrepaid expenses and other current assets$312 $480 
Foreign exchange forwards and optionsDeferred income taxes and other assets66 64 
Interest rate swap contractsDeferred income taxes and other assets— 
Total derivatives formally designated as hedging instruments380 544 
Derivatives not designated as hedging instruments:
Foreign exchange forwards and optionsPrepaid expenses and other current assets12 13 
Total derivatives not designated as hedging instruments12 13 
TOTAL DERIVATIVE ASSETS$392 $557 
DERIVATIVE LIABILITIES
BALANCE SHEET LOCATIONFEBRUARY 29,MAY 31,
(Dollars in millions)20242023
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and optionsAccrued liabilities$121 $93 
Foreign exchange forwards and optionsDeferred income taxes and other liabilities17 52 
Interest rate swap contractsDeferred income taxes and other liabilities— 
Total derivatives formally designated as hedging instruments142 145 
Derivatives not designated as hedging instruments:
Foreign exchange forwards and optionsAccrued liabilities11 35 
Total derivatives not designated as hedging instruments11 35 
TOTAL DERIVATIVE LIABILITIES$153 $180 
 DERIVATIVE ASSETS
BALANCE SHEET LOCATIONFEBRUARY 28,MAY 31,
(Dollars in millions)20232022
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and optionsPrepaid expenses and other current assets$530 $639 
Foreign exchange forwards and optionsDeferred income taxes and other assets100 206 
Total derivatives formally designated as hedging instruments630 845 
Derivatives not designated as hedging instruments:
Foreign exchange forwards and optionsPrepaid expenses and other current assets21 30 
Embedded derivativesPrepaid expenses and other current assets
Total derivatives not designated as hedging instruments26 35 
TOTAL DERIVATIVE ASSETS$656 $880 
DERIVATIVE LIABILITIES
BALANCE SHEET LOCATIONFEBRUARY 28,MAY 31,
(Dollars in millions)20232022
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and optionsAccrued liabilities$93 $37 
Foreign exchange forwards and optionsDeferred income taxes and other liabilities64 11 
Total derivatives formally designated as hedging instruments157 48 
Derivatives not designated as hedging instruments:
Foreign exchange forwards and optionsAccrued liabilities19 28 
Embedded derivativesAccrued liabilities
Total derivatives not designated as hedging instruments21 29 
TOTAL DERIVATIVE LIABILITIES$178 $77 

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The following tables present the amounts in the Unaudited Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:
THREE MONTHS ENDED FEBRUARY 28,
20232022
(Dollars in millions)TOTALAMOUNT OF GAIN (LOSS)
ON CASH FLOW
HEDGE ACTIVITY
TOTALAMOUNT OF GAIN (LOSS)
ON CASH FLOW
HEDGE ACTIVITY
Revenues$12,390 $14 $10,871 $(22)
Cost of sales7,019 182 5,804 17 
Demand creation expense923 (1)854 — 
Other (income) expense, net(58)90 (94)45 
Interest expense (income), net(7)(2)53 (2)
NINE MONTHS ENDED FEBRUARY 28,
20232022
(Dollars in millions)TOTALAMOUNT OF GAIN (LOSS)
ON CASH FLOW
HEDGE ACTIVITY
TOTALAMOUNT OF GAIN (LOSS)
ON CASH FLOW
HEDGE ACTIVITY
Revenues$38,392 $$34,476 $(63)
Cost of sales21,695 464 18,500 (79)
Demand creation expense2,968 (4)2,789 
Other (income) expense, net(283)297 (235)56 
Interest expense (income), net22 (6)165 (5)
The following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income:

(Dollars in millions)
AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER
COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES
(1)
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE
INCOME (LOSS) INTO INCOME(1)
THREE MONTHS ENDED FEBRUARY 28,LOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
THREE MONTHS ENDED FEBRUARY 28,
2023202220232022
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options$30 $(37)Revenues$14 $(22)
Foreign exchange forwards and options(141)Cost of sales182 17 
Foreign exchange forwards and options— Demand creation expense(1)— 
Foreign exchange forwards and options(65)31 Other (income) expense, net90 45 
Interest rate swaps(2)
— — Interest expense (income), net(2)(2)
TOTAL DESIGNATED CASH FLOW HEDGES$(175)$(2)$283 $38 

(Dollars in millions)
AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER
COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES
(1)
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE
INCOME (LOSS) INTO INCOME(1)
THREE MONTHS ENDEDLOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
THREE MONTHS ENDED
FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options$(32)$30 Revenues$(10)$14 
Foreign exchange forwards and options135 (141)Cost of sales70 182 
Foreign exchange forwards and options— Demand creation expense(1)
Foreign exchange forwards and options49 (65)Other (income) expense, net52 90 
Interest rate swaps(2)
— — Interest expense (income), net(2)(2)
TOTAL DESIGNATED CASH FLOW HEDGES$152 $(175)$111 $283 
(1)For the three months ended February 29, 2024 and February 28, 2023, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.
(2)Gains and 2022,losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest expense (income), net over the term of the issued debt.

(Dollars in millions)
AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER
COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES
(1)
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE
INCOME (LOSS) INTO INCOME(1)
NINE MONTHS ENDEDLOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
NINE MONTHS ENDED
FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options$(55)$52 Revenues$(7)$
Foreign exchange forwards and options154 245 Cost of sales221 464 
Foreign exchange forwards and options(2)Demand creation expense(4)
Foreign exchange forwards and options78 181 Other (income) expense, net138 297 
Interest rate swaps(2)
— — Interest expense (income), net(6)(6)
TOTAL DESIGNATED CASH FLOW HEDGES$179 $476 $347 $760 
(1)For the nine months ended February 29, 2024 and February 28, 2023, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer 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 be released through Interest expense (income), net over the term of the issued debt.


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(Dollars in millions)
AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER
COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES
(1)
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE
INCOME (LOSS) INTO INCOME(1)
NINE MONTHS ENDED FEBRUARY 28,LOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
NINE MONTHS ENDED FEBRUARY 28,
2023202220232022
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options$52 $(74)Revenues$$(63)
Foreign exchange forwards and options245 522 Cost of sales464 (79)
Foreign exchange forwards and options(2)(3)Demand creation expense(4)
Foreign exchange forwards and options181 304 Other (income) expense, net297 56 
Interest rate swaps(2)
— — Interest expense (income), net(6)(5)
TOTAL DESIGNATED CASH FLOW HEDGES$476 $749 $760 $(90)
(1)For the nine months ended February 28, 2023 and 2022, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer 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 be released through Interest expense (income), net over the term of the issued debt.
AMOUNT OF GAIN (LOSS) RECOGNIZED
IN INCOME ON DERIVATIVES
LOCATION OF GAIN (LOSS)
RECOGNIZED IN INCOME
ON DERIVATIVES
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
AMOUNT OF GAIN (LOSS) RECOGNIZED
IN INCOME ON DERIVATIVES
AMOUNT OF GAIN (LOSS) RECOGNIZED
IN INCOME ON DERIVATIVES
LOCATION OF GAIN (LOSS)
RECOGNIZED IN INCOME
ON DERIVATIVES
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)2023202220232022LOCATION OF GAIN (LOSS)
RECOGNIZED IN INCOME
ON DERIVATIVES
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:
Foreign exchange forwards and options$(12)$(20)$32 $12 Other (income) expense, net
Embedded derivatives(14)— 20 (9)Other (income) expense, net
Derivatives not designated as hedging instruments:
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options and embedded derivatives
Foreign exchange forwards and options and embedded derivatives
Foreign exchange forwards and options and embedded derivatives$$(26)$(1)$52 Other (income) expense, net
CASH FLOW HEDGES
All changes in fair value of derivatives designated as cash flow hedge instruments are recorded in Accumulated other comprehensive income (loss) until Net income is affected by the variability of cash flows of the hedged transaction. Effective hedge results are classified in the Unaudited Condensed Consolidated Statements of Income in 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, hedge accounting is discontinued and the Company accounts for the associated derivative as an undesignated instrument as discussed below. Additionally, the gains and losses associated 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 forecasted hedged transaction will not occur by the end of the initially identified time period or within an additional two-month period thereafter. In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction 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 $19.5$17.6 billion as of February 28, 2023.29, 2024. Approximately $495$250 million of deferred net gains (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of February 28, 2023,29, 2024, are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Net income. Actual amounts ultimately reclassified to Net income are dependent on the exchange rates in effect when derivative contracts currently outstanding mature. As of February 28, 2023,29, 2024, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 27 months.
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FAIR VALUE HEDGES
TableThe total notional amount of Contents

outstanding interest rate swap contracts designated as fair value hedges was $901 million as of February 29, 2024.
UNDESIGNATED DERIVATIVE INSTRUMENTS
The Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities on the Unaudited Condensed Consolidated Balance Sheets and/or embedded derivative contracts. These undesignated instruments are recorded at fair value as a derivative asset or liability on the Unaudited Condensed Consolidated Balance Sheets with their corresponding change in fair value recognized in Other (income) expense, net, together with the remeasurement gain or loss from the hedged balance sheet position and/or embedded derivative contract. The total notional amount of outstanding undesignated derivative instruments was $4.7$3.9 billion as of February 28, 2023.29, 2024.
EMBEDDED DERIVATIVES
Embedded derivative contracts are treated as foreign currency forward contracts that are bifurcated from the related contract and recorded at fair value as a derivative asset or liability on the Unaudited Condensed Consolidated Balance Sheets with their corresponding change in fair value recognized in Other (income) expense, net, through the date the foreign currency fluctuations cease to exist.CREDIT RISK
As of February 28, 2023, the total notional amount of embedded derivatives outstanding was approximately $460 million.
CREDIT RISK
The Company's bilateral credit-related contingent features generally require the owing entity, either the Company or the derivative counterparty, to post collateral for the portion of the fair value in excess of $50 million should the fair value of outstanding derivatives per counterparty be greater than $50 million. Additionally, a certain level of decline in credit rating of either the Company or the counterparty could trigger collateral requirements. As of February 28, 2023,29, 2024, the Company was in compliance with all credit risk-related contingent features, and derivative instruments with such features were in a net asset position of approximately $475$239 million. Accordingly, the Company was not required to post cash collateral as a result of these contingent features. Further, $100$48 million of collateral was received on the Company's derivative asset balance as of February 28, 2023.29, 2024. The Company considers the impact of the risk of counterparty default to be immaterial.
For additional information related to the Company's derivative financial instruments and collateral, refer to Note 43 — Fair Value Measurements.
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NOTE 109 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in Accumulated other comprehensive income (loss), net of tax, were as follows:
(Dollars in millions)(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL
Balance at November 30, 2022$(392)$933 $115 $(97)$559 
Balance at November 30, 2023
Other comprehensive income (loss):Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
150 (179)— — (29)
Reclassifications to net income of previously deferred (gains) losses(3)
(254)— 23 (228)
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
Reclassifications to net income of previously deferred (gains) losses(2)
Total other comprehensive income (loss)Total other comprehensive income (loss)153 (433)— 23 (257)
Balance at February 28, 2023$(239)$500 $115 $(74)$302 
Balance at February 29, 2024
(1)The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
(2)Net of immaterial tax benefit (expense) of $0 million, $(4) million, $0 million, $1 million and $(3) million, respectively.impact.
(3)Net of tax (benefit) expense of $0 million, $29 million, $0 million, $(9) million and $20 million, respectively.
(Dollars in millions)(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL
Balance at November 30, 2021$(281)$369 $115 $(58)$145 
Balance at November 30, 2022
Other comprehensive income (loss):Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
(6)— (7)(9)
Reclassifications to net income of previously deferred (gains) losses(3)
— (33)— (4)(37)
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
Reclassifications to net income of previously deferred (gains) losses(2)
Total other comprehensive income (loss)Total other comprehensive income (loss)(6)(29)— (11)(46)
Balance at February 28, 2022$(287)$340 $115 $(69)$99 
Balance at February 28, 2023
(1)The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
(2)Net of immaterial tax benefit (expense) of $0 million, $6 million, $0 million, $2 million and $8 million, respectively.impact.
(3)Net of tax (benefit) expense of $0 million, $5 million, $0 million, $1 million and $6 million, respectively.
(Dollars in millions)(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL
Balance at May 31, 2022$(520)$779 $115 $(56)$318 
Balance at May 31, 2023
Other comprehensive income (loss):Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
(77)399 — (27)295 
Reclassifications to net income of previously deferred (gains) losses(3)
358 (678)— (311)
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
Reclassifications to net income of previously deferred (gains) losses(2)
Total other comprehensive income (loss)Total other comprehensive income (loss)281 (279)— (18)(16)
Balance at February 28, 2023$(239)$500 $115 $(74)$302 
Balance at February 29, 2024
(1)The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
(2)Net of immaterial tax benefit (expense) of $0 million, $(77) million, $0 million, $8 million and $(69) million, respectively.impact.
(3)
Net of tax (benefit) expense of $(16) million, $82 million, $0 million, $(3) million and $63 million, respectively.

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(Dollars in millions)(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHERTOTAL
Balance at May 31, 2021$2 $(435)$115 $(62)$(380)
Balance at May 31, 2022
Other comprehensive income (loss):Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
(289)689 — 407 
Reclassifications to net income of previously deferred (gains) losses(3)
— 86 — (14)72 
Other comprehensive gains (losses) before reclassifications(2)
Other comprehensive gains (losses) before reclassifications(2)
Reclassifications to net income of previously deferred (gains) losses(2)
Total other comprehensive income (loss)Total other comprehensive income (loss)(289)775 — (7)479 
Balance at February 28, 2022$(287)$340 $115 $(69)$99 
Balance at February 28, 2023
(1)The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
(2)Net of immaterial tax benefit (expense) of $0 million, $(60) million, $0 million, $(2) million and $(62) million, respectively.impact.
(3)Net of tax (benefit) expense of $0 million, $(4) million, $0 million, $5 million and $1 million, respectively.
The following table summarizes the reclassifications from Accumulated other comprehensive income (loss) to the Unaudited Condensed Consolidated Statements of Income:
AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOMELOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOMEAMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOMELOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)2023202220232022LOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS) INTO INCOME
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Gains (losses) on foreign currency translation adjustmentGains (losses) on foreign currency translation adjustment$(3)$— $(374)$— Gains (losses) on foreign currency translation adjustment$— $(3)$$(2)$(374)Other (income) expense, netOther (income) expense, net
Total before taxTotal before tax(3)— (374)— 
Tax (expense) benefitTax (expense) benefit— — 16 — 
Tax (expense) benefit
Tax (expense) benefit
Gain (loss) net of tax
Gain (loss) net of tax
Gain (loss) net of taxGain (loss) net of tax(3) (358) 
Gains (losses) on cash flow hedges:Gains (losses) on cash flow hedges:
Gains (losses) on cash flow hedges:
Gains (losses) on cash flow hedges:
Foreign exchange forwards and options
Foreign exchange forwards and options
Foreign exchange forwards and optionsForeign exchange forwards and options$14 $(22)$$(63)Revenues(10)14 14 (7)(7)RevenuesRevenues
Foreign exchange forwards and optionsForeign exchange forwards and options182 17 464 (79)Cost of salesForeign exchange forwards and options70 182 182 221 221 464 464 Cost of salesCost of sales
Foreign exchange forwards and optionsForeign exchange forwards and options(1)— (4)Demand creation expenseForeign exchange forwards and options(1)(1)(4)(4)Demand creation expenseDemand creation expense
Foreign exchange forwards and optionsForeign exchange forwards and options90 45 297 56 Other (income) expense, netForeign exchange forwards and options52 90 90 138 138 297 297 Other (income) expense, netOther (income) expense, net
Interest rate swapsInterest rate swaps(2)(2)(6)(5)Interest expense (income), netInterest rate swaps(2)(2)(2)(6)(6)(6)(6)Interest expense (income), netInterest expense (income), net
Total before taxTotal before tax283 38 760 (90)
Tax (expense) benefitTax (expense) benefit(29)(5)(82)
Tax (expense) benefit
Tax (expense) benefit
Gain (loss) net of taxGain (loss) net of tax254 33 678 (86)
Gain (loss) net of tax
Gain (loss) net of tax
Gains (losses) on other
Gains (losses) on other
Gains (losses) on otherGains (losses) on other(32)(12)19 Other (income) expense, net(9)(32)(32)(12)(12)Other (income) expense, netOther (income) expense, net
Total before taxTotal before tax(32)(12)19 
Tax (expense) benefitTax (expense) benefit(1)(5)
Tax (expense) benefit
Tax (expense) benefit
Gain (loss) net of tax
Gain (loss) net of tax
Gain (loss) net of taxGain (loss) net of tax(23)4 (9)14 
Total net gain (loss) reclassified for the periodTotal net gain (loss) reclassified for the period$228 $37 $311 $(72)
Total net gain (loss) reclassified for the period
Total net gain (loss) reclassified for the period
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NOTE 1110 — REVENUES
DISAGGREGATION OF REVENUES
The following tables present the Company's Revenues disaggregated by reportable operating segment, major product line and distribution channel:
THREE MONTHS ENDED FEBRUARY 28, 2023
THREE MONTHS ENDED FEBRUARY 29, 2024THREE MONTHS ENDED FEBRUARY 29, 2024
(Dollars in millions)(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$3,322 $2,011 $1,496 $1,141 $— $7,970 $540 $— $8,510 
ApparelApparel1,419 1,094 461 407 — 3,381 29 — 3,410 
EquipmentEquipment172 141 37 53 — 403 — 409 
OtherOther— — — — 12 12 37 12 61 
TOTAL REVENUESTOTAL REVENUES$4,913 $3,246 $1,994 $1,601 $12 $11,766 $612 $12 $12,390 
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$2,323 $2,061 $1,126 $913 $— $6,423 $323 $— $6,746 
Sales to Wholesale Customers
Sales to Wholesale Customers
Sales through Direct to ConsumerSales through Direct to Consumer2,590 1,185 868 688 — 5,331 252 — 5,583 
OtherOther— — — — 12 12 37 12 61 
TOTAL REVENUESTOTAL REVENUES$4,913 $3,246 $1,994 $1,601 $12 $11,766 $612 $12 $12,390 

THREE MONTHS ENDED FEBRUARY 28, 2022
THREE MONTHS ENDED FEBRUARY 28, 2023THREE MONTHS ENDED FEBRUARY 28, 2023
(Dollars in millions)(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$2,532 $1,569 $1,554 $1,005 $— $6,660 $503 $— $7,163 
ApparelApparel1,207 1,083 548 394 — 3,232 29 — 3,261 
EquipmentEquipment143 127 58 62 — 390 — 397 
OtherOther— — — — 41 41 28 (19)50 
TOTAL REVENUESTOTAL REVENUES$3,882 $2,779 $2,160 $1,461 $41 $10,323 $567 $(19)$10,871 
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$1,769 $1,858 $1,241 $860 $— $5,728 $303 $— $6,031 
Sales to Wholesale Customers
Sales to Wholesale Customers
Sales through Direct to ConsumerSales through Direct to Consumer2,113 921 919 601 — 4,554 236 — 4,790 
OtherOther— — — — 41 41 28 (19)50 
TOTAL REVENUESTOTAL REVENUES$3,882 $2,779 $2,160 $1,461 $41 $10,323 $567 $(19)$10,871 

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NINE MONTHS ENDED FEBRUARY 28, 2023
NINE MONTHS ENDED FEBRUARY 29, 2024NINE MONTHS ENDED FEBRUARY 29, 2024
(Dollars in millions)(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$11,090 $6,086 $4,099 $3,313 $— $24,588 $1,633 $— $26,221 
ApparelApparel4,598 3,528 1,228 1,255 — 10,609 70 — 10,679 
EquipmentEquipment565 454 111 167 — 1,297 21 — 1,318 
OtherOther— — — — 44 44 117 13 174 
TOTAL REVENUESTOTAL REVENUES$16,253 $10,068 $5,438 $4,735 $44 $36,538 $1,841 $13 $38,392 
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$8,533 $6,506 $2,862 $2,792 $— $20,693 $971 $— $21,664 
Sales to Wholesale Customers
Sales to Wholesale Customers
Sales through Direct to ConsumerSales through Direct to Consumer7,720 3,562 2,576 1,943 — 15,801 753 — 16,554 
OtherOther— — — — 44 44 117 13 174 
TOTAL REVENUESTOTAL REVENUES$16,253 $10,068 $5,438 $4,735 $44 $36,538 $1,841 $13 $38,392 

NINE MONTHS ENDED FEBRUARY 28, 2022
NINE MONTHS ENDED FEBRUARY 28, 2023NINE MONTHS ENDED FEBRUARY 28, 2023
(Dollars in millions)(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$8,648 $5,358 $4,238 $2,914 $— $21,158 $1,555 $— $22,713 
ApparelApparel4,117 3,444 1,588 1,181 — 10,330 87 — 10,417 
EquipmentEquipment473 426 160 178 — 1,237 21 — 1,258 
OtherOther— — — — 54 54 90 (56)88 
TOTAL REVENUESTOTAL REVENUES$13,238 $9,228 $5,986 $4,273 $54 $32,779 $1,753 $(56)$34,476 
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$6,774 $6,194 $3,251 $2,571 $— $18,790 $975 $— $19,765 
Sales to Wholesale Customers
Sales to Wholesale Customers
Sales through Direct to ConsumerSales through Direct to Consumer6,464 3,034 2,735 1,702 — 13,935 688 — 14,623 
OtherOther— — — — 54 54 90 (56)88 
TOTAL REVENUESTOTAL REVENUES$13,238 $9,228 $5,986 $4,273 $54 $32,779 $1,753 $(56)$34,476 
For the three and nine months ended February 29, 2024 and three and nine months ended February 28, 2023, and 2022, Global Brand Divisions revenues included NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Converse Other revenues were primarily attributable to licensing businesses. Corporate revenues primarily consisted of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through the Company's central foreign exchange risk management program.
As of February 28, 202329, 2024 and May 31, 2022,2023, the Company did not have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets.
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NOTE 1211 — OPERATING SEGMENTS
The Company's operating segments are evidence of the structure of the Company's internal organization. The NIKE Brand segments are defined by geographic regions for operations participating in NIKE Brand sales activity.
Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment. The Company's reportable operating segments for the NIKE Brand are: North America; Europe, Middle East & Africa (EMEA)("EMEA"); Greater China; and Asia Pacific & Latin America (APLA)("APLA"), and include results for the NIKE and Jordan brands.
The Company's NIKE Direct operations are managed within each NIKE Brand geographic operating segment. Converse is also a reportable segment for the Company and 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 presentation purposes to align with the way management views the Company. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Global Brand Divisions costs represent demand creation and operating overhead expense that include product creation and design expenses centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology.
Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses. For the three and nine months ended February 29, 2024, Corporate also includes pre-tax restructuring charges recognized as a result of the Company taking steps to streamline the organization. These pre-tax charges primarily reflect employee severance costs and accelerated stock-based compensation expense. For more information, refer to Note 14 — Restructuring.
The primary financial measure used by the Company to evaluate performance of individual operating segments is earnings before interest and taxes (EBIT)("EBIT"), which represents Net income before Interest expense (income), net, and Income tax expensetaxes in the Unaudited Condensed Consolidated Statements of Income.
As part of the Company's centrally managed foreign exchange risk management program, standard foreign currency rates are assigned twice per year to each NIKE Brand entity in the Company's geographic operating segments and to Converse. These rates are set approximately nine and twelve months in advance of the future selling seasons to which they relate (specifically, for each currency, one standard rate applies to the fall and holiday selling seasons, and one standard rate applies to the spring and summer selling seasons) based on average market spot rates in the calendar month preceding the date they are established. Inventories and Cost of sales for geographic operating segments and Converse reflect the use of these standard rates to record non-functional currency product purchases in the entity's functional currency. Differences between assigned standard foreign currency rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses generated from the Company's 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 are therefore provided below.

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 THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
REVENUES
North America$5,070 $4,913 $16,118 $16,253 
Europe, Middle East & Africa3,138 3,246 10,315 10,068 
Greater China2,084 1,994 5,682 5,438 
Asia Pacific & Latin America1,647 1,601 5,024 4,735 
Global Brand Divisions12 34 44 
Total NIKE Brand11,948 11,766 37,173 36,538 
Converse495 612 1,602 1,841 
Corporate(14)12 (19)13 
TOTAL NIKE, INC. REVENUES$12,429 $12,390 $38,756 $38,392 
EARNINGS BEFORE INTEREST AND TAXES
North America$1,400 $1,190 $4,360 $4,064 
Europe, Middle East & Africa734 785 2,591 2,750 
Greater China722 702 1,761 1,754 
Asia Pacific & Latin America471 485 1,406 1,470 
Global Brand Divisions(1,199)(1,160)(3,572)(3,573)
Converse98 164 380 526 
Corporate(874)(696)(2,060)(2,014)
Interest expense (income), net(52)(7)(108)22 
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES$1,404 $1,477 $4,974 $4,955 
FEBRUARY 29,MAY 31,
(Dollars in millions)20242023
ACCOUNTS RECEIVABLE, NET
North America$1,872 $1,653 
Europe, Middle East & Africa1,336 1,197 
Greater China197 162 
Asia Pacific & Latin America750 700 
Global Brand Divisions96 96 
Total NIKE Brand4,251 3,808 
Converse219 235 
Corporate56 88 
TOTAL ACCOUNTS RECEIVABLE, NET$4,526 $4,131 
INVENTORIES
North America$3,201 $3,806 
Europe, Middle East & Africa2,046 2,167 
Greater China1,121 973 
Asia Pacific & Latin America889 894 
Global Brand Divisions180 232 
Total NIKE Brand7,437 8,072 
Converse289 305 
Corporate— 77 
TOTAL INVENTORIES(1)
$7,726 $8,454 

(1)
 THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)2023202220232022
REVENUES
North America$4,913 $3,882 $16,253 $13,238 
Europe, Middle East & Africa3,246 2,779 10,068 9,228 
Greater China1,994 2,160 5,438 5,986 
Asia Pacific & Latin America1,601 1,461 4,735 4,273 
Global Brand Divisions12 41 44 54 
Total NIKE Brand11,766 10,323 36,538 32,779 
Converse612 567 1,841 1,753 
Corporate12 (19)13 (56)
TOTAL NIKE, INC. REVENUES$12,390 $10,871 $38,392 $34,476 
EARNINGS BEFORE INTEREST AND TAXES
North America$1,190 $967 $4,064 $3,636 
Europe, Middle East & Africa785 713 2,750 2,394 
Greater China702 784 1,754 2,054 
Asia Pacific & Latin America485 478 1,470 1,347 
Global Brand Divisions(1,160)(975)(3,573)(3,033)
Converse164 168 526 504 
Corporate(696)(412)(2,014)(1,460)
Interest expense (income), net(7)53 22 165 
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES$1,477 $1,670 $4,955 $5,277 
FEBRUARY 28,MAY 31,
(Dollars in millions)20232022
ACCOUNTS RECEIVABLE, NET
North America$1,718 $1,850 
Europe, Middle East & Africa1,392 1,351 
Greater China294 406 
Asia Pacific & Latin America(1)
707 664 
Global Brand Divisions81 113 
Total NIKE Brand4,192 4,384 
Converse263 230 
Corporate58 53 
TOTAL ACCOUNTS RECEIVABLE, NET$4,513 $4,667 
INVENTORIES
North America$4,054 $4,098 
Europe, Middle East & Africa2,066 1,887 
Greater China1,060 1,044 
Asia Pacific & Latin America(1)
957 686 
Global Brand Divisions219 197 
Total NIKE Brand8,356 7,912 
Converse343 279 
Corporate206 229 
TOTAL INVENTORIES$8,905 $8,420 
Inventories as of February 29, 2024 and May 31, 2023, were substantially all finished goods.
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FEBRUARY 28,MAY 31,
(Dollars in millions)20232022
PROPERTY, PLANT AND EQUIPMENT, NET
North America$733 $639 
Europe, Middle East & Africa966 920 
Greater China293 303 
Asia Pacific & Latin America(1)
272 274 
Global Brand Divisions802 789 
Total NIKE Brand3,066 2,925 
Converse39 49 
Corporate1,834 1,817 
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET$4,939 $4,791 
(1)Excludes assets held-for-sale as of May 31, 2022. See Note 14 — Acquisitions and Divestitures for additional information.
FEBRUARY 29,MAY 31,
(Dollars in millions)20242023
PROPERTY, PLANT AND EQUIPMENT, NET
North America$760 $794 
Europe, Middle East & Africa1,068 1,009 
Greater China264 292 
Asia Pacific & Latin America292 279 
Global Brand Divisions886 840 
Total NIKE Brand3,270 3,214 
Converse30 38 
Corporate1,782 1,829 
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET$5,082 $5,081 
NOTE 1312 — CONTINGENCIES
In the ordinary course of business, the Company is subject to various legal proceedings, claims and government investigations relating to its business, products and actions of its employees and representatives, including contractual and employment relationships, product liability, antitrust, customs, tax, intellectual property and other matters. The outcome of these legal matters is inherently uncertain, and the Company cannot predict the eventual outcome of currently pending matters, the timing of their 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 probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter. If one or more legal matters were to be resolved against the Company in a reporting period for amounts above management's expectations, the Company's financial position, operating results and cash flows for that reporting period could be materially adversely affected. In the opinion of management, based on its current knowledge and after consultation with counsel, the Company does not believe any currently pending legal matters will have a material adverse impact on the Company's results of operations, financial position or cash flows, except as described below.
BELGIAN CUSTOMS CLAIM
The Company has received claims for certain years from the Belgian Customs Authoritiesand other government authorities for alleged underpaid duties related to products imported beginning in fiscal 2018. The Company disputes these claims and has engaged in the appellate process. The Company has issued bank guarantees in order to appeal the 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 on this matter. If this matter is ultimately resolved against the Company, the amounts owed, including fines, penalties and other consequences relating to the matter, could have a material adverse effect on the Company's results of operations, financial position and cash flows.
NOTE 14NOTE 13 — ACQUISITIONS AND DIVESTITURES
During the fourthsecond quarter of fiscal 2022,2023, the Company entered into separate definitive agreements to sell its entities in Argentina and Uruguay, as well as its entity in Chile, to third-party distributors.
The sale of the Company’s entity in Chile to a third-party distributor was completed during the first quarter of fiscal 2023. The impacts from the transaction were not material to the Company’s Unaudited Condensed Consolidated Financial Statements.
The sale of the Company's entities in Argentina and Uruguay to a third-party distributor was completed during the second quarter of fiscal 2023 and the net loss on the sale of these entities totaled approximately $550 million. This loss included $389 million, recognized primarily in fiscal 2020, largely due to the anticipated release of the cumulative foreign currency translation losses. The remaining loss recognized in fiscal 2023 was due to the devaluation of local currency and cash equivalents included in the transferred assets. Upon completion of the sale, the foreign currency translation losses recorded in Accumulated other comprehensive income (loss) were reclassified to Net income within Other (income) expense, net, on the Unaudited Condensed Consolidated Statements of Comprehensive Income along with the allowance for previously recognized losses recorded in Accrued liabilities. The net loss was classified within Corporate.
The net cash proceeds received are reflected within Other investing activities on the Unaudited Condensed Consolidated Statements of Cash Flows.
The related assets and liabilities of these entities within the Company’s APLA operating segment were classified as held-for-sale on the Consolidated Balance Sheets within Prepaid expenses and other current assets and Accrued liabilities, respectively, until the transactions closed. As of May 31, 2022, held-for-sale assets were $182 million and held-for-sale liabilities were $58 million.
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NOTE 14 — RESTRUCTURING
During the third quarter of fiscal 2024, the Company announced a multi-year enterprise initiative designed to accelerate its future growth. As part of this initiative, management is taking steps to streamline the organization which will include a net reduction in the Company's global workforce. As of February 29, 2024, the Company expects to recognize pre-tax restructuring charges of approximately $450 million, primarily associated with employee severance costs and accelerated stock-based compensation expense, the majority of which are expected to be recognized by the end of fiscal 2024. The related cash payments are expected to take place through the first half of fiscal 2025. The expected pre-tax charges are estimates and are subject to a number of assumptions and actual results may vary from the estimates provided.
During the third quarter of fiscal 2024, the Company recognized pre-tax restructuring charges of $403 million. These charges were classified within Corporate as follows:
 THREE MONTHS ENDED FEBRUARY 29, 2024
(Dollars in millions)OPERATING OVERHEAD EXPENSECOST OF SALESTOTAL
Employee severance and related costs(1)
$319 $60 $379 
Stock-based compensation expense(2)
21 24 
Total pre-tax restructuring charges$340 $63 $403 
(1)Employee severance costs are recognized when a future related expense is considered probable and reasonably estimable.
(2)Non-cash restructuring related stock-based compensation expense is accelerated over the requisite service period, which for certain impacted employees could extend through the first half of fiscal 2025.

As of February 29, 2024, a majority of the $379 million of employee severance and related costs are reflected within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets, classified within Other in Note 2 — Accrued Liabilities, and an immaterial amount is reflected within Accounts payable. As of February 29, 2024, the Company has not made any cash payments related to this activity.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
NIKE designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide. We are the largest seller of athletic footwear and apparel in the world. We sell our products through NIKE Direct operations, which is comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital"), to retailwholesale accounts and to a mix of independent distributors, licensees and sales representatives in virtuallynearly all countries around the world. Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories businesses. Our strategy is to achieve long-term revenue growth by creating innovative, “must-have”"must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.
Through theThe Consumer Direct Acceleration we are focusing on creatingstrategy, which launched in July 2020, has driven revenue growth and millions of new connections with our consumers, and shifted the marketplacemix of the future through more premium, consistent and seamless consumer experiences, leading with digital andour business toward our owned stores as well as select wholesale partners that shareand digital platforms. To holistically serve all of our consumers across the marketplace, vision. Over the last several years, as we have executed against the Consumer Direct Acceleration, we have grownexpect to continue to invest in our NIKE Direct revenues, on a reported basis,operations while also increasing investment to be approximately 45%elevate and 43% of total NIKE Brand revenues for the third quarter and first nine months of fiscal 2023, respectively. We have also reduced the number ofdifferentiate our brand experience within our wholesale accounts globally. Additionally, we have alignedpartners. In addition, our product creation and categorymarketing organizations aroundare aligned to a new consumer construct focused on Men’s, Women’ssports dimensions through Men's, Women's and Kids’Kids', which allows us to better serve consumer needs. We also remain focused on accelerating our pace of innovation and maximizing the impact of our storytelling.
We continue to invest in a global Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering inventory management and other areas to create an end-to-end technology foundation, which we expect will further accelerate our digital transformation.foundation. We believe this unified approach will accelerate growth and unlock more efficiency for our business, while driving speed and responsiveness as we serve consumers globally.globally across the marketplace.
CURRENT ECONOMIC CONDITIONS AND MARKET DYNAMICSQUARTERLY FINANCIAL HIGHLIGHTS
NIKE, Inc. Revenues for the third quarter and first nine months of fiscal 2023 grew 14% and 11%, respectively, compared to the prior year, reflecting strong demand for our product, despite ongoing macroeconomic volatility and ongoing supply chain challenges.
In the first quarter of fiscal 2022, government mandated shutdowns in Vietnam and Indonesia due to COVID-19 impacted our contract manufacturers’ operations and our supply of available product. This, coupled with elevated inventory transit times due to port congestion, transportation delays and labor and container shortages, caused seasonal product to arrive later than planned. We expected these elevated inventory transit times to continue and as a result we purchased product for fiscal 2023 earlier than normal.
However, during the first quarter of fiscal 2023, inventory transit times improved ahead of plan resulting in seasonal product arriving early. This disruption in the flow of seasonal inventory led to elevated inventory levels at the end of the first quarter of fiscal 2023.
Starting in the first quarter of fiscal 2023, we took action to reduce excess inventory by decreasing inventory purchases and increasing promotional activity. These actions led to Inventories decreasing sequentially in the second and third quarters of fiscal 2023.
As inventory transit and product purchase timelines continue to converge towards pre-pandemic levels, we expect that the flow of seasonal product, and our inventory levels will normalize by the end of fiscal 2023.
During the first nine months of fiscal 2023, we experienced higher product input, freight and logistics costs primarily due to inflationary pressures. These costs, combined with higher promotional activity, contributed to gross margin contraction of 330 basis points and 280 basis points in the third quarter and first nine months of fiscal 2023, respectively. These impacts2024 were partially offset by strategic pricing actions taken in prior quarters.
Fluctuations in currency exchange rates also create volatility in our reported results as we translate the balance sheets, operational results and cash flows of our subsidiaries into U.S. Dollars for consolidated reporting. During the third quarter of fiscal 2023, foreign currency headwinds increased significantly as the U.S. Dollar strengthened in relation to most foreign currencies, reducing reported Revenues by $549 million and $2.5 billion for the third quarter and first nine months of fiscal 2023, respectively.
We expect unfavorable changes in foreign currency exchange rates, net of hedges, will negatively impact our results of operations in the fourth quarter of fiscal 2023, which could result in continued gross margin contraction.
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Most of our geographies operated with little to no COVID-19 related disruptions during the third quarter of fiscal 2023. In Greater China, however, the shifting of the local government’s COVID-19 policies in December 2022 led to temporary store closures as well as lower physical traffic during the month. Since January 2023, nearly all stores in Greater China have remained open and are operating on normal hours with improved physical traffic.
Across our geographies and Converse, the operating environment remains dynamic, and we expect promotional activity to continue in the fourth quarter of fiscal 2023. In addition, we expect product costs to remain elevated due to higher input, freight and logistics costs, which could result in continued gross margin contraction.
We also continue to closely monitor macroeconomic conditions, including potential impacts inflation and rising interest rates could have on consumer behavior. While we believe our Consumer Direct Acceleration Strategy continues to drive our business toward our long-term financial goals, worsening macroeconomic conditions could affect our business, including, among other things, higher inventory levels in various markets, higher inventory obsolescence reserves, higher promotional activity, reduced demand for our products, reduced orders from our wholesale customers for our products and order cancellations. There could also be new or prolonged COVID-19 related restrictions or disruptions across our geographies. Any of these factors, among others, could have material adverse impacts on our revenue growth as well as overall profitability in future periods.
THIRD QUARTER OVERVIEW
For the third quarter of fiscal 2023, NIKE, Inc. Revenues increased 14% to $12.4$12.43 billion compared to the third quarter of fiscal 2022 and increased 19% on a currency-neutral basis. Net income was $1,240 million and diluted earnings per common share was $0.79$12.39 billion for the third quarter of fiscal 2023 compared to Net income of $1,396 million and diluted earnings per common share of $0.87
NIKE Direct revenues were $5.4 billion for the third quarter of fiscal 2022.
Income before income taxes decreased 12%2024 compared to the third quarter of fiscal 2022 due to higher Selling and administrative expense and gross margin contraction, partially offset by higher revenues. NIKE Brand revenues, which represent over 90% of NIKE, Inc. Revenues, increased 14% compared to the third quarter of fiscal 2022. On a currency-neutral basis, NIKE Brand revenues increased 19%, driven by higher revenues across all geographies, led by increases in North America and Europe, Middle East & Africa (EMEA). Additionally, NIKE Brand currency-neutral revenues were higher across footwear and apparel, as well as across Men's, the Jordan Brand, Women's and Kids'. Revenues for Converse increased 8% and 12% compared to the third quarter of fiscal 2022, on a reported and currency-neutral basis, respectively, as revenue growth in North America, Western Europe and licensee markets was partially offset by declines in Asia.
Our effective tax rate was 16.0%$5.3 billion for the third quarter of fiscal 2023, and substantially consistent compared to 16.4%represented approximately 45% of total NIKE Brand revenues
Gross margin for the third quarter of fiscal 2022.2024 increased 150 basis points to 44.8%, primarily driven by strategic pricing actions and lower ocean freight rates and logistics costs, partially offset by higher product input costs and restructuring charges
On August 16, 2022,Inventories as of February 29, 2024, were $7.7 billion, a decrease of 9% compared to May 31, 2023, primarily driven by a decrease in units
We returned approximately $1.4 billion to our shareholders in the U.S. government enactedthird quarter of fiscal 2024 through share repurchases and dividends
ECONOMIC CONDITIONS AND MARKET DYNAMICS
Consumer Spending: During the Inflation Reduction Actthird quarter of 2022 that includes, among other provisions, changesfiscal 2024, consumers continued to the U.S. corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income," which is effective for NIKE beginning June 1, 2023. Based onspend more cautiously and promotional activity remained high across our current analysis of the provisions,industry. In this environment, we do not expect these tax law changescontinue to have a material impact onexperience lower digital traffic and moderation in our financial statements; however, werevenue growth. We will continue to evaluate theirmonitor macroeconomic conditions, including the potential impacts of inflation and higher interest rates on consumer behavior.
Cost Inflationary Pressures: Inflationary pressures, including higher product input costs, continued to negatively impact our gross margin. These negative impacts on gross margin were more than offset by strategic pricing actions we have taken through the third quarter of fiscal 2024, as further information becomes available.
Duringwell as improvements in ocean freight rates and logistics costs we started to realize at the beginning of the second quarter of fiscal 2023,2024.
Supply Chain Conditions: During the first nine months of fiscal 2024 and as of February 29, 2024, our inventory levels were healthy and reflected our proactive actions taken to manage our inventory supply. In addition, we completedcontinued to experience normalized inventory transit times and flow of seasonal product.
Foreign Currency Impacts: As a global company with significant operations outside the sale of our entitiesUnited States, we are exposed to risk arising from changes in Argentinaforeign currency exchange rates. For additional information, refer to "Foreign Currency Exposures and Uruguay to a third party distributor. For more information see Note 14 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. Now that we have completed the shift from a wholesale and direct to consumer operating model to a distributor model within our Central and South America (CASA) territory, we expect consolidated NIKE, Inc. and Asia Pacific & Latin America (APLA) revenue growth will be reduced due to different commercial terms. However, over time we expect the future operating model to have a favorable impact on our overall profitability as we reduce selling and administrative expenses, as well as reduce exposure to foreign exchange rate volatility.Hedging Practices".
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The operating environment could remain volatile in the fourth quarter of fiscal 2024, and the risk exists that the worsening of macroeconomic conditions could have a material adverse impact on our revenue growth as well as overall profitability. We continue to be confident in our brand strength and deep consumer connections. We will also continue to focus on driving gross margin expansion and disciplined cost control while managing the health of our most iconic franchises.
RECENT DEVELOPMENTS
In December 2023, we announced an enterprise initiative designed to accelerate our future growth. As part of this initiative, we are taking steps to streamline the organization. These changes will result in a net reduction of our global workforce. We expect a majority of the future annual wage savings from these actions will be reinvested in consumer facing activities to drive greater impact for our consumers, sports dimensions and the total marketplace.
As of February 29, 2024, we expect to recognize pre-tax charges of approximately $450 million, primarily associated with employee severance costs and accelerated stock-based compensation expense, the majority of which will be recognized by the end of fiscal 2024. The related cash payments are expected to take place through the first half of fiscal 2025. The expected pre-tax charges are estimates and subject to a number of assumptions. Actual results may differ from current estimates.
During the third quarter of fiscal 2024, we incurred pre-tax charges of $403 million, primarily associated with employee severance costs and accelerated stock-based compensation expense. For more information, refer to Note 14 — Restructuring within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
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RESULTS OF OPERATIONS
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions, except per share data)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
Revenues$12,429 $12,390 %$38,756 $38,392 %
Cost of sales6,867 7,019 -2 %21,503 21,695 -1 %
Gross profit5,562 5,371 %17,253 16,697 %
Gross margin44.8 %43.3 %44.5 %43.5 %
Demand creation expense1,011 923 10 %3,194 2,968 %
Operating overhead expense3,215 3,036 %9,294 9,035 %
Total selling and administrative expense4,226 3,959 %12,488 12,003 %
% of revenues34.0 %32.0 %32.2 %31.3 %
Interest expense (income), net(52)(7)— (108)22 — 
Other (income) expense, net(16)(58)— (101)(283)— 
Income before income taxes1,404 1,477 -5 %4,974 4,955 %
Income tax expense232 237 -2 %774 916 -16 %
Effective tax rate16.5 %16.0 %15.6 %18.5 %
NET INCOME$1,172 $1,240 -5 %$4,200 $4,039 4 %
Diluted earnings per common share$0.77 $0.79 -3 %$2.74 $2.57 %
CONSOLIDATED OPERATING RESULTS
REVENUES
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
NIKE, Inc. Revenues:
NIKE Brand Revenues by:
Footwear$8,162 $7,970 %%$25,190 $24,588 %%
Apparel3,290 3,381 -3 %-3 %10,452 10,609 -1 %-2 %
Equipment487 403 21 %20 %1,497 1,297 15 %14 %
Global Brand Divisions(2)
12 -25 %-22 %34 44 -23 %-24 %
Total NIKE Brand Revenues11,948 11,766 2 %2 %37,173 36,538 2 %2 %
Converse495 612 -19 %-20 %1,602 1,841 -13 %-14 %
Corporate(3)
(14)12 — — (19)13 — — 
TOTAL NIKE, INC. REVENUES$12,429 $12,390 0 %0 %$38,756 $38,392 1 %1 %
Supplemental NIKE Brand Revenues Details:
NIKE Brand Revenues by:
Sales to Wholesale Customers$6,588 $6,423 %%$20,689 $20,693 %%
Sales through NIKE Direct5,351 5,331 %%16,450 15,801 %%
Global Brand Divisions(2)
12 -25 %-22 %34 44 -23 %-24 %
TOTAL NIKE BRAND REVENUES$11,948 $11,766 2 %2 %$37,173 $36,538 2 %2 %
(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 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 Converse, but managed through our central foreign exchange risk management program.

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THIRD QUARTER OF FISCAL 2024 COMPARED TO THIRD QUARTER OF FISCAL 2023
NIKE, Inc. Revenues for the third quarter of fiscal 2024 were $12.43 billion compared to $12.39 billion for the third quarter of fiscal 2023. On a currency-neutral basis, NIKE, Inc. revenues were flat, as higher revenues in North America and Greater China, which each increased NIKE, Inc. Revenues by approximately 1 percentage point, were offset by lower revenues in Europe, Middle East & Africa ("EMEA") and Converse, which each reduced NIKE, Inc. Revenues by approximately 1 percentage point.
NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 2% on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was due to higher revenues in Men's, Kids', Women's and the Jordan Brand.
NIKE Brand footwear revenues increased 3% on a currency-neutral basis due to higher revenues in Men's, Women's, Kids' and the Jordan Brand. Unit sales of footwear increased 2%, while higher average selling price ("ASP") per pair contributed approximately 1 percentage point of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, partially offset by lower NIKE Direct ASP.
NIKE Brand apparel revenues decreased 3% on a currency-neutral basis due to lower revenues in Men's and Women's, partially offset by higher revenues in Kids'. Unit sales of apparel decreased 8%, while higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price, off-price and NIKE Direct ASPs.
NIKE Brand wholesale revenues increased 3% compared to the third quarter of fiscal 2023, on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was driven by higher revenues in Greater China, North America and Asia Pacific & Latin America ("APLA"), partially offset by lower revenues in EMEA.
NIKE Direct revenues were $5.4 billion in the third quarter of fiscal 2024, compared to $5.3 billion for the third quarter of fiscal 2023. On a currency-neutral basis, NIKE Direct revenues were flat, driven by comparable store sales growth of 3% and the addition of new stores, offset by NIKE Brand Digital sales declines of 4%. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales". NIKE Brand Digital sales were $3.0 billion for the third quarter of fiscal 2024 compared to $3.1 billion for the third quarter of fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-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 on our Unaudited Condensed Consolidated Financial Statements.
FIRST NINE MONTHSOF FISCAL 2024 COMPARED TO FIRST NINE MONTHSOF FISCAL 2023
NIKE, Inc. Revenues were $38.8 billion for the first nine months of fiscal 2024, which increased 1% compared to the first nine months of fiscal 2023 on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was driven by higher revenues in Greater China and APLA, which each contributed approximately 1 percentage point to NIKE, Inc. Revenues. Lower revenues for Converse reduced NIKE, Inc. Revenues by approximately 1 percentage point.
NIKE Brand revenues, which represented over 90% of NIKE, Inc. Revenues, increased 2% on a reported and currency-neutral basis. The increase, on a currency-neutral basis, was primarily due to higher revenues in the Jordan Brand, partially offset by lower revenues in Men's and Kids'.
NIKE Brand footwear revenues increased 2% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand and Women's, partially offset by lower revenues in Kids'. Unit sales of footwear decreased 2%, while higher ASP per pair contributed approximately 4 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.
NIKE Brand apparel revenues decreased 2% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's. Unit sales of apparel decreased 12%, while higher ASP per unit contributed approximately 10 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
NIKE Brand wholesale revenues were flat compared to the first nine months of fiscal 2023, on a reported and currency-neutral basis, as higher revenues in Greater China and APLA were offset by lower revenues in North America and EMEA.
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NIKE Direct revenues increased 4%, on a reported basis, from $15.8 billion for the first nine months of fiscal 2023 to $16.5 billion for the first nine months of fiscal 2024. On a currency-neutral basis, NIKE Direct revenues increased 4%, primarily driven by comparable store sales growth of 6% and the addition of new stores. NIKE Brand Digital sales were $9.4 billion for the first nine months of fiscal 2024 compared to $9.3 billion for the first nine monthsof fiscal 2023. Within NIKE Direct revenues, there were certain reclassifications made between NIKE-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 on our Unaudited Condensed Consolidated Financial Statements.
GROSS MARGIN
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
Gross profit$5,562 $5,371 %$17,253 $16,697 %
Gross margin44.8 %43.3 %150 bps44.5 %43.5 %100 bps
THIRD QUARTER OF FISCAL 2024 COMPARED TO THIRD QUARTER OF FISCAL 2023
For the third quarter of fiscal 2024, our consolidated gross margin was 150 basis points higher than the prior year due to:
Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 180 basis points), primarily due to strategic pricing actions;
Lower NIKE Brand product costs, on a wholesale equivalent basis (increasing gross margin approximately 50 basis points), primarily due to lower ocean freight rates and logistics costs, partially offset by higher product input costs;
Lower other costs, including warehousing costs (increasing gross margin approximately 50 basis points); and
Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 10 basis points).
This was partially offset by:
Lower margin in our NIKE Direct business (decreasing gross margin approximately 50 basis points);
Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 40 basis points); and
Restructuring charges (decreasing gross margin approximately 50 basis points).
FIRST NINE MONTHSOF FISCAL 2024 COMPARED TO FIRST NINE MONTHSOF FISCAL 2023
For the first nine months of fiscal 2024, our consolidated gross margin was 100 basis points higher than the prior year due to:
Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 270 basis points), primarily due to strategic pricing actions; and
Lower other costs (increasing gross margin approximately 10 basis points).
This was partially offset by:
Higher NIKE Brand product costs, on a wholesale equivalent basis (decreasing gross margin approximately 60 basis points), primarily due to higher product input costs largely offset by lower ocean freight rates and logistics costs; and
Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 50 basis points); and
Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 30 basis points);
Restructuring charges (decreasing gross margin approximately 20 basis points); and
Lower margin in our NIKE Direct business (decreasing gross margin approximately 20 basis points).
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TOTAL SELLING AND ADMINISTRATIVE EXPENSE
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
Demand creation expense(1)
$1,011 $923 10 %$3,194 $2,968 %
Operating overhead expense3,215 3,036 %9,294 9,035 %
Total selling and administrative expense$4,226 $3,959 %$12,488 $12,003 %
% of revenues34.0 %32.0 %200 bps32.2 %31.3 %90 bps
(1)Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary products, television, digital and print advertising and media costs, brand events and retail brand presentation.
THIRD QUARTER OF FISCAL 2024 COMPARED TO THIRD QUARTER OF FISCAL 2023
Demand creation expense increased 10% reflecting an increase in marketing expense, primarily due to higher advertising and marketing expense and higher sports marketing expense. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Operating overhead expense increased 6% primarily due to restructuring charges, partially offset by lower wage-related expenses and technology spend. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHSOF FISCAL 2023
Demand creation expense increased 8% reflecting an increase in marketing expense, primarily due to higher advertising and marketing expense, higher sports marketing expense and higher digital marketing. Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.
Operating overhead expense increased 3% primarily due to restructuring charges, partially offset by lower technology spend and wage-related expenses. Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.
For more information related to our organizational realignment and related costs, refer to Note 14 — Restructuring within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
OTHER (INCOME) EXPENSE, NET
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Other (income) expense, net$(16)$(58)$(101)$(283)
Other (income) expense, net comprises foreign 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 normal course of business.
For the third quarter of fiscal 2024, Other (income) expense, net decreased from $58 million of other income, net, to $16 million of other income, net, primarily due to goodwill impairment in the current year and a net unfavorable change in foreign currency conversion gains and losses, including hedges.
For the first nine months of fiscal 2024, Other (income) expense, net decreased from $283 million of other income, net, to $101 million of other income, net, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges, as well as net favorable settlements of legal matters in the prior year and goodwill impairment in the current year. These items were partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor.
We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had a favorable impact of $16 million and an unfavorable impact of $86 million on our Income before income taxes for the third quarter and first nine months of fiscal 2024.
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INCOME TAXES
THREE MONTHS ENDEDNINE MONTHS ENDED
FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
Effective tax rate16.5 %16.0 %50 bps15.6 %18.5 %(290) bps
Our effective tax rate was 16.5% for the third quarter of fiscal 2024, substantially consistent with 16.0% for the third quarter of fiscal 2023.
Our effective tax rate was 15.6% for the first nine months of fiscal 2024, compared to 18.5% for the first nine months of fiscal 2023, primarily due to one-time benefits provided by the delay of the effective date of certain U.S. foreign tax credit regulations and a reduction in accrued withholding taxes on undistributed foreign earnings.
For additional information, refer to Note 5 — Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
USE OF NON-GAAP FINANCIAL MEASURES
Throughout this Quarterly Report on Form 10-Q, we discuss non-GAAP financial measures, including references to wholesale equivalent revenues, currency-neutral revenues, as well as Total NIKE Brand earnings before interest and taxes (EBIT), Total NIKE, Inc. EBIT and EBIT Margin, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with accounting principles generally acceptedU.S. GAAP. References to these measures should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Management uses these non-GAAP measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing our underlying 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 United StatesUnaudited Condensed Consolidated Statements of America (“U.S. GAAP”).Income. Total NIKE, Inc. EBIT for the three and nine months ended February 29, 2024 and February 28, 2023 are as follows:
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Net income$1,172 $1,240 $4,200 $4,039 
Add: Interest expense (income), net(52)(7)(108)22 
Add: Income tax expense232 237 774 916 
Earnings before interest and taxes$1,352 $1,470 $4,866 $4,977 
EBIT margin: Calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. Our EBIT margin calculation for the three and nine months ended February 29, 2024 and February 28, 2023 are as follows:
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023FEBRUARY 29, 2024FEBRUARY 28, 2023
Numerator
Earnings before interest and taxes$1,352 $1,470 $4,866 $4,977 
Denominator
Total NIKE, Inc. Revenues$12,429 $12,390 $38,756 $38,392 
EBIT margin10.9 %11.9 %12.6 %13.0 %
Currency-neutral revenues: Currency-neutral revenues enhance visibility to underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Currency-neutral revenues are calculated using actual exchange rates in use during the comparative prior year period in place of the exchange 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 if we had no NIKE Direct operations. NIKE Brand wholesale equivalent revenues consist of (1) sales to external wholesale customers and (2) internal sales from our wholesale operations to our NIKE Direct operations, which are charged at prices comparable to those charged to external wholesale customers. Additionally, currency-neutral revenues are calculated using actual exchange rates in use during the comparative prior year period to enhance the visibility of the underlying business trends excluding the impact of translation arising from foreign currency exchange rate fluctuations. EBIT is calculated as Net income before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. EBIT Margin is calculated as EBIT divided by total NIKE, Inc. Revenues.
Management uses these non-GAAP financial measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, references to wholesale equivalent revenues, currency-neutral revenues, EBIT and EBIT margin should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.
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RESULTS OF OPERATIONS
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions, except per share data)20232022% CHANGE20232022% CHANGE
Revenues$12,390 $10,871 14 %$38,392 $34,476 11 %
Cost of sales7,019 5,804 21 %21,695 18,500 17 %
Gross profit5,371 5,067 %16,697 15,976 %
Gross margin43.3 %46.6 %43.5 %46.3 %
Demand creation expense923 854 %2,968 2,789 %
Operating overhead expense3,036 2,584 17 %9,035 7,980 13 %
Total selling and administrative expense3,959 3,438 15 %12,003 10,769 11 %
% of revenues32.0 %31.6 %31.3 %31.2 %
Interest expense (income), net(7)53 — 22 165 — 
Other (income) expense, net(58)(94)— (283)(235)— 
Income before income taxes1,477 1,670 -12 %4,955 5,277 -6 %
Income tax expense237 274 -14 %916 670 37 %
Effective tax rate16.0 %16.4 %18.5 %12.7 %
NET INCOME$1,240 $1,396 -11 %$4,039 $4,607 -12 %
Diluted earnings per common share$0.79 $0.87 -9 %$2.57 $2.85 -10 %
CONSOLIDATED OPERATING RESULTS
REVENUES
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)20232022% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
20232022% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
NIKE, Inc. Revenues:
NIKE Brand Revenues by:
Footwear$7,970 $6,660 20 %25 %$24,588 $21,158 16 %24 %
Apparel3,381 3,232 %10 %10,609 10,330 %10 %
Equipment403 390 %%1,297 1,237 %12 %
Global Brand Divisions(2)
12 41 -71 %-69 %44 54 -19 %-17 %
Total NIKE Brand Revenues11,766 10,323 14 %19 %36,538 32,779 11 %19 %
Converse612 567 %12 %1,841 1,753 %10 %
Corporate(3)
12 (19)— — 13 (56)— — 
TOTAL NIKE, INC. REVENUES$12,390 $10,871 14 %19 %$38,392 $34,476 11 %19 %
Supplemental NIKE Brand Revenues Details:
NIKE Brand Revenues by:
Sales to Wholesale Customers$6,423 $5,728 12 %18 %$20,693 $18,790 10 %18 %
Sales through NIKE Direct5,331 4,554 17 %22 %15,801 13,935 13 %20 %
Global Brand Divisions(2)
12 41 -71 %-69 %44 54 -19 %-17 %
TOTAL NIKE BRAND REVENUES$11,766 $10,323 14 %19 %$36,538 $32,779 11 %19 %
(1)The percent change excluding currency changes represents a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" for further information.
(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 generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
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COMPARABLE STORE SALES

THIRD QUARTER OF FISCAL 2023 COMPARED TO THIRD QUARTER OF FISCAL 2022
On a currency-neutral basis, NIKE, Inc. Revenues increased 19% the third quarter of fiscal 2023, driven by higher revenues in both the NIKE Brand and Converse. Higher revenues in North America, EMEA, APLA and Converse contributed approximately 9, 7, 2 and 1 percentage points to NIKE, Inc. Revenues, respectively.
On a currency-neutral basis, NIKE Brand footwear revenues increased 25% in the third quarter of fiscal 2023, driven by higher revenues in Men's, the Jordan Brand and Women's. Unit sales of footwear increased 19%, while higher average selling price (ASP) per pair contributed approximately 6 percentage points of footwear revenue growth, primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and growth in NIKE Direct. This was partially offset by lower NIKE Direct ASP.
Currency-neutral NIKE Brand apparel revenues for the third quarter of fiscal 2023 increased 10%, driven by higher revenues in Men's. Unit sales of apparel increased 5% and higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth, primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP.
NIKE Brand wholesale revenues increased 12% and 18% compared to the third quarter of fiscal 2022, on a reported and currency-neutral basis, respectively. On a reported basis, NIKE Direct revenues represented approximately 45% of our total NIKE Brand revenues for the third quarter of fiscal 2023 compared to 44% for the third quarter of fiscal 2022. NIKE Brand Digital sales were $3.1 billion for the third quarter of fiscal 2023 compared to $2.7 billion for the third quarter of fiscal 2022. On a currency-neutral basis, NIKE Direct revenues increased 22%, primarily driven by NIKE Brand Digital sales growth of 24% and comparable store sales growth of 20%. Comparable store sales,sales: This key metric, which excludeexcludes NIKE Brand Digital sales, comprises revenues from NIKE-owned in-line and factory stores for which all three of the 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 has not been permanently repositioned within the past year. Comparable store sales includes revenues from stores that were temporarily closed during the period as a result of COVID-19. Comparable store sales represents a performance measuremetric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions. The method of calculating comparable store sales varies across the retail industry. As a result, our calculation of this metric may not be comparable to similarly titled measuresmetrics used by other companies.
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
On a currency-neutral basis, NIKE, Inc. Revenues increased 19% for the first nine months of fiscal 2023, driven by higher revenues in North America, EMEA, APLA and Converse, which contributed approximately 9, 7, 3 and 1 percentage points to NIKE, Inc. Revenues, respectively. Lower revenues in Greater China reduced NIKE, Inc. Revenues by approximately 1 percentage point.
On a currency-neutral basis, NIKE Brand footwear revenues increased 24%, driven by growth in Men's and the Jordan Brand. Unit sales of footwear increased 15%, while higher ASP per pair contributed approximately 9 percentage points of footwear revenue growth, primarily due to higher full-price ASP and growth in NIKE Direct.
Currency-neutral NIKE Brand apparel revenues increased 10%, driven by growth in Men's. Unit sales of apparel increased 7% and higher ASP per unit contributed approximately 3 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP.
NIKE Brand wholesale revenues increased 10% and 18% compared to the first nine months of fiscal 2022, on a reported and currency-neutral basis, respectively. On a reported basis, NIKE Direct revenues represented approximately 43% of our total NIKE Brand revenues for the first nine months of fiscal 2023 and the first nine months of fiscal 2022. NIKE Brand Digital sales were $9.4 billion for the first nine months of fiscal 2023 compared to $7.9 billion for the first nine months of fiscal 2022. On a currency-neutral basis, NIKE Direct revenues increased 20%, primarily driven by NIKE Brand Digital sales growth of 27% and comparable store sales growth of 11%.
GROSS MARGIN
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)20232022% CHANGE20232022% CHANGE
Gross profit$5,371 $5,067 %$16,697 $15,976 %
Gross margin43.3 %46.6 %(330) bps43.5 %46.3 %(280) bps
For the third quarter of fiscal 2023, our consolidated gross margin was 330 basis points lower than the prior year and primarily reflected the following factors:
Higher NIKE Brand product costs, on a wholesale equivalent basis, (decreasing gross margin approximately 360 basis points) primarily due to higher input costs and elevated inbound freight and logistics costs as well as product mix;
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Lower marginAs discussed in NIKE Direct, driven by higher promotional activity to liquidate inventoryNote 11 — Operating Segments in the current period compared to lower promotional activity in the prior period resulting from lower available inventory supply (decreasing gross margin approximately 140 basis points);
Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 140 basis points);
Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 30 basis points); and
Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis, (increasing gross margin approximately 370 basis points) due primarily to strategic pricing actions and product mix.
For the first nine months of fiscal 2023, our consolidated gross margin was 280 basis points lower than the prior year and primarily reflected the following factors:
Higher NIKE Brand product costs, on a wholesale equivalent basis, (decreasing gross margin approximately 360 basis points) primarily due to higher input costs and elevated inbound freight and logistics costs as well as product mix;
Lower margin in NIKE Direct, driven by higher promotional activity to liquidate inventory in the current period compared to lower promotional activity in the prior period resulting from lower available inventory supply (decreasing gross margin approximately 130 basis points);
Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 100 basis points); and
Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis, (increasing gross margin approximately 320 basis points) due primarily to strategic pricing actions and product mix.

TOTAL SELLING AND ADMINISTRATIVE EXPENSE
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)20232022% CHANGE20232022% CHANGE
Demand creation expense(1)
$923 $854 %$2,968 $2,789 %
Operating overhead expense3,036 2,584 17 %9,035 7,980 13 %
Total selling and administrative expense$3,959 $3,438 15 %$12,003 $10,769 11 %
% of revenues32.0 %31.6 %40 bps31.3 %31.2 %10 bps
(1)Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary products, television, digital and print advertising and media costs, brand events and retail brand presentation.
THIRD QUARTER OF FISCAL 2023 COMPARED TO THIRD QUARTER OF FISCAL 2022
Demand creation expense increased 8% for the third quarter of fiscal 2023 primarily due to an increase in advertising and marketing expense. Changes in foreign currency exchange rates decreased Demand creation expense by approximately 3 percentage points.
Operating overhead expense increased 17% primarily due to higher wage-related expenses, higher strategic technology enterprise investments and NIKE Direct variable costs. Changes in foreign currency exchange rates decreased Operating overhead expense by approximately 3 percentage points.
Foreign exchange rate fluctuations had a similar impact on the translation of our consolidated Revenues, resulting in an unfavorable impact of approximately 5 percentage points.
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
Demand creation expense increased 6% for the first nine months of fiscal 2023 primarily due to higher advertising and marketing expense and higher sports marketing expense. Changes in foreign currency exchange rates decreased Demand creation expense by approximately 5 percentage points.
Operating overhead expense increased 13% primarily due to an increase in wage-related expenses, higher strategic technology enterprise investments and NIKE Direct variable costs. Changes in foreign currency exchange rates decreased Operating overhead expense by approximately 4 percentage points.
Foreign exchange rate fluctuations had a similar impact on the translation of our consolidated Revenues, resulting in an unfavorable impact of approximately 8 percentage points.

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OTHER (INCOME) EXPENSE, NET
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)2023202220232022
Other (income) expense, net$(58)$(94)$(283)$(235)
Other (income) expense, net comprises foreign 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 normal course of business.
For the third quarter of fiscal 2023, Other (income) expense, net decreased from $94 million of other income, net to $58 million in the current year, largely due to net favorable settlements of legal and insurance matters in the prior year and favorable activity in the prior year related to our strategic distributor partnership transition within APLA, partially offset by a net favorable change in foreign currency conversion gains and losses, including hedges.
For the first nine months of fiscal 2023, Other (income) expense, net increased from $235 million of other income, net to $283 million in the current year, primarily due to a net favorable change in foreign currency conversion gains and losses, including hedges, and settlements of legal matters. This increase was partially offset by net unfavorable activity related to our strategic distributor partnership transition within APLA, including the loss recognized upon the completion of the sale of our entities in Argentina and Uruguay to a third-party distributor in the second quarter of fiscal 2023.
For more information related to our distributor partnership transition within APLA, see Note 14 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had unfavorable impacts of approximately $147 million and $508 million on our Income before income taxes for the third quarter and first nine months of fiscal 2023, respectively.
INCOME TAXES
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
20232022% CHANGE20232022% CHANGE
Effective tax rate16.0 %16.4 %(40) bps18.5 %12.7 %580 bps
Our effective tax rate was 16.0% for the third quarter of fiscal 2023 and substantially consistent compared to 16.4% for the third quarter of fiscal 2022.
Our effective tax rate was 18.5% for the first nine months of fiscal 2023, compared to 12.7% for the first nine months of fiscal 2022, primarily due to decreased benefits from stock-based compensation and a shift in our earnings mix.
Refer to Note 6 — Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements, for additional information.

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OPERATING SEGMENTS
Ourour operating segments are evidence of the structure of the Company's internal organization. The NIKE Brand segments are defined by geographic regions for operations participating in NIKE Brand sales activity.
Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment. The Company's reportable operating segments for the NIKE Brand are: North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA), and include results for the NIKE and Jordan brands.The Company's NIKE Direct operations are managed within each geographic operating segment. Converse is also a reportable operating segment for the Company and operates predominately in one industry: the design, marketing, licensing and selling of athletic lifestyle sneakers, apparel and accessories.
As part of our centrally managed foreign exchange risk management program, standard foreign currency exchange rates are assigned twice per year to each NIKE Brand entity in our geographic operating segments and Converse. These rates are set approximately nine and twelve months in advance of the future selling seasons to which they relate (specifically, for each currency, one standard rate applies to the fall and holiday selling seasons and one standard rate applies to the spring and summer selling seasons) based on average market spot rates in the calendar month preceding the date they are established. Inventories and Cost of sales for geographic operating segments and Converse reflect the use of these standard rates to record non-functional currency product purchases into the entity's functional currency. Differences between assigned standard foreign currency exchange rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses generated from our centrally managed foreign exchange risk management program and other conversion gains and losses.
The breakdown of Revenues is as follows:
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
20232022% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
North AmericaNorth America$4,913 $3,882 27 %27 %$16,253 $13,238 23 %23 %North America$5,070 $4,913 %%$16,118 $16,253 -1 -1 %-1 %
Europe, Middle East & AfricaEurope, Middle East & Africa3,246 2,779 17 %26 %10,068 9,228 %25 %Europe, Middle East & Africa3,138 3,246 3,246 -3 -3 %-4 %10,315 10,068 10,068 %%
Greater ChinaGreater China1,994 2,160 -8 %%5,438 5,986 -9 %-2 %Greater China2,084 1,994 1,994 %%5,682 5,438 5,438 %%
Asia Pacific & Latin AmericaAsia Pacific & Latin America1,601 1,461 10 %15 %4,735 4,273 11 %22 %Asia Pacific & Latin America1,647 1,601 1,601 %%5,024 4,735 4,735 %%
Global Brand Divisions(2)
Global Brand Divisions(2)
12 41 -71 %-69 %44 54 -19 %-17 %
Global Brand Divisions(2)
12 12 -25 -25 %-22 %34 44 44 -23 -23 %-24 %
TOTAL NIKE BRANDTOTAL NIKE BRAND11,766 10,323 14 %19 %36,538 32,779 11 %19 %TOTAL NIKE BRAND11,948 11,766 11,766 2 2 %2 %37,173 36,538 36,538 2 2 %2 %
ConverseConverse612 567 %12 %1,841 1,753 %10 %Converse495 612 612 -19 -19 %-20 %1,602 1,841 1,841 -13 -13 %-14 %
Corporate(3)
Corporate(3)
12 (19)— — 13 (56)— — 
TOTAL NIKE, INC. REVENUESTOTAL NIKE, INC. REVENUES$12,390 $10,871 14 %19 %$38,392 $34,476 11 %19 %TOTAL NIKE, INC. REVENUES$12,429 $12,390 0 0 %0 %$38,756 $38,392 1 1 %1 %
(1)    The percent change excluding currency changes represents a non-GAAP financial measure. SeeFor additional information, see "Use of Non-GAAP Financial Measures" for further information..
(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 generated by entities within the NIKE Brand geographic operating segments and Converse, but managed 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 before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income.EBIT. As discussed in Note 1211 — Operating Segments in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements, certain corporate costs are not included in EBIT of our operating segments.
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The breakdown of earnings before interest and taxesEBIT is as follows:
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE20232022% CHANGE(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
North AmericaNorth America$1,190 $967 23 %$4,064 $3,636 12 %North America$1,400 $1,190 18 18 %$4,360 $4,064 %
Europe, Middle East & AfricaEurope, Middle East & Africa785 713 10 %2,750 2,394 15 %Europe, Middle East & Africa734 785 785 -6 -6 %2,591 2,750 2,750 -6 -6 %
Greater ChinaGreater China702 784 -10 %1,754 2,054 -15 %Greater China722 702 702 %1,761 1,754 1,754 %
Asia Pacific & Latin AmericaAsia Pacific & Latin America485 478 %1,470 1,347 %Asia Pacific & Latin America471 485 485 -3 -3 %1,406 1,470 1,470 -4 -4 %
Global Brand DivisionsGlobal Brand Divisions(1,160)(975)-19 %(3,573)(3,033)-18 %Global Brand Divisions(1,199)(1,160)(1,160)-3 -3 %(3,572)(3,573)(3,573)%
TOTAL NIKE BRAND(1)
TOTAL NIKE BRAND(1)
2,002 1,967 2 %6,465 6,398 1 %
TOTAL NIKE BRAND(1)
2,128 2,002 2,002 6 6 %6,546 6,465 6,465 1 1 %
ConverseConverse164 168 -2 %526 504 %Converse98 164 164 -40 -40 %380 526 526 -28 -28 %
CorporateCorporate(696)(412)-69 %(2,014)(1,460)-38 %Corporate(874)(696)(696)-26 -26 %(2,060)(2,014)(2,014)-2 -2 %
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)
1,470 1,723 -15 %4,977 5,442 -9 %
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)
1,352 1,470 1,470 -8 -8 %4,866 4,977 4,977 -2 -2 %
EBIT margin(1)
EBIT margin(1)
11.9 %15.8 %13.0 %15.8 %
Interest expense (income), netInterest expense (income), net(7)53 — 22 165 — 
Interest expense (income), net
Interest expense (income), net
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXESTOTAL NIKE, INC. INCOME BEFORE INCOME TAXES$1,477 $1,670 -12 %$4,955 $5,277 -6 %TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES$1,404 $1,477 -5 -5 %$4,974 $4,955 0 0 %
(1)    Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin represent non-GAAP financial measures. SeeFor additional information, see "Use of Non-GAAP Financial Measures" for further information..
NORTH AMERICA
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$3,322 $2,532 31 %31 %$11,090 $8,648 28 %28 %$3,460 $3,322 %%$10,950 $11,090 -1 -1 %-1 %
ApparelApparel1,419 1,207 18 %18 %4,598 4,117 12 %12 %Apparel1,408 1,419 1,419 -1 -1 %-1 %4,555 4,598 4,598 -1 -1 %-1 %
EquipmentEquipment172 143 20 %21 %565 473 19 %20 %Equipment202 172 172 17 17 %18 %613 565 565 %%
TOTAL REVENUESTOTAL REVENUES$4,913 $3,882 27 %27 %$16,253 $13,238 23 %23 %TOTAL REVENUES$5,070 $4,913 3 3 %3 %$16,118 $16,253 -1 -1 %-1 %
Revenues by:Revenues by:  
Sales to Wholesale CustomersSales to Wholesale Customers$2,323 $1,769 31 %32 %$8,533 $6,774 26 %26 %
Sales to Wholesale Customers
Sales to Wholesale Customers$2,440 $2,323 %%$8,114 $8,533 -5 %-5 %
Sales through NIKE DirectSales through NIKE Direct2,590 2,113 23 %23 %7,720 6,464 19 %20 %Sales through NIKE Direct2,630 2,590 2,590 %%8,004 7,720 7,720 %%
TOTAL REVENUESTOTAL REVENUES$4,913 $3,882 27 %27 %$16,253 $13,238 23 %23 %TOTAL REVENUES$5,070 $4,913 3 3 %3 %$16,118 $16,253 -1 -1 %-1 %
EARNINGS BEFORE INTEREST AND TAXESEARNINGS BEFORE INTEREST AND TAXES$1,190 $967 23 %$4,064 $3,636 12 %
THIRD QUARTER OF FISCAL 20232024 COMPARED TO THIRD QUARTER OF FISCAL 20222023
OnNorth America revenues increased 3% on a currency-neutral basis North America revenues for the third quarter of fiscal 2023 increased 27%, due primarily to higher revenues in Kids', Men's, Women's and the Jordan Brand. Wholesale revenues increased 5%. NIKE Direct revenues increased 23%2%, primarily driven by strong digital sales growth of 25%, comparable store sales growth of 17%1% and the addition of new stores.stores, as well as digital sales growth of 1%.
Currency-neutral footwearFootwear revenues increased 31%,4% on a currency-neutral basis, primarily driven bydue to higher revenues in the Jordan BrandKids', Women's and Men's. Unit sales of footwear increased 26%7%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to a lower mix of NIKE Direct sales and lower NIKE Direct ASP.
Apparel revenues decreased 1% on a currency-neutral basis due to lower revenues in the Jordan Brand and Men's, largely offset by higher revenues in Kids' and Women's. Unit sales of apparel decreased 5%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs, partially offset by a lower mix of NIKE Direct sales.
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Reported EBIT increased 18% reflecting higher revenues and the following:
Gross margin expansion of 290 basis points primarily due to higher full-price ASP, net of discounts, largely due to strategic pricing actions and lower discounts, as well as lower product costs, reflecting lower ocean freight rates and logistics costs, partially offset by higher product input costs.
Selling and administrative expense was flat as higher demand creation expense was offset by lower operating overhead expense. The increase in demand creation expense was primarily due to higher advertising and marketing expense and higher sports marketing expense. The decrease in operating overhead expense was primarily due to lower wage-related expenses.
FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHS OF FISCAL 2023
North America revenues decreased 1% on a currency-neutral basis due to lower revenues in Men's, Women's and Kids', partially offset by higher revenues in the Jordan Brand. Wholesale revenues decreased 5%, reflecting our proactive decisions to prioritize marketplace health in the current year coupled with our liquidation of excess inventory in the prior year. NIKE Direct revenues increased 4%, driven by comparable sales growth of 3% and the addition of new stores, as well as digital sales growth of 2%.
Footwear revenues decreased 1% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand. Unit sales of footwear decreased 8%, while higher ASP per pair contributed approximately 57 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and growth ina higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.ASP.
Currency-neutral apparelApparel revenues increased 18%, primarily drivendecreased 1% on a currency-neutral basis due to lower revenues in Men's, Women's and the Jordan Brand, partially offset by higher revenues in Men's.Kids'. Unit sales of apparel increased 20%decreased 10%, while lowerhigher ASP per unit reducedcontributed approximately 9 percentage points of apparel revenues by approximately 2 percentage points. Lowerrevenue growth. Higher ASP per unit was primarily due to lowerhigher full-price and NIKE Direct ASPs.
Reported EBIT increased 7% reflecting lower revenues and the following:
Gross margin expansion of 250 basis points primarily due to higher full-price ASP, reflecting higher promotional activity,net of discounts, largely due to strategic pricing actions and a lower mix of full-price sales.discounts. This activity was partially offset by higher ASPproduct costs, reflecting higher product input costs, partially offset by lower ocean freight rates and logistics costs.
Selling and administrative expense increase of 2% driven by higher operating overhead expense and demand creation expense. The increase in both full and off-price.operating overhead expense was primarily due to higher other administrative costs, partially offset by lower wage-related expenses. Demand creation expense increased primarily due to higher digital marketing.
EUROPE, MIDDLE EAST & AFRICA
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear$1,960 $2,011 -3 %-3 %$6,406 $6,086 %%
Apparel994 1,094 -9 %-10 %3,331 3,528 -6 %-8 %
Equipment184 141 30 %27 %578 454 27 %23 %
TOTAL REVENUES$3,138 $3,246 -3 %-4 %$10,315 $10,068 2 %0 %
Revenues by:
Sales to Wholesale Customers$1,966 $2,061 -5 %-5 %$6,483 $6,506 %-2 %
Sales through NIKE Direct1,172 1,185 -1 %-4 %3,832 3,562 %%
TOTAL REVENUES$3,138 $3,246 -3 %-4 %$10,315 $10,068 2 %0 %
EARNINGS BEFORE INTEREST AND TAXES$734 $785 -6 %$2,591 $2,750 -6 %
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THIRD QUARTER OF FISCAL 2024 COMPARED TO THIRD QUARTER OF FISCAL 2023

Reported EBIT increased 23%EMEA revenues decreased 4% on a currency-neutral basis, primarily due to higherlower revenues in Women's, Men's and Kids'. Wholesale revenues decreased 5%. NIKE Direct revenues decreased 4%, driven by digital sales declines of 10%, reflecting reduced digital traffic, partially offset by higher selling and administrative expense and gross margin contraction. Gross margin decreased approximately 200 basis points largely driven by lower margin in NIKE Direct in part due to higher promotional activity, higher product costs reflecting higher input costs and inbound freight and logistics costs, including supply chain network costs, and a lower mix of full-price sales. This was partially offset by higher full-price ASP, net of discounts, driven by strategic pricing actions and product mix. Selling and administrative expense increased due to higher operating overhead and demand creation expense. Operating overhead expense increased primarily due to higher wage-related expenses and NIKE Direct variable costs, in part due to new store additions. The increase in demand creation expense was primarily due to an increase in digital marketing.
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
On a currency-neutral basis, North America revenues for the first nine months of fiscal 2023 increased 23%, due primarily to higher revenues in Men's and the Jordan Brand. NIKE Direct revenues increased 20%, primarily driven by strong digital sales growth of 25%, comparable store sales growth of 9%6% and the addition of new stores.
Currency-neutral footwearFootwear revenues increased 28%, largely driven by higherdecreased 3% on a currency-neutral basis, primarily due to lower revenues in Men'sKids' and the Jordan Brand.Women's. Unit sales of footwear increased 23%decreased 9%, while higher ASP per pair contributed approximately 56 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and growth ina higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.ASP.
Currency-neutral apparelApparel revenues increased 12%, driven primarily by higher revenues in Men's. Unit sales of apparel increased 12%, while ASP per unit remained flat, as lower NIKE Direct ASP, reflecting higher promotional activity, was offset by higher full-price ASP and growth in NIKE Direct.
Reported EBIT increased 12%decreased 10% on a currency-neutral basis, primarily due to higher revenues, partially offset by gross margin contraction and higher selling and administrative expense. Gross margin decreased approximately 340 basis points primarily due to higher product costs, reflecting higher input costs and inbound freight and logistics costs, lower margins in NIKE Direct due to higher promotional activity and a lower mix of full-price sales. This was partially offset by higher full-price ASP, net of discounts, largely due to product mix and strategic pricing actions. Selling and administrative expense increased due to higher operating overhead and demand creation expense. Operating overhead expense increased primarily as a result of higher wage-related costs and NIKE Direct variable costs. The increase in demand creation expense reflected higher sports marketing expenses and an increase in digital marketing.
EUROPE, MIDDLE EAST & AFRICA
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear$2,011 $1,569 28 %39 %$6,086 $5,358 14 %30 %
Apparel1,094 1,083 %10 %3,528 3,444 %18 %
Equipment141 127 11 %20 %454 426 %22 %
TOTAL REVENUES$3,246 $2,779 17 %26 %$10,068 $9,228 9 %25 %
Revenues by:
Sales to Wholesale Customers$2,061 $1,858 11 %20 %$6,506 $6,194 %21 %
Sales through NIKE Direct1,185 921 29 %39 %3,562 3,034 17 %34 %
TOTAL REVENUES$3,246 $2,779 17 %26 %$10,068 $9,228 9 %25 %
EARNINGS BEFORE INTEREST AND TAXES$785 $713 10 %$2,750 $2,394 15 %
THIRD QUARTER OF FISCAL 2023 COMPARED TO THIRD QUARTER OF FISCAL 2022
On a currency-neutral basis, EMEA revenues for the third quarter of fiscal 2023 increased 26%, primarily driven by growth in Men's. NIKE Direct revenues increased 39%, driven by strong digital sales growth of 43% and comparable store sales growth of 36%.
Currency-neutral footwear revenues increased 39%, driven by higher revenues in Men's and Women's. Unit sales of apparel decreased 19%, while higher ASP per unit contributed approximately 9 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
Reported EBIT decreased 6% reflecting lower revenues and the following:
Gross margin was flat, as lower product costs, reflecting lower ocean freight rates and logistics costs, and higher full-price ASP, net of discounts, primarily due to strategic pricing actions, were offset by unfavorable changes in standard foreign currency exchange rates, lower margin in NIKE Direct and lower off-price margins.
Selling and administrative expense increase of 1% driven by higher demand creation expense, partially offset by lower operating overhead expense. The increase in demand creation expense was primarily due to higher advertising and marketing expense. The decrease in operating overhead expense was primarily due to lower other administrative costs and wage-related expenses, largely offset by unfavorable changes in foreign currency exchange rates.
FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHS OF FISCAL 2023
EMEA revenues were flat on a currency-neutral basis, primarily due to lower revenues in Kids' and Women's, partially offset by higher revenues in Men's. Wholesale revenues decreased 2%. NIKE Direct revenues increased 3%, driven by comparable store sales growth of 10% and the addition of new stores, partially offset by digital sales declines of 1%.
Footwear revenues increased 3% on a currency-neutral basis, primarily due to higher revenues in Men's, partially offset by Kids'. Unit sales of footwear increased 24%decreased 4%, while higher ASP per pair contributed approximately 157 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales.
Apparel revenues decreased 8% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's. Unit sales of apparel decreased 19%, while higher ASP per unit contributed approximately 11 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.
Reported EBIT decreased 6% reflecting higher revenues and the following:
Gross margin contraction of 150 basis points largely due to unfavorable changes in standard foreign currency exchange rates, partially offset by higher full-price ASP, net of discounts, primarily due to strategic pricing actions and lower product costs, reflecting ocean freight rates and logistics costs.
Selling and administrative expense increase of 6% driven by higher operating overhead expense and demand creation expense. Operating overhead expense increased primarily due to unfavorable changes in foreign currency exchange rates, higher wage-related expenses and higher other administrative costs. Demand creation expense increased primarily due to higher sports marketing expense and unfavorable changes in foreign currency exchange rates.
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GREATER CHINA
THREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear$1,547 $1,496 %%$4,195 $4,099 %%
Apparel498 461 %10 %1,368 1,228 11 %16 %
Equipment39 37 %%119 111 %11 %
TOTAL REVENUES$2,084 $1,994 5 %6 %$5,682 $5,438 4 %8 %
Revenues by:
Sales to Wholesale Customers$1,243 $1,126 10 %12 %$3,165 $2,862 11 %15 %
Sales through NIKE Direct841 868 -3 %-1 %2,517 2,576 -2 %%
TOTAL REVENUES$2,084 $1,994 5 %6 %$5,682 $5,438 4 %8 %
EARNINGS BEFORE INTEREST AND TAXES$722 $702 3 %$1,761 $1,754 0 %
THIRD QUARTER OF FISCAL 2024 COMPARED TO THIRD QUARTER OF FISCAL 2023
Greater China revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, Women's, Kids' and the Jordan Brand. Wholesale revenues increased 12%. NIKE Direct revenues decreased 1% due to digital sales declines of 13%, reflecting reduced digital traffic, partially offset by comparable store sales growth of 1% and growth in non-comparable store sales.
Footwear revenues increased 5% on a currency-neutral basis due to higher revenues in Men's, Women's, Kids' and the Jordan Brand. Unit sales of footwear increased 9%, while lower ASP per pair reduced footwear revenues by approximately 4 percentage points. Lower ASP per pair was primarily due to lower NIKE Direct andASP.
Apparel revenues increased 10% on a currency-neutral basis, primarily due to higher revenues in Men's. Unit sales of apparel increased 10%, while ASP per unit was flat, as higher NIKE Direct ASP was offset by lower off-price and full-price ASPs.
Reported EBIT increased 3% reflecting higher revenues and the following:
Gross margin contraction of approximately 180 basis points, largely due to unfavorable changes in standard foreign currency exchange rates, lower off-price margins and higher product costs. This was partially offset by higher full-price ASP, net of discounts, primarily due to strategic pricing actions.
Selling and administrative expense decrease of 4% primarily due to lower operating overhead expense. Operating overhead expense decreased due to lower other administrative costs, favorable changes in foreign currency exchange rates and lower wage-related expenses.
FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHS OF FISCAL 2023
Greater China revenues increased 8% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'. Wholesale revenues increased 15%. NIKE Direct revenues increased 1% due to comparable store sales growth of 5% and growth in non-comparable store sales, partially offset by digital sales declines of 11%, reflecting reduced digital traffic.
Footwear revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, the Jordan Brand, Women's and Kids'. Unit sales of footwear increased 7%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to lower NIKE Direct ASP, partially offset by higher full-price ASP.
Apparel revenues increased 16% on a currency-neutral basis, primarily due to higher revenues in Men's and Women's. Unit sales of apparel increased 6%, while higher ASP per unit contributed approximately 10 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher NIKE Direct, full-price and off-price ASPs as well as a higher mix of full-price sales.
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Currency-neutral apparel revenues increased 10% due primarily to higher revenues in Men's. Unit sales of apparel decreased 2%, while higher ASP per unit contributed approximately 12 percentage points of apparel revenue growth, primarily due to growth in NIKE Direct and higher full-price ASP, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.
Reported EBIT increased 10% primarily due towas flat reflecting higher revenues partially offset by grossand the following:
Gross margin contraction and higher selling and administrative expenses. Gross margin decreasedof approximately 25070 basis points, primarily due to higher product costs reflecting higher input costs and inbound freight and logistics costs as well as product mix and unfavorable changes in standard foreign currency exchange rates. This activity wasrates and lower off-price margins, partially offset by higher full-price ASP, net of discounts, in partlargely due to strategic pricing actions, andpartially offset by product mix.
Selling and administrative expense increasedincrease of 3% primarily due to higher operating overhead and demand creation expense. Operating overhead expense increased primarily due to wage-related expenses andhigher other administrative costs, partially offset by favorable changes in foreign currency exchange rates. Higher demandDemand creation expense was driven by higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates.
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
On a currency-neutral basis, EMEA revenues for the first nine months of fiscal 2023 increased 25%, due primarily to higher revenues in Men’s. NIKE Direct revenues increased 34% primarily due to strong digital sales growth of 51% and comparable store sales growth of 18%.
Currency-neutral footwear revenues increased 30%, driven by higher revenues led by Men's, the Jordan Brand and Women's. Unit sales of footwear increased 13%, while higher ASP per pair contributed approximately 17 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price and NIKE Direct ASPs, as well as growth in NIKE Direct.
Currency-neutral apparel revenues increased 18% due primarily to higher revenues in Men's. Unit sales of apparel increased 5%, while higher ASP per unit contributed approximately 13 percentage points of apparel revenue growth, primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.
Reported EBIT increased 15% due to higher revenues and gross margin expansion, partially offset by higher selling and administrative expense. Gross margin increased approximately 30 basis points primarily due to higher full-price ASP, net of discounts, in part due to strategic pricing actions and product mix. This activity was partially offset by higher product costs reflecting higher input costs, inbound freight and logistics costs as well as product mix. Selling and administrative expense increased due to higher demand creation and operating overhead expense. Higher demand creation expense was primarily due to higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates. Operating overhead expense increased primarily due to other administrative costs and higher wage-related expenses, partially offset by favorable changes in foreign currency exchange rates.
GREATER CHINA
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear$1,496 $1,554 -4 %%$4,099 $4,238 -3 %%
Apparel461 548 -16 %-8 %1,228 1,588 -23 %-17 %
Equipment37 58 -36 %-31 %111 160 -31 %-26 %
TOTAL REVENUES$1,994 $2,160 -8 %1 %$5,438 $5,986 -9 %-2 %
Revenues by:
Sales to Wholesale Customers$1,126 $1,241 -9 %-1 %$2,862 $3,251 -12 %-5 %
Sales through NIKE Direct868 919 -6 %%2,576 2,735 -6 %%
TOTAL REVENUES$1,994 $2,160 -8 %1 %$5,438 $5,986 -9 %-2 %
EARNINGS BEFORE INTEREST AND TAXES$702 $784 -10 %$1,754 $2,054 -15 %
THIRD QUARTER OF FISCAL 2023 COMPARED TO THIRD QUARTER OF FISCAL 2022
On a currency-neutral basis, Greater China revenues for the third quarter of fiscal 2023 increased 1%. The increase in revenues was primarily due to higher revenues in Men's, the Jordan Brand and Kid's, largely offset by lower revenues in Women's. NIKE Direct revenues increased 3% due to comparable store sales growth of 9%, in part due to improved physical traffic, and growth in non-comparable store sales, partially offset by digital sales declines of 11%.
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Currency-neutral footwear revenues increased 5%, driven primarily by higher revenues in Men's. Unit sales of footwear increased 6%, while lower ASP per unit reduced footwear revenues by approximately 1 percentage point.
Currency-neutral apparel revenues decreased 8%, due primarily to lower revenues in Men's and Women's. Unit sales of apparel decreased 16%, partially offset by approximately 8 percentage points of growth due to higher ASP per unit. Higher ASP was primarily due to higher full-price, NIKE Direct and off-price ASPs as well as a higher mix of full-price sales.
Reported EBIT decreased 10% as lower revenues and gross margin contraction were partially offset by lower selling and administrative expense. Gross margin decreased approximately 80 basis points, primarily due to higher product costs reflecting higher input costs and product mix. This activity was partially offset by favorable changes in standard foreign currency exchange rates and higher full-price ASP, net of discounts, in part due to product mix. Selling and administrative expense decreased due to lower demand creation and operating overhead expense. The decrease in demand creation expense was primarily due to lower retail brand presentation expense, favorable changes in foreign currency exchange rates and lower digital marketing, partially offset by higher advertising and marketing expense. Operating overhead expense decreased primarily due to favorable changes in foreign currency exchange rates, partially offset by higher wage-related expense and other administrative costs.
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
On a currency-neutral basis, Greater China revenues for the first nine months of fiscal 2023 decreased 2%, reflecting impacts from COVID-19 related disruptions. The decrease in revenues was primarily due to lower revenues in Men’s and Women's, largely offset by higher revenues in the Jordan Brand. NIKE Direct revenues increased 2% due to growth in non-comparable store sales and a 1% increase in comparable store sales, partially offset by a decline in digital sales of 1%.
Currency-neutral footwear revenues increased 4%, driven primarily by higher revenues in the Jordan Brand. Unit sales of footwear increased 3%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth, primarily due to higher NIKE Direct ASP and a higher mix of full-price sales, partially offset by a lower mix of NIKE Direct sales.
Currency-neutral apparel revenues decreased 17%, due primarily to lower revenues in Men's and Women's. Unit sales of apparel decreased 16%, while lower ASP per unit reduced apparel revenues by approximately 1 percentage point, primarily due to lower NIKE Direct and off-price ASPs, partially offset by higher full-price ASP and growth in NIKE Direct.
Reported EBIT decreased 15% as lower revenues and gross margin contraction more than offset lower selling and administrative expense. Gross margin decreased approximately 80 basis points, primarily due to higher product costs reflecting product mix and higher input costs. This activity was partially offset by favorable changes in standard foreign currency exchange rates and higher full-price ASP, net of discounts, in part due to product mix. Selling and administrative expense decreased due to lower demand creation expense, partially offset by higher operating overhead expense. The decrease in demand creation expense was primarily due to lower retail brand presentation costs, lower digital marketing and favorable changes in foreign currency exchange rates, partially offset by higher advertising and marketing expense. Operating overhead expense increased due to higher wage-related expenses and other administrative costs, partially offset by favorable changes in foreign currency exchange rates.
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ASIA PACIFIC & LATIN AMERICA
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$1,141 $1,005 14 %20 %$3,313 $2,914 14 %24 %$1,195 $1,141 %%$3,639 $3,313 10 10 %%
ApparelApparel407 394 %%1,255 1,181 %18 %Apparel390 407 407 -4 -4 %-3 %1,198 1,255 1,255 -5 -5 %-4 %
EquipmentEquipment53 62 -15 %-12 %167 178 -6 %%Equipment62 53 53 17 17 %19 %187 167 167 12 12 %12 %
TOTAL REVENUESTOTAL REVENUES$1,601 $1,461 10 %15 %$4,735 $4,273 11 %22 %TOTAL REVENUES$1,647 $1,601 3 3 %4 %$5,024 $4,735 6 6 %6 %
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$913 $860 %11 %$2,792 $2,571 %18 %
Sales to Wholesale Customers
Sales to Wholesale Customers$939 $913 %%$2,927 $2,792 %%
Sales through NIKE DirectSales through NIKE Direct688 601 14 %22 %1,943 1,702 14 %27 %Sales through NIKE Direct708 688 688 %%2,097 1,943 1,943 %%
TOTAL REVENUESTOTAL REVENUES$1,601 $1,461 10 %15 %$4,735 $4,273 11 %22 %TOTAL REVENUES$1,647 $1,601 3 3 %4 %$5,024 $4,735 6 6 %6 %
EARNINGS BEFORE INTEREST AND TAXESEARNINGS BEFORE INTEREST AND TAXES$485 $478 1 %$1,470 $1,347 9 %
As discussed previously, our NIKE Brand business in Brazil transitioned to a distributor operating model during fiscal 2021. We completed the sale of our entity in Chile and our entities in Argentina and Uruguay to third-party distributors in the first and second quarters of fiscal 2023, respectively. The impacts from closing these transactions are included within Corporate and are not reflected in the APLAAsia Pacific & Latin America operating segment results. This completed the transition of our NIKE Brand businesses within our CASACentral and South America ("CASA") marketplace, which now reflects a full distributor operating model. For more information, see Note 14 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
THIRD QUARTER OF FISCAL 20232024 COMPARED TO THIRD QUARTER OF FISCAL 20222023
OnAPLA revenues increased 4% on a currency-neutral basis due to higher revenues across most territories, led by CASA, Mexico, Japan and Southeast Asia & India, partially offset by lower revenues in the Pacific territory. Revenues increased due to overall growth in Women's, Men's, Kids' and the Jordan Brand. Wholesale revenues increased 3%. NIKE Direct revenues increased 4%, driven by comparable store sales growth of 12% and the addition of new stores, partially offset by digital sales declines of 6%, reflecting reduced digital traffic.
Footwear revenues increased 5% on a currency-neutral basis due to higher revenues in Women's, Men's, Kids' and the Jordan Brand. Unit sales of footwear increased 4%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, a higher mix of NIKE Direct sales and higher off-price ASP, partially offset by lower NIKE Direct ASP.
Apparel revenues decreased 3% on a currency-neutral basis, primarily due to lower revenues in Men's, partially offset by higher revenues in the Jordan Brand. Unit sales of apparel decreased 6%, while higher ASP per unit contributed approximately 3 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher off-price ASP, higher full-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.
Reported EBIT decreased 3% reflecting higher revenues and the following:
Gross margin contraction of approximately 190 basis points primarily due to unfavorable changes in standard foreign currency exchange rates and lower margin in NIKE Direct. This was partially offset by higher full-price ASP, net of discounts, primarily due to strategic pricing actions and product mix.
Selling and administrative expense increase of 2% due to higher demand creation and operating overhead expense. Demand creation expense increased primarily due to higher retail brand presentation expense and digital marketing, partially offset by lower advertising and marketing expense. Operating overhead expense increased primarily due to other administrative costs, partially offset by lower wage-related expenses.
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FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHS OF FISCAL 2023
APLA revenues increased 15% for the third quarter of fiscal 2023 driven by6% on a currency-neutral basis due to higher revenues across nearly allmost territories, led by Southeast Asia & India, Japan and Japan. This increase was partially offset by a decline in our CASA territory.Mexico. Within our CASA territory, the transition of our Chile, Argentina and Uruguay entities to a third-party distributor operating model reduceddid not have a material impact on APLA revenue growth by approximately 8 percentage points.revenues. Revenues increased primarily due to overall growth in Men's, Women's, the Jordan Brand and Women's.Kids'. Wholesale revenues increased 4%. NIKE Direct revenues increased 22%7%, primarily due to digital sales growth of 23% anddriven by comparable store sales growth of 36% in part due to improved physical retail traffic, partially offset by12% and the addition of new stores, included in the saleas well as digital sales growth of our Chile, Argentina and Uruguay entities.2%.
Currency-neutral footwearFootwear revenues increased 20%,9% on a currency-neutral basis due primarily to higher revenues in Men's, Women's, the Jordan Brand and Women's.Kids'. Unit sales of footwear increased 14%7%, while higher ASP per pair contributed approximately 62 percentage points of footwear revenue growth. Higher ASP per pair was driven byprimarily due to higher full-price ASP, and growth ina higher mix of NIKE Direct sales and higher off-price ASP, partially offset by lower NIKE Direct ASP.
Currency-neutral apparelApparel revenues increased 9%,decreased 4% on a currency-neutral basis, primarily due primarily to higherlower revenues in Men's.Men's and Women's. Unit sales of apparel decreased 1%11%, while higher ASP per unit contributed approximately 107 percentage points of apparel revenue growth, driven bygrowth. Higher ASP per unit was primarily due to higher full-price ASP, off-price ASP and off-price ASPs and growth ina higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.
Reported EBIT increased 1% for the third quarter of fiscal 2023, asdecreased 4% reflecting higher revenues more than offset higher selling and administrative expense and gross margin contraction. the following:
Gross margin decreasedcontraction of approximately 190270 basis points primarily due to higher product costs reflecting product mix and higher input costs and unfavorable changes in standard foreign currency exchange rates.rates, lower margin in NIKE Direct and higher product costs, reflecting higher product input costs. This was partially offset by higher full-price ASP, net of discounts, in partprimarily due to product mix and strategic pricing actions.
Selling and administrative expense increasedincrease of 9% due to higher demand creation and operating overhead expense. The increase in demand creation expense was primarily due to higher advertising and marketing expense and an increase in digital marketing. Operating overhead expense increased largely due to higher wage-related costs and NIKE Direct variable costs, partially offset by favorable changes in foreign currency exchange rates.
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FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
On a currency-neutral basis, APLA revenues increased 22% for the first nine months of fiscal 2023 driven by higher revenues across nearly all territories, led by Southeast Asia & India, Korea and Japan. This increase was partially offset by a decline in our CASA territory. Within our CASA territory, the transition of our Chile, Argentina and Uruguay entities to a third-party distributor operating model reduced APLA revenue growth by approximately 5 percentage points. Revenues increased primarily due to higher revenues in Men’s, Women's and the Jordan Brand. NIKE Direct revenues increased 27%, primarily due to digital sales growth of 29% and comparable store sales growth of 31%, in part due to improved physical retail traffic.
Currency-neutral footwear revenues increased 24%, due primarily to higher revenues in Men's, Women's and the Jordan Brand. Unit sales of footwear increased 17%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. Higher ASP per pair was driven by higher full-price ASP and growth in NIKE Direct.
Currency-neutral apparel revenues increased 18%, due primarily to higher revenues in Men's. Unit sales of apparel increased 13%, while higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth, driven by higher full-price and off-price ASPs, partially offset by lower NIKE Direct ASP.
Reported EBIT increased 9% for the third quarter of fiscal 2023 as a result of higher revenues, partially offset by higher selling and administrative expense and gross margin contraction. Gross margin decreased approximately 100 basis points primarily due to higher product costs, reflecting product mix, increased inbound freight and logistics costs and input costs, partially offset by higher full-price ASP, net of discounts, in part due to product mix and strategic pricing actions. Selling and administrative expense increased due to higher operating overhead and demand creation expense. The increase in operating overhead expense was primarily due to higher wage-related expenses and NIKE Direct variable costs, partially offset by favorable changes in foreign currency exchange rates. Demand creation expense increased primarily due to increases in advertisinghigher digital marketing and marketing expense and higher sports marketing expense. Operating overhead expense partially offset by favorable changes in foreign currency exchange rates.increased primarily due to higher other administrative costs.
GLOBAL BRAND DIVISIONS
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
RevenuesRevenues$12 $41 -71 %-69 %$44 $54 -19 %-17 %Revenues$$12 -25 -25 %-22 %$34 $44 -23 -23 %-24 %
Earnings (Loss) Before Interest and TaxesEarnings (Loss) Before Interest and Taxes$(1,160)$(975)-19 %$(3,573)$(3,033)-18 %
Global Brand Divisions primarily represent demand creation and operating overhead expense, including product creation and design expenses that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
THIRD QUARTER OF FISCAL 20232024 COMPARED TO THIRD QUARTER OF FISCAL 20222023
Global Brand Divisions' loss before interest and taxes increased 19% for the third quarter of fiscal 2023 driven primarily3% in part due to higher demand creation expense, partially offset by higherlower operating overhead andexpense. The increase in demand creation expense was primarily due to increased advertising and marketing expense. HigherLower operating overhead expense was primarily due to an increase inlower technology spend and wage-related costs and strategic technology enterprise investments. Higher demand creation expense was primarily due to an increase in digital marketing and higher advertising and marketing expense.costs.
FIRST NINE MONTHS OF FISCAL 20232024 COMPARED TO FIRST NINE MONTHS OF FISCAL 20222023
Global Brand Divisions' loss before interest and taxes increased 18% for the first nine months of fiscal 2023 driven by higherwas flat primarily as lower operating overhead andexpense was offset by higher demand creation expense. The increase inLower operating overhead expense was primarily due to higherlower technology spend, wage-related costsexpenses and strategic technology enterprise investments.other administrative costs. The increase in demand creation expense reflectedwas primarily due to higher sportsadvertising and marketing expenses and an increase in digital marketing.expense.
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CONVERSE
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES20232022% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGESFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:Revenues by:
Footwear
Footwear
FootwearFootwear$540 $503 %11 %$1,633 $1,555 %11 %$426 $540 -21 -21 %-22 %$1,390 $1,633 -15 -15 %-16 %
ApparelApparel29 29 %%70 87 -20 %-13 %Apparel25 29 29 -14 -14 %-13 %75 70 70 %%
EquipmentEquipment-14 %-2 %21 21 %%Equipment50 50 %43 %27 21 21 29 29 %32 %
Other(1)
Other(1)
37 28 32 %29 %117 90 30 %29 %
Other(1)
35 37 37 -5 -5 %-5 %110 117 117 -6 -6 %-6 %
TOTAL REVENUESTOTAL REVENUES$612 $567 8 %12 %$1,841 $1,753 5 %10 %TOTAL REVENUES$495 $612 -19 -19 %-20 %$1,602 $1,841 -13 -13 %-14 %
Revenues by:Revenues by:
Sales to Wholesale CustomersSales to Wholesale Customers$323 $303 %12 %$971 $975 %%
Sales to Wholesale Customers
Sales to Wholesale Customers$257 $323 -20 %-22 %$843 $971 -13 %-14 %
Sales through Direct to ConsumerSales through Direct to Consumer252 236 %10 %753 688 %13 %Sales through Direct to Consumer203 252 252 -19 -19 %-20 %649 753 753 -14 -14 %-14 %
Other(1)
Other(1)
37 28 32 %29 %117 90 30 %29 %
Other(1)
35 37 37 -5 -5 %-5 %110 117 117 -6 -6 %-6 %
TOTAL REVENUESTOTAL REVENUES$612 $567 8 %12 %$1,841 $1,753 5 %10 %TOTAL REVENUES$495 $612 -19 -19 %-20 %$1,602 $1,841 -13 -13 %-14 %
EARNINGS BEFORE INTEREST AND TAXESEARNINGS BEFORE INTEREST AND TAXES$164 $168 -2 %$526 $504 4 %
(1)Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights. We do not own the Converse trademarks in Japan and accordingly do not earn revenues in Japan.
THIRD QUARTER OF FISCAL 20232024 COMPARED TO THIRD QUARTER OF FISCAL 20222023
OnConverse revenues decreased 20% on a currency-neutral basis Converse revenues increased 12% for the third quarter of fiscal 2023 asdriven by revenue growthdeclines in North America, Western Europe, and licensee markets was partially offset by declines in Asia. Direct to consumer revenues increased 10%, driven by strong digital sales growth in North America. Combined unit sales within the wholesale and direct to consumer channels increased 4%decreased 17%, driven primarily by a decrease in wholesale, while ASP decreased 3% driven by growthincreased promotional activity in direct to consumer.
Wholesale revenues decreased 22% on a currency-neutral basis, driven by declines in North America, while ASP increased 7%,Western Europe and Asia.
Direct to consumer revenues decreased 20% on a currency-neutral basis driven by strategic pricing actions.declines in North America and Western Europe due to reduced traffic.
Reported EBIT decreased 2%, driven by higher selling40% reflecting lower revenues and administrative expense and grossthe following:
Gross margin contraction partially offset by higher revenues. Gross margin decreasedof approximately 150140 basis points driven bydue to lower marginsmargin in direct to consumer, in part reflecting increased promotional activity, higher product costs and unfavorable changes in standard foreign currency exchange rates, partiallyand increased logistics costs, slightly offset by higher ASP, net of discounts,lower product input costs and lower other costs. ocean freight rates.
Selling and administrative expense increaseddecrease of 1% due to higherlower operating overhead andexpense, largely offset by higher demand creation expense. Operating overhead expense decreased primarily as a result of lower wage-related expenses, while demand creation expense increased as a result of higher wage-related expenses and professional services costs. Demand creation expense increased as a result of increased advertising and marketing expense.costs.
FIRST NINE MONTHS OF FISCAL 20232024 COMPARED TO FIRST NINE MONTHS OF FISCAL 20222023
OnConverse revenues decreased 14% on a currency-neutral basis Converse revenues increased 10% for the first nine months of fiscal 2023 as revenue growthdeclines in North America and Western Europe and licensee markets waswere partially offset by declinesgrowth in Asia. Direct to consumer revenues increased 13%, driven by strong digital sales growth in North America. Combined unit sales within the wholesale and direct to consumer channels increased 1%decreased 12% and ASP decreased 2%, primarily drivenreflecting promotional activity in direct to consumer.
Wholesale revenues decreased 14% on a currency-neutral basis, as declines in North America and Western Europe were partially offset by growth in Asia.
Direct to consumer revenues decreased 14% on a currency-neutral basis driven by declines in North America while ASP increased 8%, driven by growthand Western Europe due to reduced traffic.
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Reported EBIT decreased 28% reflecting lower revenues and the following:
Gross margin contraction of approximately 160 basis points due to unfavorable changes in standard foreign currency exchange rates, higher other costs, and lower margin in direct to consumer, and strategic pricing actions.
Reported EBIT increased 4%, driven by higher revenues and gross margin expansion, partiallyslightly offset by higher selling and administrative expense. Gross margin increased approximately 120 basis points driven by higher ASP, net of discounts, lower otherproduct input costs and growth in licensee revenues, partially offset by higher product costs. ocean freight rates.
Selling and administrative expense increaseddecrease of 3% due to higherlower operating overhead and demand creation expense. Operating overhead expense increaseddecreased primarily as a result of higherlower wage-related expenses, higher professional services costs and lower bad debt recoveries. Demand creation expense increased due to higher advertising and marketing expense, partially offset by lower retail brand presentation costs.
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CORPORATE
THREE MONTHS ENDED FEBRUARY 28,NINE MONTHS ENDED FEBRUARY 28,
THREE MONTHS ENDEDTHREE MONTHS ENDEDNINE MONTHS ENDED
(Dollars in millions)(Dollars in millions)20232022% CHANGE20232022% CHANGE(Dollars in millions)FEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGEFEBRUARY 29, 2024FEBRUARY 28, 2023% CHANGE
RevenuesRevenues$12 $(19)— $13 $(56)— 
Earnings (Loss) Before Interest and TaxesEarnings (Loss) Before Interest and Taxes$(696)$(412)-69 %$(2,014)$(1,460)-38 %Earnings (Loss) Before Interest and Taxes$(874)$(696)-26 -26 %$(2,060)$(2,014)-2 -2 %
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 Converse, but managed through our central foreign exchange risk management program.
The Corporate loss before interest and taxes primarily consists of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to our corporate headquarters; unallocated insurance, benefit 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 the difference between actual foreign currency exchange rates and standard rates used to record non-functional currency denominated product purchases within the NIKE Brand geographic operating segments and Converse; related foreign currency hedge results; conversion gains and losses arising from remeasurement of monetary assets and liabilities in non-functional currencies; and certain other foreign currency derivative instruments.
THIRD QUARTER OF FISCAL 20232024 COMPARED TO THIRD QUARTER OF FISCAL 20222023
Corporate's loss before interest and taxes increased $284$178 million for the third quarter of fiscal 2023,2024, primarily due to the following:
an unfavorable change of $164$403 million primarily related to increased wage-related expenses,restructuring charges, $340 million reported as a component of consolidated Operating overhead expense;expense and $63 million reported as a component of consolidated gross margin;
an unfavorable change of $77$4 million primarily related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net;
a favorable change of $167 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross margin; and
a favorable change of $57 million primarily related to lower wage-related expenses, partially offset by increased professional services, reported as a component of consolidated Operating overhead expense.
FIRST NINE MONTHS OF FISCAL 2024 COMPARED TO FIRST NINE MONTHS OF FISCAL 2023
Corporate's loss before interest and taxes increased $46 million for the first nine months of fiscal 2024, primarily due to the following:
an unfavorable change of $403 million related to restructuring charges, $340 million reported as a component of consolidated Operating overhead expense and $63 million reported as a component of consolidated gross margin;
an unfavorable change of $44$88 million related to net favorable settlements of legal and insurance matters in the prior year as well as favorable activity in the prior year related to our strategic distributor partnership transition within APLA; these results are reported as a component of consolidated Other (income) expense, net; and
a favorable change in net foreign currency gains and losses of $13 millionprimarily related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, as well as net favorable settlements of legal matters in the prior year, partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, reported as a component of consolidated Other (income) expense, net.net;
FIRST NINE MONTHS OF FISCAL 2023 COMPARED TO FIRST NINE MONTHS OF FISCAL 2022
Corporate's loss before interest and taxes increased $554 million for the first nine months of fiscal 2023, primarily due to the following:
an unfavorable change of $366$25 million primarily related to increased professional services, partially offset by lower wage-related expenses, reported as a component of consolidated Operating overhead expense; and
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a favorablechange of $484 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross margin;margin.
an unfavorable change of $247 million primarily related to increased wage and other professional service expenses, reported as a component of consolidated Operating overhead expense;
an unfavorable change of $150 million primarily due to our strategic distributor partnership transition within APLA, including the loss recognized upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor in the second quarter of fiscal 2023, partially offset by settlements of legal matters, reported as a component of consolidated Other (income) expense, net; and
a favorable change in net foreign currency gains and losses of $221 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net.


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FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES
OVERVIEW
As 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 currency exchange rates. Our primary foreign currency exposures arise from the recording of transactions denominated in non-functional currencies and the translation of foreign currency 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 of operations, financial position and cash flows. We manage global foreign exchange risk centrally on a portfolio basis to address those risks material to NIKE, Inc. Our hedging policy is designed to partially or entirely offset the impact of exchange rate changes on the underlying net exposures being hedged. Where exposures are hedged, our program has the effect of delaying the impact of exchange rate movements on our Unaudited Condensed Consolidated Financial Statements; the length of the delay is dependent upon hedge horizons. We do not hold or issue derivative instruments for trading or speculative purposes. As of and for the three and nine months ended February 28, 2023,29, 2024, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K.10-K for the fiscal year ended May 31, 2023 (the "Annual Report").
Refer to Note 43 — Fair Value Measurements and Note 98 — Risk Management and Derivatives in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end. For additional information about our Foreign Currency Exposures and Hedging Practices, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of ourwithin the Annual Report on Form 10-K for the fiscal year ended May 31, 2022.Report.
TRANSACTIONAL EXPOSURES
We conduct business in various currencies and have transactions which subject us to foreign currency risk. Our most significant transactional foreign currency exposures are:
Product Costs — Product purchases denominated in currencies other than the functional currency of the transacting entity and factory input costs from the foreign currency adjustments program with certain factories.
Non-Functional Currency Denominated External Sales — A portion of our NIKE Brand and Converse revenues associated with European operations are earned in 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 generate a foreign currency exposure.
Other Costs — Non-functional 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, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies. These balance sheet items are subject to remeasurement which may create fluctuations in Other (income) expense, net within our consolidated resultsUnaudited Condensed Consolidated Statements of operations.Income.
MANAGING TRANSACTIONAL EXPOSURES
Transactional exposures are managed on a portfolio basis within our foreign currency risk management program. We manage these exposures by taking advantage of natural offsets and currency correlations that exist within the portfolio and may also elect to use currency forward and option contracts to hedge the remaining effect of exchange rate fluctuations on probable forecasted future cash flows, including certain product cost exposures, non-functional currency denominated external sales and other costs described above. Generally, these are accounted for as cash flow hedges, except for hedges of the embedded derivative components of the product cost exposures and other contractual agreements.hedges.
Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement and embedded derivative contracts are not formally designated as hedging instruments. Accordingly, changes in fair value of these instruments and are recognized in Other (income) expense, net.net within our Unaudited Condensed Consolidated Statements of Income and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged.
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TRANSLATIONAL EXPOSURES
Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar. Fluctuations in currency exchange rates create volatility in our reported results as 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 of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S. Dollars for consolidated reporting results in a cumulative translation adjustment to Accumulated other comprehensive income (loss) within Shareholders' equity. The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $16 million and a benefit of approximately $88 million for the three and nine months ended February 29, 2024, respectively, and a detriment of approximately $549 million and $2.5 billion$2,504 million for the three and nine months ended February 28, 2023, respectively, and a detriment of approximately $280 million and a benefit of $165 million for the three and nine months ended February 28, 2022, respectively. The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $20 million and $84 million for the three and nine months ended February 29, 2024, respectively, and a detriment of approximately $160 million and $729 million for the three and nine months ended February 28, 2023, respectively, and a detriment of approximately $84 million and a benefit of $45 million for the three and nine months ended February 28, 2022, respectively.
Management generally identifies hyper-inflationary markets as those markets whose cumulative inflation rate over a three-year period exceeds 100%. Management has concluded our Turkey subsidiary within our EMEA operating segment is operating in a hyper-inflationary markets. As a result, beginning in the first quarter of fiscal 2023, the functional currency of our Turkey subsidiary, changed from the local currency to the U.S. Dollar. As of and for the three and nine months ended February 28, 2023, this change did not have a material impact on our results of operations or financial condition, and we do not anticipate it will have a material impact in future periods based on current rates.
Prior to the completion of the sale of our Argentina entity within our APLA operating segment during the second quarter of fiscal 2023, Management concluded this subsidiary was operating in a hyper-inflationary market. As a result, beginning in the second quarter of fiscal 2019, the functional currency of our Argentina subsidiary changed from the local currency to the U.S. Dollar. As of and for the three and nine months ended February 28, 2023, this change did not have a material impact on our results of operations or financial condition.
MANAGING TRANSLATIONAL EXPOSURES
To minimize the impact of translating foreign currency denominated revenues and expenses into U.S. Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S. Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S. GAAP. We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments. The combination 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 currency translation impact on net earnings in the period the investments are sold. Hedges of the purchase of U.S. Dollar denominated available-for-sale investments are accounted 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 currency related gains and losses included in Other (income) expense, net had a favorable impact of approximately $16 million and an unfavorable impact of approximately $147 million and $508$86 million on our Income before income taxes for the three and nine months ended February 28, 2023.29, 2024, respectively.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW ACTIVITY
Cash provided (used) by operations was an inflow of $4,810 million for the first nine months of fiscal 2024 compared to $3,588 million for the first nine months of fiscal 2023, compared to $4,037 million for the first nine months of fiscal 2022.2023. Net income, adjusted for non-cash items, generated $4,805$5,096 million of operating cash inflow for the first nine months of fiscal 2023,2024, compared to $5,387$4,805 million for the first nine months of fiscal 2022.2023. The net change in working capital and other assets and liabilities resulted in a decrease to Cash provided (used) by operations of $286 million for the first nine months of fiscal 2024 compared to a decrease of $1,217 million for the first nine months of fiscal 2023 compared2023. The favorable net change in working capital was primarily impacted by favorable changes to a decreaseInventories due to reduced inventory purchases and improved lead times in the current period.
Cash provided (used) by investing activities was an inflow of $1,350$1,184 million for the first nine months of fiscal 2022.2024, compared to an inflow of $137 million for the first nine months of fiscal 2023, primarily driven by the net change in short-term investments (including sales, maturities and purchases). For the first nine months of fiscal 2023,2024, the net change in working capitalshort-term investments resulted in a cash inflow of $1,792 million compared to a cash inflow of $775 million for the prior yearfirst nine months of fiscal 2023.
Cash provided (used) by financing activities was relatively flat and impactedan outflow of $4,468 million for the first nine months of fiscal 2024 compared to $5,266 million for the first nine months of fiscal 2023. The decreased outflow was driven by unfavorable changeslower share repurchases of $3,214 million in Accounts payable and Accounts receivable,the first nine months of fiscal 2024 compared to $4,101 million in the first nine months of fiscal 2023, partially offset by favorable impacts from Inventories. These changes were, in part, due to reduced inventory purchaseshigher dividend payments of $1,609 million in the current period as we reduce our excess inventory and higher wholesale revenues, which carry a higher levelfirst nine months of days sales outstanding. Further impacting these changes was a lower available supply of inventoryfiscal 2024 compared to $1,488 million in the prior year due to supply chain constraints.first nine months of fiscal 2023.
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Cash provided (used) by investing activities was an inflow of $137 million for the first nine months of fiscal 2023, compared to an outflow of $1,711 million for the first nine months of fiscal 2022, primarily driven by the net change in short-term investments. For the first nine months of fiscal 2023, the net change in short-term investments (including sales, maturities and purchases) resulted in a cash inflow of $775 million compared to a cash outflow of $1,156 million for the first nine months of fiscal 2022.
Cash provided (used) by financing activities was an outflow of $5,266 million for the first nine months of fiscal 2023 compared to $3,456 million for the first nine months of fiscal 2022. The increased outflow in the first nine months of fiscal 2023 was driven by higher share repurchases of $4,101 million for the first nine months of fiscal 2023 compared to $2,923 million in the first nine months of fiscal 2022, as well as lower proceeds from stock option exercises, which resulted in a cash inflow of $413 million in the first nine months of fiscal 2023 compared to $959 million in the first nine months of fiscal 2022.
During the first nine months of fiscal 2023,2024, we repurchased a total of 38.430.3 million shares of NIKE's Class B Common Stock for $4.1 billion (an average price of $107.16 per share). In August 2022, we terminated the previous four-year, $15 billion share repurchase program approved by the Board of Directors in June 2018. Under this program, we repurchased 6.5 million shares for a total approximate cost of $710.0$3,206 million (an average price of $109.85$105.70 per share) during the first quarter of fiscal 2023 and 83.8 million shares for a total approximate cost of $9.4 billion (an average price of $111.82 per share) during the term of the program. Upon termination of the four-year, $15 billion program, we began purchasing shares under the new four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022. As of February 28, 2023,29, 2024, we hadhave repurchased 32.073.8 million shares at a cost of approximately $3.4$8.0 billion (an average price of $106.61$108.46 per share) under this new$18 billion share repurchase program. We continue to expect funding 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 needs and stock market conditions.
CAPITAL RESOURCES
On July 21, 2022, we filed a shelf registration statement (the “Shelf”"Shelf") with the U.S. Securities and Exchange Commission (the "SEC") which permits us to issue an unlimited amount of debt securities from time to time. The Shelf expires on July 21, 2025.
As of February 28, 2023,29, 2024, our committed credit facilities were unchanged from the information previously reported in our Form 10-K forwithin the fiscal year ended May 31, 2022.Annual Report. We currently have long-term debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively. Any changes to these ratings could result in interest rate and facility fee changes. As of February 28, 2023,29, 2024, we were in full compliance with the covenants under our facilities and believe it is unlikely we will fail to meet any of the covenants in the foreseeable future. As of February 28, 202329, 2024 and May 31, 2022,2023, no amounts were outstanding under our committed credit facilities.
On March 10, 2023,8, 2024, subsequent to the end of the third quarter of fiscal 2023,2024, we entered into a 364-day committed credit facility agreement with a syndicate of banks, which provides for up to $1 billion of borrowings, with thean option to increase borrowings up to $1.5 billion in total with lender approval. The facility matures on March 8, 2024,7, 2025, with an option to extend the maturity date byan additional 364 days. This facility replaces the prior $1 billion 364-day credit facility agreement entered into on March 11, 2022,10, 2023, which matured on March 10, 2023.8, 2024. Refer to Note 5 —4 – Short-term Borrowings and Credit Lines for additionalmore information.
Liquidity is also provided by our $3 billion commercial paper program. As of and for the three months ended February 28, 2023,29, 2024, we did not have any borrowings outstanding under our $3 billion program. We may issue commercial paper or other debt securities depending on general corporate needs. We currently have short-term debt ratings of A1+ and P1 from Standard and Poor's Corporation and Moody's Investor Services, respectively.
To date, in fiscal 2023,2024, we have not experienced difficulty accessing the capital or bankcredit markets; however, future volatility may increase costs associated with issuing commercial paper or other debt instruments or affect our ability to access those markets.
As of February 28, 2023,29, 2024, we had Cash and equivalents and Short-term investments totaling $10.8$10.6 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S. Treasury obligations and other investment grade fixed-income securities. Our fixed-income investments are exposed to both credit and interest rate risk. All of our investments are investment grade to minimize our credit risk. While individual securities have varying durations, as of February 28, 2023,29, 2024, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 10469 days.
We believe that existing Cash and equivalents, Short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.
ThereCONTRACTUAL OBLIGATIONS
As a result of renewals of, and additions to, outstanding endorsement contracts, cash payments due under these contracts have increased from what was reported within our Annual Report.
Obligations under endorsement contracts as of February 29, 2024, and significant contracts entered into through the date of this report were $9.9 billion, with $1.6 billion payable within 12 months.
Other than the changes reported above, there have been no significant changes to the material cash requirements reported inwithin our Annual Report on Form 10-K for the fiscal year ended May 31, 2022.
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Report.
OFF-BALANCE SHEET ARRANGEMENTS
As of February 28, 2023,29, 2024, 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 financial condition, results of operations, liquidity, capital expenditures or capital resources.
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NEW ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for recently adopted and issued accounting standards.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported 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 “Management's"Management's Discussion and Analysis of Financial Condition and Results of Operations”Operations" section of our most recentthe Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting estimates. Actual results could differ from these estimates. We are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes from the information previously reported under Part II, Item 7A ofwithin our Annual Report on Form 10-K for the fiscal year ended May 31, 2022.2023.
ITEM 4. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Securities Exchange Act of 1934, as amended (the "Exchange Act") reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sSEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible 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 Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of February 28, 2023.29, 2024.
We are continuing several transformation initiatives to centralize and simplify our business processes and systems. These are long-term initiatives, which we believe will enhance our internal control over financial reporting due to increased automation and further integration of related processes. We will continue to monitor our internal control over financial reporting for effectiveness throughout 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 likely to materially affect, our internal control over financial reporting.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND ANALYST REPORTS
Certain written and oral statements, other than purely historic information, including estimates, projections, statements relating to NIKE’sNIKE's business plans, objectives and expected operating or financial results and the assumptions upon which those statements are based, made or incorporated by reference from time to time by NIKE or its representatives in this report, other reports, filings with the SEC, press releases, conferences or otherwise, are “forward-looking statements”"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended.Act. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “project,” “will"believe," "anticipate," "expect," "estimate," "project," "will be,” “will" "will continue,” “will" "will likely result”result" or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties which may cause actual results to differ 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 reports filed on Forms 8-K, 10-Q and 10-K, and include, among others, the following: health epidemics, pandemics and similar outbreaks,risks relating to the enterprise initiative, including the COVID-19 pandemic; international, nationalrisk that NIKE is not able to identify opportunities to deliver anticipated cost savings, risks related to the preliminary nature of the estimate of the charges to be incurred in connection with the enterprise initiative, which is subject to change as NIKE refines the estimate over time, risks related to any delays in the timing for implementing the initiative or potential disruptions to NIKE's business or operations as it executes on the initiative, and local political, civil, economic and market conditions;other factors that may cause NIKE to be unable to achieve the expected benefits of the initiative; the size and growth of the overall athletic or leisure footwear, apparel and equipment markets; intense competition among designers, marketers, distributors and sellers of athletic or leisure footwear, apparel and equipment for consumers and endorsers; NIKE's ability to successfully innovate and compete in various categories; demographic changes; changes in consumer preferences; popularity of particular designs, categories of products and sports; seasonal and geographic demand for NIKE products; difficulties in anticipating or forecasting changes in consumer preferences, consumer demand for NIKE products and the various market factors described above; international, national and local political, civil, economic and market conditions, including high, and increases in, inflation and interest rates; our ability to execute on our sustainability strategy and achieve our sustainability-related goals and targets, including sustainable product offerings; difficulties in implementing, operating and maintaining NIKE’sNIKE's increasingly complex information technology systems and controls, including, without limitation, the systems related to demand and supply planning and inventory control; interruptions in data and information technology 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 with shorter lead times, and discounts, order cancellations and returns; the ability of NIKE to sustain, manage or forecast its growth and inventories; the size, timing and mix of purchases of NIKE’sNIKE's products; increases in the cost of materials, labor and energy used to manufacture products; new product development and introduction; the ability to secure and protect trademarks, patents and other intellectual property; product performance and quality; customer service; adverse publicity and an inability to maintain NIKE's reputation and brand image, including without limitation, through social media or in connection with brand damaging events; the loss of significant customers or suppliers; dependence on distributors and licensees; business disruptions; increased costs of freight and transportation to meet delivery deadlines; increases in borrowing costs due to any decline in NIKE’sNIKE's debt ratings; changes in business strategy or development plans; general risks associated with doing business outside of the United States, including, without limitation, exchange rate fluctuations, inflation, import duties, tariffs, quotas, sanctions, political and economic instability, conflicts and terrorism; the potential impact of new and existing laws, regulations or policy, including, without limitation, tariffs, import/export, trade, wage and hour or labor and immigration regulations or policies; changes in government regulations; the impact of, including business and legal developments relating to, climate change, extreme weather conditions and natural disasters; litigation, regulatory proceedings, sanctions or any other claims asserted against NIKE; the ability to attract and retain qualified employees, and any negative public perception with respect to key personnel or our corporate culture, values or purpose; the effects of NIKE’sNIKE's decision to invest in or divest of businesses or capabilities; health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic; and other factors referenced or incorporated by reference in this report and other reports.
Investors should also be aware that while NIKE does, from time to time, communicate with securities analysts, it is against NIKE's policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that NIKE agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, NIKE has a policy against confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of NIKE.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Refer to Note 1312 — Contingencies within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements, which is incorporated by reference herein.
ITEM 1A. RISK FACTORS
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 31, 2022.2023.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In June 2022, the Board of Directors approved a four-year, $18 billion share repurchase program. As of February 28, 2023,29, 2024, the Company had repurchased 32.073.8 million shares at an average price of $106.61$108.46 per share for a total approximate cost of $3.4$8.0 billion under the program.
All share repurchases were made under NIKE's publicly announced program, and there are no other programs under which the Company repurchases shares. The following table presents a summary of share repurchases made during the quarter ended February 28, 2023:29, 2024:
PERIODTOTAL NUMBER OF SHARES PURCHASEDAVERAGE PRICE
PAID PER SHARE
APPROXIMATE DOLLAR
VALUE OF SHARES THAT
MAY YET BE PURCHASED
UNDER THE PLAN
OR PROGRAM
(IN MILLIONS)
December 1 - December 31, 20226,993,677$111.27 $15,334 
January 1 - January 31, 20233,040,909$125.65 $14,952 
February 1 - February 28, 20232,902,915$123.50 $14,594 
12,937,501$117.39 
PERIODTOTAL NUMBER OF SHARES PURCHASEDAVERAGE PRICE
PAID PER SHARE
APPROXIMATE DOLLAR
VALUE OF SHARES THAT
MAY YET BE PURCHASED
UNDER THE PLAN
OR PROGRAM
(IN MILLIONS)
December 1 - December 31, 20233,355,605$116.52 $10,468 
January 1 - January 31, 20243,119,852$103.78 $10,144 
February 1 - February 29, 20241,446,976$104.31 $9,993 
7,922,433$109.28 
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ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the fiscal quarter ended February 29, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K), except as follows:
On December 28, 2023, Heidi O'Neill, President, Consumer, Product & Brand, adopted a Rule 10b5-1 trading arrangement for the sale of up to 138,530 shares of our Class B Common Stock, subject to certain conditions. The arrangement's expiration date is December 26, 2025.
On February 7, 2024, Johanna Nielsen, Vice President, Corporate Controller, adopted a Rule 10b5-1 trading arrangement for the sale of up to 468 shares of our Class B Common Stock, subject to certain conditions. The arrangement's expiration date is May 12, 2025.
On February 14, 2024, Matthew Friend, Executive Vice President and Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement for the sale of up to 49,389 shares of our Class B Common Stock, subject to certain conditions. The arrangement's expiration date is May 15, 2025.
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ITEM 6. EXHIBITS
(a) EXHIBITS:
3.
Exhibits:
3.1
3.2
4.1
4.2
10.1
31.1
31.2
32.1†
32.2†
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema
101.CALInline XBRL Taxonomy Extension Calculation Linkbase
101.DEFInline XBRL Taxonomy Extension Definition Document
101.LABInline XBRL Taxonomy Extension Label Linkbase
101.PREInline XBRL Taxonomy Extension Presentation Linkbase
104Cover Page Interactive Data File - formatted in Inline XBRL and included in Exhibit 101
Furnished herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NIKE, INC.
an Oregon Corporation
By:
/s/ MATTHEW FRIEND
Matthew Friend
Chief Financial Officer and Authorized Officer
Date:April 6, 20234, 2024
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