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Item 7. Management’s Discussion and Analysis

2024-07-25 compared with 2023-07-20 · 193 added, 201 removed, 482 unchanged (45% of the section changed)

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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 wholesale accounts and to a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.

We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly 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" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.

Through the Consumer Direct Acceleration strategy, we are focused on creating the marketplace of the future with more premium, consistent and seamless consumer experiences, leading with digital and our owned stores, as well as select wholesale partners.

In addition, our product creation and marketing organizations are aligned to a consumer construct focused on sports dimensions through Men's, Women's and Kids', which allows us to better serve consumer needs.

We continue to invest in a new Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering, and other areas to create an end-to-end technology foundation, which we believe will further accelerate our digital transformation.

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.

FINANCIAL HIGHLIGHTS

• In fiscal 2023, NIKE, Inc.

achieved record Revenues of $51.2 billion, which increased 10% and 16% on a reported and currency-neutral basis, respectively

Our strategy is to achieve sustainable profitable long-term revenue growth by creating innovative, "must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.

We are focused on growing the entire marketplace by continuing to invest in our NIKE Direct operations while also increasing investment to elevate and differentiate our brand experience within our wholesale partners.

In addition, in the third quarter of fiscal 2024, we announced an enterprise-wide initiative to prioritize investment to fuel future growth including taking steps to streamline the organization.

This resulted in a net reduction of our global workforce and we expect to reinvest a majority of the future annual wage savings from these actions to support this initiative.

We also continue to invest in a global Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering and other areas to create an end-to end technology foundation to serve our consumer with speed and scale.

FISCAL 2024 FINANCIAL HIGHLIGHTS

Revenues for fiscal 2024 were $51.4 billion compared to $51.2 billion for fiscal 2023

• NIKE Direct revenues grew 1% from $21.3 billion in fiscal 2023 to $21.5 billion in fiscal 2024, and represented approximately 44% of total NIKE Brand revenues for fiscal 2024

• Gross margin for the fiscal year decreased 250 basis points to 43.5% primarily driven by higher product costs, higher markdowns and unfavorable changes in foreign currency exchange rates, partially offset by strategic pricing actions

• Inventories as of May 31, 2023 were $8.5 billion, flat compared to the prior year, driven by the actions we took throughout fiscal 2023 to manage inventory levels

• NIKE Brand wholesale revenues increased 1% on a reported basis and 2% on a currency-neutral basis

• Gross margin increased 110 basis points to 44.6%, primarily due to strategic pricing actions and lower ocean freight rates and logistics costs, partially offset by higher product input costs, lower margin in NIKE Direct and unfavorable changes in net foreign currency exchange rates

• Income before income taxes included a restructuring charge of $443 million related to the streamlining of our organization, primarily associated with employee severance costs and accelerated stock-based compensation expense.

For more information, refer to Note 19 — Restructuring within the accompanying Notes to the Consolidated Financial Statements.

• Inventories as of May 31, 2024 were $7.5 billion, a decrease of 11% compared to the prior year, primarily due to a decrease in units

• We returned $6.4 billion to our shareholders in fiscal 2024 through share repurchases and dividends

• Return on Invested Capital ("ROIC") as of May 31, 2023 was 31.5% compared to 46.5% as of May 31, 2022.

ROIC is considered a non-GAAP financial measure, see "Use of Non-GAAP Financial Measures" for further information.

• Return on Invested Capital ("ROIC") was 34.9% as of May 31, 2024, compared to 31.5% as of May 31, 2023.

ROIC is considered a non-GAAP financial measure, see "Use of Non-GAAP Financial Measures" for additional information.

For discussion related to the results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022 refer to Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2023 Form 10-K, which was filed with the United States Securities and Exchange Commission on July 20, 2023.

CURRENT ECONOMIC CONDITIONS AND MARKET DYNAMICS

• Consumer Spending:

Our fiscal 2023 growth in Revenues reflects strong demand for our products despite ongoing uncertainty in the global economy.

We will continue to closely monitor macroeconomic conditions, including potential impacts of inflation and rising interest rates on consumer behavior.

• Inflationary Pressures:

Inflationary pressures, including higher product input, freight and logistics costs negatively impacted gross margin for fiscal 2023.

The strategic pricing actions we have taken partially offset the impacts of these higher costs.

• Supply Chain Volatility:

Supply chain challenges, macroeconomic conditions and the impact of the COVID-19 pandemic on the manufacturing of our product disrupted the flow of seasonal product in fiscal 2022 and the first quarter of fiscal 2023, resulting in elevated inventory levels at the end of the first quarter of fiscal 2023.

Throughout fiscal 2023, we took action to reduce excess inventory by decreasing future inventory purchases and increasing promotional activity.

These actions, along with the stabilization of inventory transit times in the second and third quarters of fiscal 2023, resulted in the normalization of the seasonal flow of product in the fourth quarter of fiscal 2023.

2024 FORM 10-K 30

• COVID-19 Impacts in Greater China:

During the first and second quarters of fiscal 2023, we managed through continued temporary store closures and reduced retail traffic in Greater China, primarily due to COVID-19 related local government restrictions.

At the beginning of the third quarter of fiscal 2023, the government mandated restrictions were lifted and we experienced improvement in physical retail traffic.

CURRENT ECONOMIC CONDITIONS AND OTHER FACTORS IMPACTING OUR BUSINESS

The operating environment could remain volatile in fiscal 2025 as the risk remains that these factors, among others, could have a material adverse impact on our future revenue growth as well as overall profitability.

• Consumer Spending:

In fiscal 2024, consumers continued to spend more cautiously as the global economy remains uncertain and promotional activity remained high across our industry.

We will continue to closely monitor macroeconomic and geopolitical conditions, including potential impacts of inflation and higher interest rates on consumer spending behavior.

• Cost Inflationary Pressures:

Inflationary pressures, including higher product input costs, continued to negatively impact our gross margin with more pronounced impacts in the first nine months of fiscal 2024.

These negative impacts were more than offset by the strategic pricing actions we have taken through fiscal 2024, as well as improvements in ocean freight rates and logistics costs we started to realize at the beginning of the second quarter of fiscal 2024.

• Supply Chain Conditions:

During fiscal 2024 and as of May 31, 2024, our inventory levels were healthy, reflecting our proactive actions taken to manage our inventory supply.

• Foreign Currency Impacts:

As a global company with significant operations outside the United States, we are exposed to risk arising from foreign currency exchange rates.

For fiscal 2023, fluctuations in foreign currency exchange rates negatively impacted our reported Revenues by approximately $2,859 million, reducing our revenue growth rate to 10% on a reported basis from 16% on a currency-neutral basis.

Foreign currency impacts, net of hedges, also reduced our reported Income before income taxes by approximately $1,023 million.

For further information, refer to "Foreign Currency Exposures and Hedging Practices".

The operating environment could remain volatile in fiscal 2024 as the risk exists that worsening macroeconomic conditions could have a material adverse impact on our future revenue growth as well as overall profitability.

For more information refer to Item 1A Risk Factors, within Part I, Item 1.

RECENT DEVELOPMENTS

During the first and second quarters of fiscal 2023, we completed the sale of our entity in Chile and our entities in Argentina and Uruguay to third-party distributors, respectively.

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.

As a global company with significant operations outside the United States, we are exposed to risk arising from changes in foreign currency exchange rates.

For additional information, refer to "Foreign Currency Exposures and Hedging Practices".

• Product Lifecycle Management:

We are currently reducing the supply of certain footwear products as we scale new and innovative products across the marketplace.

This had a negative impact on our revenues, specifically NIKE Brand Digital revenues in the fourth quarter of fiscal 2024.

For more information refer to Item 1A Risk Factors, within Part 1, Item 1, Business.

USE OF NON-GAAP FINANCIAL MEASURES

Throughout this Annual Report on Form 10-K, we discuss non-GAAP financial measures, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with U.S.

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.

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Total NIKE, Inc.

EBIT for fiscal 2023 and fiscal 2022 is as follows:

EBIT for fiscal 2024, 2023 and 2022 are as follows:

YEAR ENDED MAY 31,

(Dollars in millions)

2024 2023 2022

Net income $ 5,700 $ 5,070 $ 6,046

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EBIT divided by total NIKE, Inc.

Our EBIT Margin calculation for fiscal 2023 and fiscal 2022 is as follows:

Our EBIT Margin calculation for fiscal 2024, 2023 and 2022 are as follows:

YEAR ENDED MAY 31,

(Dollars in millions)

2024 2023 2022

Earnings before interest and taxes $ 6,539 $ 6,195 $ 6,856

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RETURN ON INVESTED CAPITAL 34.9% 31.5%

(1) Equals Earnings before interest and taxes multiplied by the effective tax rate as of the respective quarter end.

(1) Equals Earnings before interest and taxes multiplied by the effective tax rate as of each of the respective quarter ends.

(2) Total debt includes the following:

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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.

Beginning in fiscal 2025, with the continued rollout of a new Enterprise Resource Planning Platform, the Company will replace wholesale equivalent revenues and gross margin drivers with a comparable U.S.

COMPARABLE STORE SALES

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(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 metric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores.

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Women's 8,586 8,606 0 % 1 % 8,273 4 % 11 %

NIKE Kids' 5,038 4,874 3 % 10 % 4,882 0 % 0 %

5,111 5,038 1 % 1 % 4,874 3 % 10 %

Jordan Brand 6,988 6,589 6 % 7 % 5,122 29 % 35 %

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(1) The percent change excluding currency changes and the presentation of wholesale equivalent revenues represent non-GAAP financial measures.

For further information, see "Use of Non-GAAP Financial Measures".

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.

(4) As a result of the Consumer Direct Acceleration strategy, announced in fiscal 2021, the Company is now organized around a consumer construct of Men's, Women's and Kids'.

Beginning in the first quarter of fiscal 2022, unisex products are classified within Men's, and Jordan Brand revenues are separately reported.

Certain prior year amounts were reclassified to conform to fiscal 2022 presentation.

These changes had no impact on previously reported consolidated results of operations or shareholders' equity.

(5) Others include products not allocated to Men's, Women's, NIKE Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer.

(4) Others include products not allocated to Men's, Women's, Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer.

2024 FORM 10-K 34

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FISCAL 2024 COMPARED TO FISCAL 2023

Revenues were $51.2 billion in fiscal 2023, which increased 10% and 16% compared to fiscal 2022 on a reported and currency-neutral basis, respectively.

The increase was due to higher revenues in North America, Europe, Middle East & Africa ("EMEA"), APLA and Greater China, which contributed approximately 7, 6, 2 and 1 percentage points to NIKE, Inc.

Revenues, respectively.

Revenues for fiscal 2024 were $51.4 billion compared to $51.2 billion for fiscal 2023.

On a currency-neutral basis, NIKE, Inc.

Revenues increased 1%, as higher revenues in Greater China and Asia Pacific & Latin America ("APLA"), which each increased NIKE, Inc.

Revenues by 1 percentage point, were partially offset by lower revenues in Converse, which reduced NIKE, Inc.

Revenues by approximately 1 percentage point.

• NIKE Brand revenues, which represented over 90% of NIKE, Inc.

Revenues, increased 10% and 16% on a reported and currency-neutral basis, respectively.

This increase was primarily due to higher revenues in Men's, the Jordan Brand, Women's and Kids' which grew 17%, 35%,11% and 10%, respectively, on a wholesale equivalent basis.

• NIKE Brand footwear revenues increased 20% on a currency-neutral basis, due to higher revenues in Men's, the Jordan Brand, Women's and Kids'.

Unit sales of footwear increased 13%, while higher average selling price ("ASP") per pair contributed approximately 7 percentage points of footwear revenue growth.

Higher ASP was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and growth in the size of our NIKE Direct business, partially offset by lower NIKE Direct ASP.

• NIKE Brand apparel revenues increased 8% on a currency-neutral basis, primarily due to higher revenues in Men's.

Unit sales of apparel increased 4%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth.

Higher ASP was primarily due to higher full-price ASP and growth in the size of our NIKE Direct business, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.

• NIKE Direct revenues increased 14% from $18.7 billion in fiscal 2022 to $21.3 billion in fiscal 2023.

On a currency-neutral basis, NIKE Direct revenues increased 20% primarily driven by NIKE Brand Digital sales growth of 24%, comparable store sales growth of 14% and the addition of new stores.

For further information regarding comparable store sales, including the definition, see "Comparable Store Sales".

Revenues, increased 1% on both a reported and currency-neutral basis.

The increase, on a currency-neutral basis, was primarily due to higher revenues in the Jordan Brand and Men's.

• NIKE Brand footwear revenues increased 1% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand, Men's and Women's.

Unit sales of footwear decreased 2%, while higher average selling price ("ASP") per pair contributed approximately 3 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• NIKE Brand apparel revenues were flat on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, offset by higher revenues in Kids'.

Unit sales of apparel decreased 9%, 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, off-price and NIKE Direct ASPs.

• NIKE Brand wholesale revenues increased 1% on a reported basis and 2% on a currency-neutral basis, compared to fiscal 2023.

Higher revenues in Greater China and APLA were partially offset by lower revenues in North America.

• NIKE Direct revenues increased 1% to $21.5 billion in fiscal 2024 compared to $21.3 billion in fiscal 2023.

On a currency-neutral basis, NIKE Direct revenues increased 1%, primarily driven by comparable store sales growth of 3% and the addition of new stores, partially offset by declines in NIKE Brand Digital sales of 3%, reflecting reduced digital traffic.

For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales".

NIKE Brand Digital sales were $12.1 billion for fiscal 2024 compared to $12.4 billion for 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 Consolidated Financial Statements.

2024 FORM 10-K 35

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For fiscal 2024, our consolidated gross profit increased 3% to $22,887 million compared to $22,292 million for fiscal 2023.

Gross margin decreased 250 basis points to 43.5% for fiscal 2023 compared to 46.0% for fiscal 2022 due to the following:

*Wholesale equivalent

The decrease in gross margin for fiscal 2023 was primarily due to:

• Higher NIKE Brand product costs, on a wholesale equivalent basis, primarily due to higher input costs and elevated inbound freight and logistics costs as well as product mix;

• Lower margin in our NIKE Direct business, 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;

• Unfavorable changes in net foreign currency exchange rates, including hedges;

• Lower off-price margin, on a wholesale equivalent basis.

Gross margin increased 110 basis points to 44.6% for fiscal 2024 compared to 43.5% for fiscal 2023 due to the following:

The increase in gross margin for fiscal 2024 was primarily due to:

• Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 200 basis points), primarily due to strategic pricing actions;

• Lower NIKE Brand product costs, on a wholesale equivalent basis (increasing gross margin approximately 10 basis points), primarily due to lower ocean freight rates and logistics costs largely offset by higher product input costs;

• Lower other costs (increasing gross margin approximately 10 basis points).

This was partially offset by:

• Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis, due primarily to strategic pricing actions and product mix;

• Lower other costs, primarily due to higher inventory obsolescence reserves recognized in Greater China in the fourth quarter of fiscal 2022.

• Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 40 basis points);

• Lower margin in our NIKE Direct business (decreasing gross margin approximately 40 basis points);

• Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 20 basis points);

• Restructuring charges (decreasing gross margin approximately 10 basis points).

TOTAL SELLING AND ADMINISTRATIVE EXPENSE

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FISCAL 2024 COMPARED TO FISCAL 2023

Demand creation expense increased 5% for 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 4 percentage points.

Operating overhead expense increased 12%, primarily due to higher wage-related expenses, NIKE Direct variable costs, strategic technology enterprise investments and other administrative costs.

Changes in foreign currency exchange rates decreased Operating overhead expense by approximately 3 percentage points.

Demand creation expense increased 6% for fiscal 2024, primarily due to higher advertising and marketing expense, digital marketing and sports marketing expense.

Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.

Operating overhead expense was flat, as lower wage-related expenses and lower technology spend were offset by restructuring charges.

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 19 — Restructuring within the accompanying Notes to the Consolidated Financial Statements.

2024 FORM 10-K 36

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FISCAL 2024 COMPARED TO FISCAL 2023

Other (income) expense, net increased from $181 million of other income, net in fiscal 2022 to $280 million in the current fiscal year, primarily due to a net favorable change in foreign currency conversion gains and losses, including hedges, and the one-time charge related to the deconsolidation of our Russian operations recognized in the prior year.

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 18 — Acquisitions and Divestitures within the accompanying Notes to the Consolidated Financial Statements.

Other (income) expense, net decreased from $280 million of other income, net in fiscal 2023 to $228 million in the current fiscal year, 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.

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.

For more information related to the sale of our entities in Argentina and Uruguay to a third-party distributor, see Note 18 — Divestitures within the accompanying Notes to the 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 an unfavorable impact on our Income before income taxes of $68 million for fiscal 2024.

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FISCAL 2024 COMPARED TO FISCAL 2023

Our effective tax rate was 18.2% for fiscal 2023, compared to 9.1% for fiscal 2022, primarily due to decreased benefits from stock-based compensation and a non-cash, one-time benefit in the prior year related to the onshoring of certain non-U.S.

intangible property ownership rights.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022 that includes, 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 is effective for NIKE beginning June 1, 2023.

Based on our current analysis of the provisions, we do not expect these tax law changes to have a material impact on our financial statements;

however, we will continue to evaluate their impact as further information becomes available.

Our effective tax rate was 14.9% for fiscal 2024, compared to 18.2% for fiscal 2023, primarily due to changes in earnings mix and one-time items including the benefit provided by the delay of the effective date of certain U.S.

foreign tax credit regulations in the first quarter of fiscal 2024.

The OECD and the Inclusive Framework has put forth Pillar Two proposals that ensure a minimal level of taxation.

Several countries in which we operate, including several European Union member states, have adopted domestic legislation to implement the Inclusive Framework's global corporate minimum tax rate of fifteen percent which will be effective for NIKE beginning June 1, 2024.

Other countries are also actively considering changes to their tax laws to adopt certain parts of the Inclusive Framework's proposals.

Based on our current analysis of Pillar Two provisions, we do not expect these tax law changes to have a material impact on our Consolidated Financial Statements;

however, we will continue to evaluate their impact as additional information becomes available.

2024 FORM 10-K 37

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(1) The percent change excluding currency changes represents a non-GAAP financial measure.

For further information, see "Use of Non-GAAP Financial Measures".

(2) For additional information on the transition of our NIKE Brand businesses within our CASA territory to a third-party distributor, see Note 18 — Acquisitions and Divestitures of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report.

For additional information, see "Use of Non-GAAP Financial Measures".

(2) For additional information on the transition of our NIKE Brand businesses within our Central and South America ("CASA") territory to a third-party distributor, see Note 18 — Divestitures of the Notes to Consolidated Financial Statements.

(3) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

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EBIT and EBIT Margin represent non-GAAP financial measures.

See "Use of Non-GAAP Financial Measures" for further information.

See "Use of Non-GAAP Financial Measures" for additional information.

2024 FORM 10-K 38

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FISCAL 2024 COMPARED TO FISCAL 2023

• North America revenues increased 18% on a currency-neutral basis, primarily due to higher revenues in Men's and the Jordan Brand.

NIKE Direct revenues increased 18%, driven by strong digital sales growth of 23%, comparable store sales growth of 9% and the addition of new stores.

• Footwear revenues increased 22% on a currency-neutral basis, primarily due to higher revenues in Men's and the Jordan Brand.

Unit sales of footwear increased 17%, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity as well as lower available inventory supply in the prior period and a lower mix of full-price sales.

• Apparel revenues increased 9% on a currency-neutral basis, primarily due to higher revenues in Men's.

Unit sales of apparel increased 7%, while higher ASP per unit contributed approximately 2 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, reflecting higher promotional activity.

Reported EBIT increased 7% due to higher revenues and the following:

• Gross margin contraction of 310 basis points primarily due to higher product costs, reflecting higher input costs and inbound freight and logistics costs and product mix, 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 strategic pricing actions and product mix.

• Selling and administrative expense increased 15% due to higher operating overhead and demand creation expense.

The increase in operating overhead expense was primarily due to higher wage-related costs and higher NIKE Direct variable costs, in part due to new store additions.

Demand creation expense increased primarily due to higher sports marketing expense and an increase in digital marketing.

• North America revenues decreased 1% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, partially offset by higher revenues in the Jordan Brand.

Wholesale revenues decreased 2%, primarily reflecting liquidation of excess inventory in the prior year.

NIKE Direct revenues increased 1%, primarily driven by the addition of new stores, partially offset by a decline in digital sales of 1%.

Comparable store sales for fiscal 2024 were flat.

• Footwear revenues decreased 2% 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 7%, while higher ASP per pair contributed approximately 5 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.

• Apparel revenues were flat on a currency-neutral basis due to lower revenues in Men's, Women's and the Jordan Brand, offset by higher revenues in Kids'.

Unit sales of apparel decreased 6%, while higher ASP per unit contributed approximately 6 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price ASP.

Reported EBIT increased 7% reflecting lower revenues and the following:

• Gross margin expansion of 220 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.

Lower product costs were primarily due to lower ocean freight rates and logistics costs, partially offset by higher product input costs.

• Selling and administrative expense increase of 1% due to higher demand creation expense, partially offset by lower operating overhead expense.

The increase in demand creation expense was primarily due to higher digital marketing and sports marketing expense.

Operating overhead expense decreased primarily due to lower wage-related expenses, partially offset by higher other administrative costs.

2024 FORM 10-K 39

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FISCAL 2024 COMPARED TO FISCAL 2023

• EMEA revenues increased 21% on a currency-neutral basis, due to higher revenues in Men's, the Jordan Brand, Women's and Kids'.

NIKE Direct revenues increased 33%, driven primarily by strong digital sales growth of 43% and comparable store sales growth of 22%.

• Footwear revenues increased 25% on a currency-neutral basis, due to higher revenues in Men's, the Jordan Brand, Women's and Kids'.

Unit sales of footwear increased 9%, while higher ASP per pair contributed approximately 16 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct.

• Apparel revenues increased 14% on a currency-neutral basis, primarily due to higher revenues in Men's.

Unit sales of apparel increased 2%, while higher ASP per unit contributed approximately 12 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.

Reported EBIT increased 7% due to higher revenues and the following:

• Gross margin contraction of 60 basis points primarily due to higher product costs reflecting higher input costs, inbound freight and logistics costs and product mix, higher other costs and unfavorable changes in standard foreign currency exchange rates.

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 increased 4% due to higher operating overhead and demand creation expense.

Operating overhead expense increased primarily due to higher wage-related expenses and other administrative costs, partially offset by favorable changes in foreign currency exchange rates.

Demand creation expense increased primarily due to higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates.

• EMEA revenues were flat on a currency-neutral basis, primarily due to lower revenues in Women's and Kids', offset by higher revenues in Men's.

Wholesale revenues were flat.

NIKE Direct revenues were flat as a decline in digital sales of 5% was offset by comparable store sales growth of 7% and the addition of new stores.

• Footwear revenues increased 1% on a currency-neutral basis, primarily due to higher revenues in Men's, partially offset by lower revenues in Kids'.

Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 5 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.

• Apparel revenues decreased 6% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's.

Unit sales of apparel decreased 17%, 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 4% reflecting higher revenues and the following:

• Gross margin contraction of 110 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, as well as lower other costs and lower product costs, reflecting lower ocean freight rates and logistics costs.

• Selling and administrative expense increase of 3% due to higher demand creation and operating overhead expense.

Demand creation expense increased primarily due to higher advertising and marketing expense, unfavorable changes in foreign exchange rates and higher sports marketing expense.

Operating overhead expense increased primarily due to unfavorable changes in foreign currency exchange rates.

2024 FORM 10-K 40

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FISCAL 2024 COMPARED TO FISCAL 2023

• Greater China revenues increased 4% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand, partially offset by lower revenues in Men's and Women's.

NIKE Direct revenues increased 5%, due to comparable store sales growth of 9% and the addition of new stores, partially offset by digital sales declines of 4%.

• Footwear revenues increased 8% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand and Men's.

Unit sales of footwear increased 7%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.

Higher ASP per pair was primarily due to higher NIKE Direct ASP and a higher mix of full-price sales, largely offset by a lower mix of NIKE Direct sales.

• Apparel revenues decreased 7% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's.

Unit sales of apparel decreased 8%, while higher ASP per unit contributed approximately 1 percentage point of apparel revenue growth.

Higher ASP per unit was primarily due to a higher mix of full price sales, partially offset by lower off-price ASP.

Reported EBIT decreased 3% due to lower revenues and the following:

• Gross margin expansion of approximately 140 basis points, primarily due to higher inventory obsolescence reserves recognized in the fourth quarter of fiscal 2022, favorable changes in standard foreign currency exchange rates and higher full-price ASP, net of discounts, in part due to product mix.

This was partially offset by higher product costs reflecting higher input costs and product mix.

• Selling and administrative expense was flat due to increased operating overhead expense offset by lower demand creation expense.

The increase in operating overhead expense was primarily due to higher wage-related expenses and other administrative costs, partially offset by favorable changes in foreign currency exchange rates.

Demand creation expense decreased 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.

• 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%, driven by comparable store sales growth of 1% and the addition of new stores, partially offset by a decline in digital sales of 8%.

• Footwear revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.

Unit sales of footwear increased 8%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points.

Lower ASP per pair was primarily due to lower NIKE Direct ASP, partially offset by higher full-price ASP.

• Apparel revenues increased 14% on a currency-neutral basis, primarily due to higher revenues in Men's and Women's.

Unit sales of apparel increased 7%, while higher ASP per unit contributed approximately 7 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.

Reported EBIT increased 1% reflecting higher revenues and the following:

• Gross margin contraction of approximately 80 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates, partially offset by higher full-price ASP, net of discounts, and lower other costs.

The higher full-price ASP, net of discounts, was largely due to strategic pricing actions, partially offset by 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 advertising and marketing expense and retail brand presentation expense, partially offset by favorable changes in foreign currency exchange rates.

Operating overhead expense increased primarily due to higher other administrative costs, partially offset by favorable changes in foreign currency exchange rates.

2024 FORM 10-K 41

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EARNINGS BEFORE INTEREST AND TAXES $ 1,885 $ 1,932 -2 % $ 1,896 2 %

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.

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This completed the transition of our NIKE Brand businesses within our CASA marketplace, which now reflects a full distributor operating model.

For more information see Note 18 — Acquisitions and Divestitures within the accompanying Notes to the Consolidated Financial Statements.

For more information see Note 18 — Divestitures within the accompanying Notes to the Consolidated Financial Statements.

FISCAL 2024 COMPARED TO FISCAL 2023

• APLA revenues increased 17% on a currency-neutral basis due to higher revenues across nearly all territories, led by Southeast Asia and India, Korea and Japan.

The 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 growth in Men's, Women's and the Jordan Brand.

NIKE Direct revenues increased 22%, driven by digital sales growth of 23% and comparable store sales growth of 28%.

• Footwear revenues increased 19% on a currency-neutral basis, primarily due to higher revenues in Men's, Women's and the Jordan Brand.

Unit sales of footwear increased 16%, while higher ASP per pair contributed approximately 3 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP and growth in NIKE Direct, partially offset by lower NIKE Direct ASP.

• Apparel revenues increased 13% on a currency-neutral basis, primarily due to higher revenues in Men's.

Unit sales of apparel increased 9%, 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 off-price ASPs, partially offset by lower NIKE Direct ASP.

Reported EBIT increased 2% due to higher revenues and the following:

• Gross margin contraction of approximately 190 basis points primarily due to higher product costs, reflecting product mix and higher input costs, as well as unfavorable changes in standard foreign currency exchange rates.

This was partially offset by higher full-price ASP, net of discounts, due to product mix and strategic pricing actions.

• Selling and administrative expense increased 8% due to higher operating overhead and demand creation expense.

Operating overhead expense increased primarily due to higher wage-related expenses and an increase in NIKE Direct variable costs, partially offset by favorable changes in foreign currency exchange rates.

Demand creation expense increased primarily due to higher sports marketing expense and higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates.

• APLA revenues increased 5% on a currency-neutral basis primarily due to higher revenues in Southeast Asia & India, Mexico and Japan.

Within our CASA territory, the transition of our Chile, Argentina and Uruguay entities to a third-party distributor operating model did not have a material impact on APLA revenues.

Revenues increased due to overall growth in Men's, Women's, the Jordan Brand and Kids'.

Wholesale revenues increased 6%.

NIKE Direct revenues increased 4%, driven by comparable store sales growth of 10% and the addition of new stores, partially offset by a decline in digital sales of 2%.

• Footwear revenues increased 7% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.

Unit sales of footwear increased 6%, 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, off-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• Apparel revenues decreased 2% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, partially offset by higher revenues in the Jordan Brand.

Unit sales of apparel decreased 9%, while higher ASP per unit contributed approximately 7 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price ASP, off-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

Reported EBIT decreased 2% reflecting higher revenues and the following:

• Gross margin contraction of approximately 220 basis points primarily due to unfavorable changes in standard foreign currency exchange rates, lower margin in NIKE Direct and higher product costs, reflecting higher product input costs and product mix.

This was partially offset by higher full-price ASP, net of discounts, primarily due to product mix and strategic pricing actions.

• Selling and administrative expense increase of 4% due to higher demand creation and operating overhead expense.

Demand creation expense increased primarily due to higher digital marketing and sports marketing expense.

Operating overhead expense increased primarily due to higher other administrative costs.

2024 FORM 10-K 42

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FISCAL 2024 COMPARED TO FISCAL 2023

Global Brand Divisions' loss before interest and taxes increased 14% for fiscal 2023 primarily due to a 12% increase in selling and administrative expense from higher operating overhead expense largely driven by higher wage-related costs and strategic technology enterprise investments.

Global Brand Divisions' loss before interest and taxes decreased 2% primarily due to lower operating overhead expense, partially offset by higher demand creation expense.

Lower operating overhead expense was primarily due to lower wage-related expenses, technology spend and other administrative costs.

The increase in demand creation expense was primarily due to higher advertising and marketing expense as well as digital marketing.

(Dollars in millions)

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FISCAL 2024 COMPARED TO FISCAL 2023

• Converse revenues increased 8% on a currency-neutral basis for fiscal 2023 due to revenue growth in North America, Western Europe and licensee markets, partially offset by declines in Asia.

Combined unit sales within the wholesale and direct to consumer channels increased 1% while ASP increased 6%, driven by strategic pricing actions in Western Europe and North America.

• Direct to consumer revenues increased 8% on a currency-neutral basis, led by strong digital sales growth in North America.

• Wholesale revenues increased 7% on a currency-neutral basis, as growth in North America and Western Europe was partially offset by declines in Asia due to marketplace dynamics in China.

Reported EBIT increased 1% due to higher revenues and the following:

• Gross margin expansion of approximately 50 basis points as higher full-price ASP, net of discounts, lower other costs, and growth in licensee revenues were partially offset by higher product costs, lower margins in direct to consumer in part reflecting increased promotional activity, and unfavorable changes in standard foreign currency exchange rates.

• Selling and administrative expense increased 7% due to higher operating overhead and demand creation expense.

Operating overhead expense increased primarily as a result of higher wage-related expenses.

Demand creation expense increased as a result of higher advertising and marketing costs, partially offset by lower retail brand presentation costs.

• Converse revenues decreased 15% on a currency-neutral basis primarily due to declines in North America and Western Europe.

Combined unit sales within the wholesale and direct to consumer channels decreased 12%, driven primarily by a decrease in wholesale, while ASP decreased 3%, primarily driven by increased promotional activity in direct to consumer.

• Wholesale revenues decreased 16% on a currency-neutral basis, driven by declines in all geographies.

• Direct to consumer revenues decreased 14% on a currency-neutral basis as declines in North America and Western Europe, driven by reduced traffic, were partially offset by growth in Asia.

Reported EBIT decreased 30% reflecting lower revenues and the following:

• Gross margin contraction of approximately 130 basis points due to unfavorable changes in standard foreign currency exchange rates, lower full-price ASP, net of discounts, higher other costs and lower margin in direct to consumer, partially offset by lower ocean freight rates.

• Selling and administrative expense decrease of 2% due to lower operating overhead expense, primarily as a result of lower wage-related expenses.

2024 FORM 10-K 43

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FISCAL 2024 COMPARED TO FISCAL 2023

Corporate's loss before interest and taxes increased $621 million during fiscal 2023, primarily due to the following:

• an unfavorable change of $371 million primarily related to higher wage and other professional services expenses, reported as a component of consolidated Operating overhead expense;

• an unfavorable change of $352 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;

• an unfavorable change of $45 million largely due to net unfavorable activity related to our strategic distributor partnership transition within APLA, including the loss recognized upon completion of the sale our entities in Argentina and Uruguay to a third-party distributor in the second quarter of fiscal 2023.

This was partially offset by the one-time charge related to the deconsolidation of our Russian operations recognized in the prior year, with the net amount of these activities reported as a component of consolidated Other (income) expense, net;

• a favorable change in net foreign currency gains and losses of $174 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.

Corporate's loss before interest and taxes decreased $221 million during fiscal 2024, primarily due to the following:

• a favorable change in net foreign currency gains and losses of $588 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 profit;

• a favorable change of $80 million primarily related to lower wage-related expenses, partially offset by higher professional services, reported as a component of consolidated Operating overhead expense;

• a favorable change of $27 million primarily related to the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, partially offset by 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, reported as a component of consolidated Other (income) expense, net;

• an unfavorable change of $443 million related to restructuring charges, $379 million reported as a component of consolidated Operating overhead expense and $64 million reported as a component of consolidated Cost of sales.

FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES

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NTC sales to a NIKE entity with a different functional currency results in a foreign currency exposure for the NTC.

Other NIKE entities purchase product directly from third-party factories in U.S.

Other NIKE entities purchase product directly from third-party factories predominantly in U.S.

These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S.

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Generally, these are accounted for as cash flow hedges.

2023 FORM 10-K 43

Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement are not formally designated as hedging instruments.

Accordingly, changes in fair value of these instruments are recognized in Other (income) expense, net and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged.

2024 FORM 10-K 45

TRANSLATIONAL EXPOSURES

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Dollar reduces our consolidated earnings.

The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $2,859 million, $295 million and a benefit of approximately $893 million for the years ended May 31, 2023, 2022 and 2021, respectively.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a detriment of approximately $824 million, $87 million and a benefit of approximately $260 million for the years ended May 31, 2023, 2022 and 2021, respectively.

The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $141 million for the year ended May 31, 2024.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $48 million for the year ended May 31, 2024.

MANAGING TRANSLATIONAL EXPOSURES

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Dollar denominated investments at non-U.S.

Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under generally accepted accounting principles in the United States of America ("U.S.

Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S.

We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S.

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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 an unfavorable impact of approximately $1,023 million and a favorable impact of approximately $132 million and $19 million on our Income before income taxes for the years ended May 31, 2023, 2022 and 2021, respectively.

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 an unfavorable impact of approximately $68 million on our Income before income taxes for the year ended May 31, 2024.

NET INVESTMENTS IN FOREIGN SUBSIDIARIES

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Net income, adjusted for non-cash items, generated $6,713 million of operating cash inflow for fiscal 2024, compared to $6,354 million for fiscal 2023.

The net change in working capital and other assets and liabilities resulted in a decrease to Cash provided (used) by operations of $513 million for fiscal 2023 compared to a decrease of $1,660 million for fiscal 2022.

For fiscal 2023, the net change in working capital compared to the prior year was impacted by unfavorable changes in Accounts payable, offset by favorable impacts from Inventories and Accounts receivable.

These changes were, in part, due to reduced inventory purchases in the current period and timing of wholesale shipments.

Further impacting these changes was a lower available supply of inventory in the prior year due to supply chain constraints.

Cash provided (used) by investing activities was an inflow of $564 million for fiscal 2023, compared to an outflow of $1,524 million for fiscal 2022, primarily driven by the net change in short-term investments.

For fiscal 2023, the net change in short-term

2023 FORM 10-K 44

investments (including sales, maturities and purchases) resulted in a cash inflow of $1,481 million compared to a cash outflow of $747 million for fiscal 2022.

Additionally, we continue to invest in our infrastructure to support future growth, specifically focused around digital capabilities, our end-to-end technology foundation, our corporate facilities and improvements across our supply chain.

The net change in working capital and other assets and liabilities resulted in an increase to Cash provided (used) by operations of $716 million for fiscal 2024 compared to a decrease of $513 million for fiscal 2023.

For fiscal 2024, the favorable net change in working capital compared to the prior year was primarily impacted by favorable changes to Inventories due to reduced inventory purchases and improved lead times, partially offset by unfavorable changes to Accounts receivable due to the timing of wholesale shipments.

Cash provided (used) by investing activities was an inflow of $894 million for fiscal 2024, compared to an inflow of $564 million for fiscal 2023, primarily driven by the net change in short-term investments (including sales, maturities and purchases).

For fiscal 2024, the net change in short-term investments resulted in a cash inflow of $1,721 million compared to a cash inflow of $1,481 million for fiscal 2023.

Cash provided (used) by financing activities was an outflow of $5,888 million for fiscal 2024 compared to an outflow of $7,447 million for fiscal 2023.

The increased outflow in fiscal 2023 was driven by higher share repurchases of $5,480 million for fiscal 2023 compared to $4,014 million for fiscal 2022, the repayment of $500 million of senior notes that matured in fiscal 2023, as well as lower proceeds from stock option exercises, which resulted in a cash inflow of $651 million in fiscal 2023 compared to $1,151 million in fiscal 2022.

In fiscal 2023, we purchased a total of 50.0 million shares of NIKE's Class B Common Stock for $5.5 billion (an average price of $110.32 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 million (an average price of $109.85 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 May 31, 2023, we had repurchased 43.5 million shares at a cost of approximately $4.8 billion (an average price of $110.38 per share) under this new program.

The decreased outflow in fiscal 2024 was driven by lower share repurchases of $4,250 million for fiscal 2024 compared to $5,480 million for fiscal 2023, partially offset by higher dividend payments of $2,169 million for fiscal 2024 compared to $2,012 million for fiscal 2023.

2024 FORM 10-K 46

In fiscal 2024, we purchased a total of 41.4 million shares of NIKE's Class B Common Stock for $4.3 billion (an average price of $102.72 per share) under the four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022.

As of May 31, 2024, we had repurchased 84.9 million shares at a cost of approximately $9.1 billion (an average price of $106.65 per share) under this program.

We continue to expect funding of share repurchases will come from operating cash flows.

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The facility matures on March 11, 2027, with options to extend the maturity date up to an additional two years.

This facility replaces the prior $2 billion five-year credit facility agreement entered into on August 16, 2019, which would have matured on August 16, 2024.

Refer to Note 5 — Short-Term Borrowings and Credit Lines for additional information.

On March 8, 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 the option to increase borrowings up to $1.5 billion in total with lender approval.

The facility matures on March 8, 2024, with an option to extend the maturity date by 364 days.

The facility matures on March 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 10, 2023, which matured on March 8, 2024.

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As of and for the fiscal years ended May 31, 2024 and 2023, we did not have any borrowings outstanding under our $3 billion program.

We may continue to issue commercial paper or other debt securities depending on general corporate needs.

We may issue commercial paper or other debt securities depending on general corporate needs.

To date, we have not experienced difficulty accessing the capital or credit markets;

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While individual securities have varying durations, as of May 31, 2024, the weighted-average days to maturity of our cash equivalents and short-term investments portfolio was 65 days.

2023 FORM 10-K 45

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.

Our material cash requirements as of May 31, 2024, were as follows:

• Debt Obligations — Refer to Note 5 — Short-Term Borrowings and Credit Lines and Note 6 — Long-Term Debt in the accompanying Notes to the Consolidated Financial Statements for further information.

• Operating Leases — Refer to Note 17 — Leases in the accompanying Notes to the Consolidated Financial Statements for further information.

• Debt Obligations — Refer to Note 5 — Short-Term Borrowings and Credit Lines and Note 6 — Long-Term Debt in the accompanying Notes to the Consolidated Financial Statements for additional information.

• Operating Leases — Refer to Note 17 — Leases in the accompanying Notes to the Consolidated Financial Statements for additional information.

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• Endorsement Contracts — As of May 31, 2024, we had endorsement contract obligations of $10.6 billion, with $1.7 billion payable within 12 months, representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.

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In addition to the above, we have long-term obligations for uncertain tax positions and various post-retirement benefits for which we are not able to reasonably estimate when cash payments will occur.

Refer to Note 7 — Income Taxes and Note 11 — Benefit Plans in the accompanying Notes to the Consolidated Financial Statements for further information related to uncertain tax positions and post-retirement benefits, respectively.

Refer to Note 7 — Income Taxes and Note 11 — Benefit Plans in the accompanying Notes to the Consolidated Financial Statements for additional information related to uncertain tax positions and post-retirement benefits, respectively.

As a part of the transition tax related to the Tax Cuts and Jobs Act, as of May 31, 2024, we had $483 million in estimated future cash payments, with $215 million payable within the next 12 months.

These amounts represent the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which are reflected net of foreign tax credits we utilized.

Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for further information related to our off-balance sheet arrangements, bank guarantees and letters of credit.

Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information related to our off-balance sheet arrangements, bank guarantees and letters of credit.

OFF-BALANCE SHEET ARRANGEMENTS

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Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards.

2023 FORM 10-K 46

CRITICAL ACCOUNTING ESTIMATES

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Management has reviewed and discussed these critical accounting estimates with the Audit & Finance Committee of the Board of Directors.

2024 FORM 10-K 48

Because of the uncertainty inherent in these matters, actual results could differ from the estimates we use in the preparation of our Consolidated Financial Statements.

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We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand and market conditions.

If we estimate the net realizable value of our inventory is less than the cost of the inventory recorded on our books, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value.

If we estimate the net realizable value of our inventory is less than the cost of the inventory, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value.

This reserve is recorded as a charge to Cost of sales.

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Refer to Note 12 — Risk Management and Derivatives in the accompanying Notes to the Consolidated Financial Statements for additional information.

2023 FORM 10-K 47

We are subject to taxation in the United States, as well as various state and foreign jurisdictions.

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On a quarterly basis, we evaluate the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity.

Changes in our assessment may result in the recognition of a tax benefit or an additional charge to the tax provision in the period our assessment changes.

Changes in our assessment may result in the recognition of a tax benefit or an

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additional charge to the tax provision in the period our assessment changes.

We recognize interest and penalties related to income tax matters in Income tax expense.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis