2013



CEO Letter to Shareholders



To Our Shareholders,



Seven years ago in my first letter as CEO I wrote, "We are committed to being nimble and strong and focused in everything we do. This is critical for any company operating in a global marketplace that is in a state of constant change."

Those timeless NIKE commitments have proven more valuable than anyone could’ve known at that moment.

Sports and athletes. Innovation. Technology. Performance. Strategy. Sustainability. Speed. Culture. Investment. Passion. Community. These are the elements of our success and our potential. And none of them are static. How well we balance these elements – embrace, develop and leverage them – that is the art of growth. And we grow more skilled in that art every year.

PROFITABLE GROWTH OVER THE LONG TERM

In the last 10 years we more than doubled our revenue, grew diluted EPS at a compounded rate of 15 percent, and returned over $15 billion to shareholders through dividend payments and share repurchases. I know what you’re thinking, "That’s great, but what have you done for me lately?" It’s a fair question.

In fiscal year 2013, continuing operations revenues for NIKE, Inc. grew 8 percent to $25.3 billion. It took us 18 years to get to our first $2 billion in revenue. We added about that much in just the last 12 months. Gross margin increased 10 basis points compared to last year in what remains a challenging cost environment. And diluted earnings per share grew 11 percent to $2.69. These are strong results in an important year for NIKE as we work to increase our growth potential in every brand, product platform, category and geography.

In North America, our biggest geography, the NIKE Brand surpassed $10 billion as we added $1.5 billion of new revenue in this geography alone. That growth was broad based – across all product types, in our wholesale and Direct-To-Consumer (DTC) business, and across nearly all our key NIKE Brand categories. And it was extremely profitable growth. EBIT for the geography grew 25 percent to $2.5 billion. For 30 years I’ve been hearing people say, "North America is tapped out." I’m glad we didn’t listen.

ONE MILLION PAIRS OF SHOES IS JUST THE BEGINNING

Actually we sell more pairs of shoes than that every day. We’re also one of the world’s largest producers of apparel. Our supply chain, our balance sheet, our people and our relentless flow of innovation continue to set us apart and position us for success. These competitive advantages have been central to our growth so far. But we’re more interested in where they can take us.

We believe we can transform the marketplace. That means creating a more productive, innovative retail environment – one with more capacity and consistency in presenting NIKE, Inc. brands, categories and products. We did that in FY 2013 with our wholesale partners and in our DTC business. We opened a new NIKE Brand Experience store in Ipanema, Brazil, our first in that market. The new Running store in Manhattan’s Flatiron building has become a hot spot for the Manhattan running community. And more than 250,000 people visited our NIKE stores in London over the course of the Olympics.

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