About NIKE Inc

NIKE, Inc. (NIKE) engages in the design, development, and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories and services. NIKE is the largest seller of athletic footwear and apparel in the world. The company sells its products through NIKE Direct operations, which are consisted of both NIKE-owned retail stores and sales through the company’s digital platforms (also referred to as ‘NIKE Brand Digital’), to retail accounts and to a mix of independent distributors, licensees and sales representatives in nearly all countries around the world. The company also offers interactive consumer services and experiences through the company’s digital platforms. Nearly all of the company’s products are manufactured by independent contractors. Nearly all footwear and apparel products are manufactured outside the United States, while equipment products are manufactured both in the United States and abroad. Products The company’s NIKE Brand product offerings are aligned around its consumer construct focused on Men's, Women's and Kids'. The company also designs products specifically for the Jordan Brand and Converse. NIKE's athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. The company’s Men's, Women's and Jordan Brand footwear products lead in footwear sales and the company expects them to continue to do so. The company also sells sports apparel, which features the same trademarks and are sold predominantly through the same marketing and distribution channels as athletic footwear. The company’s sports apparel, similar to the company’s athletic footwear products, is designed primarily for athletic use, although many of the products are worn for casual or leisure purposes, and demonstrates the company’s commitment to innovation and high-quality construction. The company’s Men's and Women's apparel products lead in apparel sales and the company expects them to continue to do so. The company often markets footwear, apparel and accessories in ‘collections’ of similar use or by category. The company also markets apparel with licensed college and professional team and league logos. The company sells a line of performance equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. The company also sells small amounts of various plastic products to other manufacturers through the company’s wholly-owned subsidiary, NIKE IHM, Inc., doing business as Air Manufacturing Innovation. The company’s Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. Sales and operating results for Jordan Brand products are reported within the respective NIKE Brand geographic operating segments. The company’s wholly-owned subsidiary brand, Converse, headquartered in Boston, Massachusetts, designs, distributes and licenses casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks. Operating results of the Converse brand are reported on a stand-alone basis. In addition to the products the company sells to its wholesale customers and directly to consumers through the company’s NIKE Direct operations, the company has also entered into license agreements that permit unaffiliated parties to manufacture and sell, using NIKE-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities. The company also offers interactive consumer services and experiences, as well as digital products through the company’s digital platforms, including fitness and activity apps; sport, fitness and wellness content; and digital services and features in retail stores that enhance the consumer experience. Sales and Marketing The company experiences moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third fiscal quarters (year ended May 2023). Because NIKE is a consumer products company, the relative popularity and availability of various sports and fitness activities, as well as changing design trends, affect the demand for the company’s products. The company must, therefore, respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories and influencing sports and fitness preferences through extensive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on the company’s sales and profitability. This is a continuing risk. Markets The company reports its NIKE Brand operations based on the company’s internal geographic organization. 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 the Asia Pacific & Latin America (‘APLA’), and include results for the NIKE and Jordan brands. Sales through the company’s NIKE Direct operations are managed within each geographic operating segment. Converse is also a reportable operating segment and operates predominately in one industry: the design, marketing, licensing and selling of casual sneakers, apparel and accessories. Converse direct to consumer operations, including digital commerce, are reported within the Converse operating segment results. The United States Market The company sells its products to thousands of retail accounts in the United States, including a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops and other retail accounts. In the United States, the company utilizes NIKE sales offices to solicit such sales. During fiscal 2023, the company’s three largest United States customers accounted for approximately 22% of sales in the United States. The company’s NIKE Direct and Converse direct to consumer operations sell the company’s products to consumers through various digital platforms. In addition, the company’s NIKE Direct and Converse direct to consumer operations sell products through various retail stores in the United States. In the United States, NIKE has eight significant distribution centers. International Markets The company sells its products to retail accounts through the company’s own NIKE Direct operations and through a mix of independent distributors, licensees and sales representatives around the world. The company sells to thousands of retail accounts and ships products from 67 distribution centers outside of the United States. During fiscal 2023, NIKE's three largest customers outside of the United States accounted for approximately 14% of total non-U.S. sales. In addition to NIKE-owned and Converse-owned digital commerce platforms in over 40 countries, the company’s NIKE Direct and Converse direct to consumer businesses operate various retail stores outside the United States. Manufacturing Nearly all of the company’s footwear and apparel products are manufactured outside the United States by independent manufacturers (‘contract manufacturers’), many of which operate multiple factories. The company is also supplied, primarily indirectly, by a number of materials, or ‘Tier 2’ suppliers, who provide the principal materials used in footwear and apparel finished goods products. As of May 31, 2023, the company had 146 strategic Tier 2 suppliers. As of May 31, 2023, the company’s contract manufacturers operated 123 finished goods footwear factories located in 11 countries. For fiscal 2023, NIKE Brand footwear finished goods were manufactured by 15 contract manufacturers, many of which operate multiple factories. As of May 31, 2023, the company’s contract manufacturers operated 291 finished goods apparel factories located in 31 countries. For fiscal 2023, NIKE Brand apparel finished goods were manufactured by 55 contract manufacturers, many of which operate multiple factories. The principal materials used in the company’s footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, natural and synthetic leather, nylon, polyester and natural fiber textiles, as well as polyurethane films used to make NIKE Air-Sole cushioning components. During fiscal 2023, Air Manufacturing Innovation, a wholly-owned subsidiary, with facilities near Beaverton, Oregon, in Dong Nai Province, Vietnam, and St. Charles, Missouri, as well as contract manufacturers in China and Vietnam, were the company’s suppliers of NIKE Air-Sole cushioning components used in footwear. In fiscal 2023, the company experienced ongoing supply chain volatility during the first part of the year, which improved gradually during the course of the year. The company also experienced higher supply chain network costs primarily due to inflationary pressures during the year. International Operations and Trade The company’s international operations are subject to compliance with the U.S. Foreign Corrupt Practices Act (the ‘FCPA’), and other anti-bribery laws applicable to the company’s operations. The company sources a significant portion of its products from, and have important consumer markets, outside of the United States. The company has an ethics and compliance program to address compliance with the FCPA and similar laws by the company, its employees, agents, suppliers and other partners. Competition The company competes internationally with a significant number of athletic and leisure footwear companies, athletic and leisure apparel companies, sports equipment companies and large companies having diversified lines of athletic and leisure footwear, apparel and equipment, including adidas, Anta, ASICS, Li Ning, lululemon athletica, New Balance, Puma, Under Armour and V.F. Corporation, among others. Trademarks and Patents The company considers its NIKE and Swoosh Design trademarks to be among the company’s most valuable assets and the company has registered these trademarks in over 190 jurisdictions worldwide. History NIKE, Inc. was founded in 1964. The company was incorporated in 1967 under the laws of the state of Oregon.