SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FOR QUARTERLY REPORTS UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter Ended August 31, 1997 Commission file number - 1-10635
NIKE, Inc.
(Exact name of registrant as specified in its charter)
OREGON 93-0584541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Bowerman Drive, Beaverton, Oregon 97005-6453
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (503) 671-6453
Indicate by check mark 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
Yes X No .
___ ___
Common Stock shares outstanding as of August 31, 1997 were:
_________________
Class A 101,497,153
Class B 188,935,323
____________
290,432,476
===========
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
NIKE, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
Aug. 31, May 31,
1997 1997
________ _______
(in thousands)
ASSETS
Current assets:
Cash and equivalents $ 403,087 $ 445,421
Accounts receivable 1,992,390 1,754,137
Inventories (Note 3) 1,293,593 1,338,640
Deferred income taxes 129,385 135,663
Prepaid expenses 184,312 157,058
__________ _________
Total current assets 4,002,767 3,830,919
Property, plant and equipment 1,513,450 1,425,747
Less accumulated depreciation 541,176 503,378
__________ __________
972,274 922,369
Identifiable intangible assets and goodwill 459,336 464,191
Deferred income taxes and other assets 191,035 143,728
__________ __________
$5,625,412 $5,361,207
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 2,816 $ 2,216
Notes payable 428,669 553,153
Accounts payable 534,694 687,121
Accrued liabilities 662,270 570,504
Income taxes payable 167,152 53,923
__________ __________
Total current liabilities 1,795,601 1,866,917
Long-term debt 393,174 296,020
Deferred income taxes and other liabilities 50,798 42,132
Commitments and contingencies (Note 4) -- --
Redeemable Preferred Stock 300 300
Shareholders' equity:
Common Stock at stated value (Note 2):
Class A convertible-101,497 and
101,711 shares outstanding 152 152
Class B-188,935 and 187,559 shares
outstanding 2,708 2,706
Capital in excess of stated value 224,894 210,650
Foreign currency translation
adjustment (39,953) (31,333)
Retained earnings 3,197,738 2,973,663
___________ __________
3,385,539 3,155,838
___________ __________
$5,625,412 $5,361,207
========== ==========
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
August 31,
__________________
1997 1996
____ ____
(in thousands, except per share data)
<S> <C> <C>
Revenues $2,766,099 $2,281,926
_________ _________
Costs and expenses:
Cost of sales 1,665,465 1,362,119
Selling and administrative 658,916 529,537
Interest 16,919 12,666
Other expense (income) 13,169 8,641
________ ________
2,354,469 1,912,963
________ ________
Income before income taxes 411,630 368,963
Income taxes 158,500 142,900
________ ________
Net income $ 253,130 $ 226,063
========= =========
Net income per common share(Note 2) $ .85 $ .76
========= =========
Dividends declared per common share $ .10 $ .08
========= =========
Average number of common and
common equivalent shares (Note 2) 297,494 296,368
========= =========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
August 31,
_________________
1997 1996
____ ____
(in thousands)
<S> <C> <C>
Cash provided (used) by operations:
Net income $253,130 $226,063
Income charges (credits) not
affecting cash:
Depreciation 43,792 27,012
Deferred income taxes and
purchased tax benefits 3,938 5,984
Other 4,517 13,306
Changes in other working capital
components (168,015) (250,952)
_______ _______
Cash provided by operations 137,362 21,413
_______ _______
Cash (used) provided by investing activities:
Additions to property, plant and
equipment (108,682) (74,260)
Disposals of property, plant and
equipment 3,934 7,525
Increase in other assets (40,158) (16,211)
Decrease in other liabilities (1,048) (9,651)
_______ _______
Cash used by investing activities (145,954) (92,597)
_________ ________
Cash provided (used) by financing activities:
Additions to long-term debt 101,885 98,808
Reductions in long-term debt
including current portion (429) (2,263)
(Decrease) increase in notes payable (124,484) 78,983
Proceeds from exercise of options 14,246 9,381
Dividends - common and preferred (28,932) (21,547)
_______ _______
Cash (used) provided by financing
activities (37,714) 163,362
_______ _______
Effect of exchange rate changes on cash 3,972 799
_______ _______
Effect of May 1996 cash flow activity for certain
subsidiaries (Note 5) -- 43,004
_______ _______
Net (decrease) increase in cash and equivalents (42,334) 135,981
Cash and equivalents, May 31, 1997 and 1996 445,421 262,117
_______ _______
Cash and equivalents, August 31, 1997
and 1996 $403,087 $398,098
======== ========
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements are
an integral part of this statement.
NIKE, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Summary of significant accounting policies:
___________________________________________
Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments (consisting of normal recurring accruals) which
are, in the opinion of management, necessary for a fair presentation of
the results of operations for the interim period(s). The interim financial
information and notes thereto should be read in conjunction with the
Company's latest annual report to shareholders. The results of operations
for the three (3) months ended August 31, 1997 are not necessarily
indicative of results to be expected for the entire year.
NOTE 2 - Net income per common share:
___________________________
Net income per common share is computed based on the weighted average
number of common and common equivalent (stock option) shares outstanding
for the period(s).
On October 23, 1996 the Company issued additional shares in connection
with a two-for-one stock split effected in the form of a 100% stock dividend
on outstanding Class A and Class B common stock. The per common share amounts
in the Consolidated Financial Statements and accompanying notes have been
adjusted to reflect this stock split.
NOTE 3 - Inventories:
___________
Inventories by major classification are as follows:
Aug. 31, May 31,
1997 1997
________ ________
(in thousands)
Finished goods $1,209,356 $1,248,401
Work-in-process 44,722 50,245
Raw materials 39,515 39,994
__________ __________
$1,293,593 $1,338,640
========== ==========
NOTE 4 - Commitments and contingencies:
_____________________________
There have been no other significant subsequent developments
relating to the commitments and contingencies reported on the
Company's most recent Form 10-K.
NOTE 5 - Change in year-end of certain subsidiaries:
__________________________________________
Prior to fiscal year 1997, certain of the Company's non-U.S.
operations reported their results of operations on a one month lag
which allowed more time to compile results. Beginning in the first
quarter of fiscal year 1997, the one month lag was eliminated. As a
result, the May 1996 charge from operations for these entities of
$4.1 million was recorded to retained earnings in the first quarter
of fiscal year 1997.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Operating Results
_________________
Net income for the three months ended August 31, 1997 increased 12% to a
record $253.1 million ($0.85 per share), compared to $226.1 ($0.76 per
share) for the same period last year. Total revenues increased to a
record $2.77 billion, an increase of 21% over the prior year's first
quarter of $2.28 billion. This represents 14 and 12 consecutive
comparable quarter increases in revenues and net income, respectively.
Gross margins for the quarter were 39.8% of revenues, compared to 40.3%
in the prior year. Selling and administrative costs were 23.8% of
revenues, compared to 23.2% in the prior year.
A key component to the revenue increase for the quarter was non-U.S.
footwear and apparel brand revenues, which topped $1 billion in a fiscal
quarter for the first time, representing an increase of 46% over the
prior year. Had the U.S. dollar remained constant with that of the
prior year, non-U.S. revenues would have increased 60%. Europe
increased 34% (51% on a constant dollar basis), Asia Pacific increased
68% (78% on a constant dollar basis), and the Americas (which includes
Canada and Latin America) increased 60% (61% on a constant dollar
basis).
U.S. brand footwear and apparel revenues increased $133.0 million, or
10%, over the prior year. Key U.S. apparel growth categories included
golf, running, outdoor and soccer, all of which experienced double digit
increases in the quarter. The U.S. footwear increase was a result of a
2% increase in pairs sold and a 3% increase in average selling price.
Basketball, cross training, running and kids comprise approximately 80%
of the total U.S. footwear business, and individually increased 2%, 3%,
11%, and 23%, respectively. Of the remaining U.S. categories, golf and
soccer experienced revenue increases of 68% and 130%, respectively,
while outdoor and court each experienced reductions of 19%. Other and
Other Brands, which includes NIKE brand equipment, Bauer Inc., Cole
Haan, Sports Specialties, Corp., and Tetra Plastics., decreased 3% to
$148.4 million.
Management expects revenue growth for the remainder of fiscal 1998 to be
affected by the strong demand for the NIKE brand on a global scale.
However, given the rate of revenue increases in recent years, which
resulted in significant market share gains, the overall rate of growth
will be lower than that experienced in prior years, most predominately
in the U.S.
The breakdown of revenues follows:
Three months ended August 31,
%
1997 1996 change
U.S. FOOTWEAR $1,056,032 $1,002,103 5%
U.S. APPAREL 425,241 346,201 23
__________ __________
TOTAL U.S. 1,481,273 1,348,304 10
NON-U.S. FOOTWEAR 769,621 548,538 40
NON-U.S. APPAREL 366,852 232,339 58
_______ _______
TOTAL NON-U.S. 1,136,473 780,877 46
_________ _______
OTHER & OTHER BRANDS 148,353 152,745 (3)
_______ _______
TOTAL REVENUES $2,766,099 $2,281,926 21
========== ==========
The reduction in gross margins as a percentage of revenues, compared
with the prior year's first quarter, is primarily attributable to
increased air freight costs, higher levels of research, design and
development costs, and product mix, including, increased sales of lower
priced products. Management expects the fiscal 1998 gross margin
percentage to be lower than the prior year, primarily due to higher
product costs, increased spending on infrastructure to support the
higher levels of operations, and increased sales of lower priced
products, including close-outs.
Selling and administrative expenses increased $129 million over the
previous year's first quarter. The majority of the increase in absolute
dollars is attributable to planned increased spending to support the
growth in the business, including infrastructure related costs and
endorsements contracts. Total advertising expenses decreased as a
result of the increased spending around the Olympics and the European
soccer championships last year. The Company continues to invest in
growth opportunities, most predominately outside the U.S., and expects
that selling and administrative expenses as a percentage of revenues
will be slightly higher than the prior year.
The increase in total interest expense for the quarter, compared to the
prior year, is due to higher borrowing levels to support the growth in
the business, most predominately outside the U.S.
Worldwide futures and advance orders for NIKE Brand athletic footwear
and apparel scheduled for delivery from September 1997 through January 1998
were approximately $3.9 billion, 10% higher than such orders booked in the
comparable period of the prior year. These orders and the percentage growth
in these orders are not necessarily indicative of the growth in revenues which
the Company will experience for subsequent periods. This is due to the
significant shift in the mix of advance futures orders and orders at once
toward advance futures orders as the NIKE brand and futures programs become
more established in all areas, specifically in the non-U.S. regions. The mix
of orders will continue to vary as the non-U.S. operations continue to account
for a greater percentage of total revenues and place a greater emphasis on
futures programs. Finally, exchange rates can cause differences in the
comparisons.
The Company is heavily dependent upon complex computer systems for
all phases of its operations, including production, sales, distribution
and delivery. Since many of the Company's older computer software
programs recognize only the last two digits of the year in any date
(e.g., "97" for "1997"), some software may fail to operate properly in
1999 or 2000 if the software is not reprogrammed or replaced (the "Year
2000 Problem". The Company believes that many of its suppliers and
customers also have Year 2000 Problems which could affect the Company.
The Company has commenced a program intended to timely mitigate and/or
prevent the adverse effects of the Year 2000 Problem, and to pursue
compliance by suppliers. It is not possible, at present, to quantify
the overall cost of this work, nor the financial effect of the Year 2000
Problem if it is not timely resolved. However, the Company presently
believes that the cost of fixing the Year 2000 Problem will not have a
material effect on the Company's current financial position, liquidity
or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remains strong at August 31, 1997.
Compared to May 31, 1997, total assets grew $264 million to approximately
$5.6 billion and shareholder's equity increased $230 million to $3.4 billion.
Working capital increased $243 million, to $2.2 billion, and the Company's
current ratio increased to 2.2 at August 31, 1997 from 2.1 at 1997 fiscal
year-end.
Cash provided by operations was $137 million for the three months ended
August 31, 1997, an increase of $116 million over last year's first quarter,
primarily due to decreased working capital requirements as a result of lower
first quarter growth rates in the U.S. compared to the first quarter of
fiscal 1997.
Additions to property, plant and equipment for the first three months of
fiscal 1998 were $109 million. Additions in the U.S. totaled $48 million
for the quarter due to continued overall expansion of U.S. operations which
includes warehouse locations, world headquarters expansion, management
information systems and the continued development of NIKETOWN retail
locations. Outside the U.S., additions totaled $57 million and is largely
attributable to the development and expansion of new and existing warehouse
facilities. In addition to the increases in property, plant and equipment,
other assets increased from May 31, 1997 due primarily to advance payments
made in the first quarter for long-term endorsement contracts.
Additions to long-term debt totaled $102 million in the first quarter of
fiscal 1998. In fiscal 1997 the Company filed a shelf registration with the
Securities and Exchange Commission for the sale of up to $500 million of debt
securities. Under this program, the Company issued $100 million medium term
notes on June 16, 1997, maturing in three to five years. The proceeds were
swapped into Dutch Guilders and, during the first quarter, the Company used
this long-term fixed rate debt financing, in addition to excess cash, to pay
down the Company's European short-term debt. This resulted in a net reduction
of $124 million in notes payable in the first quarter of fiscal 1998.
Management believes that significant funds generated by operations, together
with access to sufficient sources of funds, will adequately meet its
anticipated operating, global infrastructure expansion and capital needs.
Significant short and long-term lines of credit are maintained with banks
which, along with cash on hand, provide adequate operating liquidity.
Liquidity is also provided by the Company's commercial paper program under
which there was $0 outstanding at August 31, 1997.
Dividends per share of common stock for the first quarter of fiscal 1998 was
$.10 per share compared to $.075 per share for the first quarter of fiscal
1997.
Special Note Regarding Forward-Looking Statements
and Reports Analyst Reports
Certain written and oral statements made or incorporated by
reference from time to time by NIKE or its representatives in this
report, other reports, filings with the Securities and Exchange
Commission, press releases, conferences, or otherwise, are "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 ("the 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 be," "will continue," "will likely 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 S.E.C.,
including Forms 8-K, 10-Q, and 10-K, and include, among others, the
following: international, national and local general economic and
market conditions; the size and growth of the overall athletic footwear,
apparel, and equipment markets; intense competition among designers,
marketers, distributors and sellers of athletic footwear, apparel, and
equipment for consumers and endorsers; demographic changes; changes in
consumer preferences; popularity of particular designs, categories of
products, and sports; seasonal and geographic demand for NIKE products;
the size, timing and mix of purchases of NIKE's products; fluctuations
and difficulty in forecasting operating results, including, without
limitation, the fact that advance "futures" orders may not be indicative
of future revenues due to the changing mix of futures and at-once
orders; the ability of NIKE to sustain, manage or forecast its growth;
new product development and introduction; the ability to secure and
protect trademarks, patents, and other intellectual property;
performance and reliability of products; customer service; adverse
publicity; the loss of significant customers or suppliers; dependence on
distributors; business disruptions; increased costs of freight and
transportation to meet delivery deadlines; changes in business strategy
or development plans; general risks associated with doing business
outside the United States, including, without limitation, import duties,
tariffs, quotas and political instability; changes in government
regulations; liability and other claims asserted against NIKE; the
ability to attract and retain qualified personnel; and other factors
referenced or incorporated by reference in this report and other
reports.
The risks included here are not exhaustive. Other sections of this
report may include additional factors which could adversely impact
NIKE's business and financial performance. Moreover, NIKE operates in a
very competitive and rapidly changing environment. New risk factors
emerge from time to time and it is not possible for management to
predict all such risk factors, nor can it assess the impact of all such
risk factors on NIKE's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Given these
risks and uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.
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 issuing or confirming financial
forecasts or projections issued by others. Accordingly, to the extent
that reports issued by securities analysts contain any projections,
forecasts or opinions, such reports are not the responsibility of NIKE.
Part II - Other Information
.
Item 1. Legal Proceedings:
There have been no material changes from the information previously
reported under Item 3 of the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1997.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of shareholders was held on September 22,
1997. The shareholders elected for the ensuing year all of management's
nominees for the Board of Directors, approved the amendments to the NIKE, Inc.
1990 Stock Incentive Plan, approved the NIKE, Inc. Long Term Incentive Plan,
and ratified the appointment of Price Waterhouse LLP as independent
accountants for fiscal 1998.
The voting results are as follows:
Election of Directors
Votes Cast
For Withheld Broker Non-Votes
Directors
Elected by holders of
Class A Common Stock:
Ralph D. DeNunzio 99,235,822 -0- -0-
Richard K. Donahue 99,235,822 -0- -0-
Douglas G. Houser 99,235,822 -0- -0-
John E. Jaqua 99,235,822 -0- -0-
Philip H. Knight 99,235,822 -0- -0-
Kenichi Ohmae 99,235,822 -0- -0-
Charles W. Robinson 99,235,822 -0- -0-
A. Michael Spence 99,235,822 -0- -0-
John R. Thompson, Jr. 99,235,822 -0- -0-
Elected by holders of
Class B Common Stock:
William J. Bowerman 153,522,383 6,117,232 -0-
Thomas E. Clarke 157,497,448 2,142,167 -0-
Jill K. Conway 157,626,890 2,012,725 -0-
Delbert J. Hayes 157,455,787 2,147,048 -0-
Broker
For Against Abstain Non-Votes
Proposal 2 -
Approve amendments to
the NIKE, Inc. 1990
Stock Incentive Plan:
Class A and Class B
Common Stock Voting
Together 169,868,204 41,864,615 917,246 46,225,372
Proposal 3 -
Approve the NIKE, Inc.
Long-Term Incentive
Compensation Plan:
Class A and Class B
Common Stock Voting
Together 201,330,079 10,407,146 915,640 46,222,572
Proposal 4 -
Ratify the appointment
of Price Waterhouse as
independent accountants:
Class A and Class B
Common Stock Voting
Together 258,171,454 234,145 469,838 -0-
Item 6. Exhibits and Reports on Form 8-K:
(a) EXHIBITS:
3.1 Restated Articles of Incorporation, as amended (incorporated by
reference from Exhibit 3.1 to the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 31, 1995).
3.2 Third Restated Bylaws, as amended (incorporated by reference
from Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended August 31, 1995).
4.1 Restated Articles of Incorporation, as amended (see Exhibit 3.1).
4.2 Third Restated Bylaws, as amended (see Exhibit 3.2).
4.3 Form of Indenture between the Company and The First National Bank
of Chicago, as Trustee (incorporated by reference from Exhibit
4.01 to Amendment No. 1 to Registration Statement No. 333-15953
filed by the Company on November 26, 1996.
4.4 Officers' Certificate establishing the terms of the Company's
6-3/8% Notes Due December 1, 2003 (incorporated by reference
from Exhibit 4.1 to the Company's Current Report on Form 8-K
dated December 10, 1996).
4.5 Form of 6-3/8% Note due December 1, 2003 (incorporated by
reference from Exhibit 4.2 to the Company's Current Report on
Form 8-K dated December 10, 1996).
4.6 Form of Officers' Certificate establishing the terms of
the Company's Fixed Rate Medium-Term Note and Floating Rate
Medium-Term Note (incorporated by reference from Exhibit 4.1
to the Company's Current Report on Form 8-K dated April 23, 1997).
4.7 Form of Fixed Rate Medium-Term Note (incorporated by reference
from Exhibit 4.2 to the Company's Current Report on Form 8-K
dated April 23, 1997).
4.8 Form of Floating Rate Medium-Term Note (incorporated by reference
from Exhibit 4.3 to the Company's Current Report on Form 8-K
dated April 23, 1997).
10.1 Credit Agreement dated as of September 15, 1995 among NIKE, Inc.,
Bank of America National Trust & Savings Association,
individually and as Agent, and the other banks party thereto
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended August 31, 1995).
10.2 Form of non-employee director Stock Option Agreement (incorporated
by reference from Exhibit 10.3 to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1993).*
10.3 Form of Indemnity Agreement entered into between the Company and
each of its officers and directors (incorporated by reference from
the Company's definitive proxy statement filed in connection with
its annual meeting of shareholders held on September 21, 1987).
10.4 NIKE, Inc. Restated Employee Incentive Compensation Plan
(incorporated by reference from Registration Statement No. 33-29262
on Form S-8 filed by the Company on June 16, 1989).*
10.5 NIKE, Inc. 1990 Stock Incentive Plan (incorporated by reference
from the Company's definitive proxy statement filed in connection
with its annual meeting of shareholders held on September 22, 1997).*
10.6 NIKE, Inc. Long-Term Incentive Plan (incorporated by reference
from the Company's definitive proxy statement filed in connection
with its annual meeting of shareholders held on September 22, 1997).*
10.7 Collateral Assignment Split-Dollar Agreement between NIKE, Inc.
and Philip H. Knight dated March 10, 1994 (incorporated by
reference from Exhibit 10.7 to the Company's Annual Report on
Form 10-K for he fiscal year ended May 31, 1994).*
10.8 NIKE, Inc. Executive Performance Sharing Plan (incorporated
by reference from the Company's definitive proxy statement filed
in connection with its annual meeting of shareholders held on
September 18, 1995).*
12.1 Computation of Ratio of Earnings to Charges.
27 Financial Data Schedule.
* Management contract or compensatory plan or arrangement.
(b) The following report on Form 8-K was filed by the Company during
the first quarter of fiscal 1997:
June 10, 1997; Item 5. Other Events; Press release issued May 29, 1997,
regarding earnings.
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/Robert S. Falcone
________________________
Robert S. Falcone
Vice President,
Chief Financial Officer
DATED: October 15, 1997
NIKE, INC.
COMPUTATION OF RATIO OF EARNINGS TO CHARGES
Three Months Ended
August 31,
__________________
1997 1996
____ ____
(in thousands)
Net income $ 253,130 $ 226,063
Income taxes 158,500 142,900
__________ __________
Income before income taxes 411,630 368,963
__________ __________
Add fixed charges
Interest expense (A) 17,258 12,666
Interest component of leases (B) 10,082 5,260
__________ __________
Total fixed charges 27,340 17,926
__________ __________
Earnings before income taxes and
fixed charges (C) $ 438,631 $ 386,889
========== ==========
Ratio of earnings to total fixed
charges 16.04 21.58
===== =====
(A) Interest expense includes both expensed and capitalized.
(B) Interest component of leases includes one-third of rental expense,
which approximates the interest component of operating leases.
(C) Earnings before income taxes and fixed charges is exclusive of
capitalized interest.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE AUGUST 31, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> AUG-31-1997
<CASH> 403,087
<SECURITIES> 0
<RECEIVABLES> 1,992,390
<ALLOWANCES> 60,618
<INVENTORY> 1,293,593
<CURRENT-ASSETS> 4,002,767
<PP&E> 1,513,450
<DEPRECIATION> 541,176
<TOTAL-ASSETS> 5,625,412
<CURRENT-LIABILITIES> 1,795,601
<BONDS> 393,174
<COMMON> 2,860
0
300
<OTHER-SE> 3,382,679
<TOTAL-LIABILITY-AND-EQUITY> 5,625,412
<SALES> 2,766,099
<TOTAL-REVENUES> 2,766,099
<CGS> 1,665,465
<TOTAL-COSTS> 1,665,465
<OTHER-EXPENSES> 664,366
<LOSS-PROVISION> 7,719
<INTEREST-EXPENSE> 16,919
<INCOME-PRETAX> 411,630
<INCOME-TAX> 158,500
<INCOME-CONTINUING> 253,130
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 253,130
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
