1 Investor Contact: Media Contact: Matt Friend Mark Rhodes (503) 532-4213 (503) 532-8877 NIKE, INC. REPORTS FISCAL 2020 SECOND QUARTER RESULTS BEAVERTON, Ore., Dec. 19, 2019 NIKE, Inc. (NYSE:NKE) today reported fiscal 2020 financial results for its second quarter ended November 30, 2019. Revenue increased to $10.3 billion in the second quarter, up 10 percent on a reported basis and up 13 percent on a currency-neutral basis*, driven by strong growth across all geographies. “In Q2, NIKE has proven again that innovation is our greatest competitive edge turning athlete insights into breakthrough product and digital services, as we offer more choice to more consumers at an accelerated pace,” said Mark Parker, Chairman, President and CEO, NIKE, Inc. “Our entire NIKE team is fueling our current momentum, and Ive never been more optimistic about the future of this company.”* Diluted earnings per share for the quarter was $0.70, an increase of 35 percent driven primarily by strong revenue growth, gross margin expansion, selling and administrative expense leverage, a lower tax rate and a lower average share count. “NIKE delivered another strong quarter of accelerating, high-quality growth, driven by strategic and targeted investment in our digital transformation,” said Andy Campion, Executive Vice President and Chief Financial Officer, NIKE, Inc. “As we deliver a relentless flow of innovation and scale NIKEs digital advantage, we are positioned for even greater competitive separation and long-term shareholder value creation.”* Second Quarter Income Statement Review Revenues for NIKE, Inc. increased 10 percent to $10.3 billion, up 13 percent on a currency- neutral basis. Revenues for the NIKE Brand were $9.8 billion, up 12 percent on a currency-neutral basis driven by growth across wholesale and NIKE Direct; key categories including Sportswear, the Jordan Brand and Running, and continued growth across footwear and apparel. Revenues for Converse were $480 million, up 15 percent on a currency-neutral basis, mainly driven by double-digit growth in Asia and Europe, as well as through digital globally. Gross margin increased 20 basis points to 44.0 percent primarily due to higher average selling prices and margin expansion in NIKE Direct and Converse, partially offset by impacts from higher product costs, primarily due to incremental tariffs in North America. Selling and administrative expense increased 6 percent to $3.3 billion. Demand creation expense was $881 million, down 3 percent due primarily to a timing shift of investment in certain brand campaigns. Operating overhead expense increased 9 percent to $2.4 billion driven by continued investments in transformational capabilities, particularly in NIKE Direct and global operations. 2 The effective tax rate was 10.7 percent, compared to 15 percent for the same period last year, primarily due to a more favorable impact from stock-based compensation. Net income increased 32 percent to $1.1 billion driven primarily by strong revenue growth, gross margin expansion, selling and administrative expense leverage and a lower tax rate, while diluted earnings per share increased 35 percent to $0.70 reflecting a nearly 2 percent decline in the weighted average diluted common shares outstanding. November 30, 2019 Balance Sheet Review Inventories for NIKE, Inc. were $6.2 billion, up 15 percent compared to the prior year period, reflecting strong consumer demand globally as well as a higher rate of on-time factory deliveries, and to a lesser extent, the impact from changes in foreign currency exchange rates. Cash and equivalents and short-term investments were $3.5 billion, $539 million lower than last year as share repurchases, dividends, and investments in infrastructure more than offset proceeds from net income. Share Repurchases During the second quarter, NIKE, Inc. repurchased 10.1 million shares for approximately $922 million as part of the four-year, $15 billion program approved by the Board of Directors in June 2018. As of November 30, 2019, a total of 33.6 million shares had been repurchased under this program for approximately $2.9 billion. Conference Call NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on December 19, 2019, to review fiscal second quarter results. The conference call will be broadcast live via the Internet and can be accessed at investors.nike. For those unable to listen to the live broadcast, an archived version will be available at the same location through 9:00 p.m. PT, January 9, 2020. About NIKE, Inc. NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories. For more information, NIKE, Inc.s earnings releases and other financial information are available on the Internet at investors.nike. Individuals can also visit news.nike and follow NIKE. * See additional information in the accompanying Divisional Revenues table regarding this non-GAAP financial measure. * The marked paragraph contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by NIKE with the U.S. Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K. (Tables Follow) NIKE, Inc. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE MONTHS ENDED % SIX MONTHS ENDED % (In millions, except per share data) 11/30/2019 11/30/2018 Change 11/30/2019 11/30/2018 Change Revenues $ 10,326 $ 9,374 10% $ 20,986 $ 19,322 9% Cost of sales 5,782 5,269 10% 11,571 10,820 7% Gross profit 4,544 4,105 11% 9,415 8,502 11% Gross margin 44.0% 43.8% 44.9% 44.0% Demand creation expense 881 910 -3% 1,899 1,874 1% Operating overhead expense 2,443 2,232 9% 4,753 4,331 10% Total selling and administrative expense 3,324 3,142 6% 6,652 6,205 7% % of revenues 32.2% 33.5% 31.7% 32.1% Interest expense (income), net 12 14 27 25 Other (income) expense, net (41) (48) (74) 5 Income before income taxes 1,249 997 25% 2,810 2,267 24% Income tax expense 134 150 -11% 328 328 0% Effective tax rate 10.7% 15.0% 11.7% 14.5% NET INCOME $ 1,115 $ 847 32% $ 2,482 $ 1,939 28% Earnings per common share: Basic $ 0.71 $ 0.54 31% $ 1.59 $ 1.22 30% Diluted $ 0.70 $ 0.52 35% $ 1.56 $ 1.19 31% Weighted average common shares outstanding: Basic 1,560.6 1,581.4 1,561.5 1,587.7 Diluted 1,594.4 1,620.7 1,596.0 1,627.2 Dividends declared per common share $ 0.245 $ 0.22 $ 0.465 $ 0.42NIKE, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) November 30, November 30, % Change (Dollars in millions) 2019 2018 ASSETS Current assets: Cash and equivalents $ 3,070 $ 3,423 -10% Short-term investments 432 618 -30% Accounts receivable, net 4,792 4,346 10% Inventories 6,199 5,388 15% Prepaid expenses and other current assets 1,876 1,791 5% Total current assets 16,369 15,566 5% Property, plant and equipment, net 4,668 4,588 2% Operating lease right-of-use assets, net 2,882 Identifiable intangible assets, net 277 284 -2% Goodwill 224 154 45% Deferred income taxes and other assets 2,182 2,085 5% TOTAL ASSETS $ 26,602 $ 22,677 17% LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Current portion of long-term debt $ 6 $ 6 0% Notes payable 300 9 Accounts payable 2,627 2,574 2% Current portion of operating lease liabilities 431 Accrued liabilities 4,672 4,478 4% Income taxes payable 228 211 8% Total current liabilities 8,264 7,278 14% Long-term debt 3,462 3,466 0% Operating lease liabilities 2,723 Deferred income taxes and other liabilities 2,802 3,204 -13% Redeemable preferred stock Shareholders equity 9,351 8,729 7% TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 26,602 $ 22,677 17%NIKE, Inc. DIVISIONAL REVENUES (Unaudited) % Change Excluding Currency Changes 1 % Change Excluding Currency Changes 1 THREE MONTHS ENDED % SIX MONTHS ENDED % (Dollars in millions) 11/30/2019 11/30/2018 Change 11/30/2019 11/30/2018 Change North America Footwear $ 2,426 $ 2,245 8% 8% $ 5,095 $ 4,800 6% 6% Apparel 1,417 1,405 1% 1% 2,848 2,812 1% 1% Equipment 139 132 5% 6% 332 315 5% 5% Total 3,982 3,782 5% 5% 8,275 7,927 4% 4% Europe, Middle East depreciation and amortization related to the Companys corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.