Nike 2008 Annual Report Download - page 4

To Our Shareholders,
When I stepped into the CEO role 2½ years ago, the leadership team
reafrmed a simple concept that I knew was true from my nearly
30 years of experience here – NIKE is a growth company. That fact
shaped the long-term nancial goals we outlined more than seven
years ago. It also inspired our goal of reaching $23 billion in revenue
by the end of scal 2011. Fiscal 2008 illustrated the power of that
nancial model, the strength of our team, and the ability of NIKE to
bring innovative products and excitement to the marketplace.
Our unique role as the innovator and leader in our industry enables us
to drive consistent, long-term protable growth. In 2008 we added
$2.3 billion of incremental revenue to reach $18.6 billion – up 14 percent
year over year with growth in every region and every business unit.
Gross margins improved more than a percentage point to a record
high of 45%, and earnings per share grew 28 percent. We increased
our return on invested capital by 250 basis points1, increased dividends
by 23%, and bought back $1.2 billion in stock.
2008 was a very good year.
As we enter scal 2009 we are well-positioned for the future. The NIKE
brand continues to grow in relevance and inuence. We’re focused
on six key categories – running, basketball, football, men’s training,
women’s training and sportswear. Each category team is immersed
in its sport’s culture, connecting with consumers and building deep
relationships. These connections are the source of insights we use to
create the innovative products that ll our pipeline. NIKE is a premium
brand, and we earn that reputation by delivering experiences that
surpass the expectations of our consumers.
Our portfolio of brands also continues to grow. Converse is mid-way
through its 100th anniversary celebration. This brand delivered its
best year ever in scal 2008 and continues to grow in the U.S. and in
the key emerging markets of China, Russia and Brazil. Hurley and
Cole Haan also had record years for revenue and pre-tax income.
And NIKE Golf increased revenue and pre-tax income as we continue
to deliver innovation and widen our lead as the largest apparel brand
in the golf industry.
Growth in our portfolio of brands is only half the story. The other
half is change. Our portfolio is based on three things – pursuing
the greatest growth opportunities; leveraging NIKE resources and
capabilities; and serving consumers with premium products and
experiences. In applying these three principles we saw opportunities
to take action in 2008. We sold the Starter and Bauer businesses, and
we acquired Umbro, one of the world’s great football brands and a source
of tremendous growth potential for NIKE, Inc. as we continue to
expand our position as the biggest football presence on the planet.
I’m very pleased with
how we have enhanced
the position, performance,
and potential of all the
brands and categories in
the NIKE, Inc. family.