《Nike-Shareholder_Letter_2010》.pdfVIP

J U L Y 1 , 2 0 1 0 T O O U R S H A R E H O L D E R S , In the challenging economic environment of the last year we saw opportunity. We chose to rebuild the company to leverage our strengths and pursue our potential. We elevated our category offense, as that keeps us close to consumers. We created six new, strategic geographies to focus our efforts where the passion and culture of sport are strongest. We pushed forward with an aggressive retail agenda in-store and online, knowing that’s where people vote on our products. And we doubled our innovation agenda, because that’s what we do best. Today NIKE, Inc. is a stronger company than ever before. Our revenue at $19 billion is down 1 percent from last year – but we’ve never been more profitable. EPS and futures orders are up. Inventories are in great shape. Our affiliate brands, Cole Haan, Converse, Hurley, NIKE Golf and Umbro, contributed more than $2.5 billion in revenue, The LunarGlide+ shoe with Dynamic an increase of 5 percent over last year – that’s a record. Support reinvents stability and Revenue from direct to consumer – our NIKE-owned stores reaffirms NIKE’s leadership in running. and online business – increased 12 percent to nearly $2.5 billion – that’s a record. Gross margins came in at 46.3 percent for the year – that’s a record. And we generated $2.8 billion in free cash flow from operations and now have over $5 billion in cash and short-term investments on our balance sheet – yes, two more records. But wait, there’s more. What the full-year numbers don’t show is the tremendous acceleration we generated in the back half of fiscal 2010. In most key markets around the world our business strengthened while our major competito