Nike Inc. (NYSE:NKE)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes displayed a significant decline in the year ending May 31, 2020, dropping from 4,182 million USD in 2019 to 2,477 million USD. Following this decrease, there was a robust recovery in 2021 with NOPAT rising sharply to 5,490 million USD, surpassing the 2019 figure. In the subsequent years, NOPAT showed relative stability with a slight decrease to 5,013 million USD in 2023 and a minor increase again to 5,146 million USD in 2024. Overall, the data reveals a V-shaped recovery pattern with a substantial rebound after the 2020 dip.

Invested Capital

Invested capital demonstrated a consistent upward trend over the entire period. Beginning at 14,182 million USD in 2019, invested capital rose sharply to 19,083 million USD in 2020 and continued to increase each year, reaching 22,129 million USD by 2024. This steady growth in invested capital suggests increased resource allocation or expansion activities.

Return on Invested Capital (ROIC)

The return on invested capital showed a significant drop from 29.49% in 2019 to 12.98% in 2020, paralleling the decline in NOPAT during the same period. This indicates a marked decrease in efficiency or profitability relative to the capital invested. After 2020, ROIC improved substantially, reaching 26.11% in 2021 and maintaining a relatively stable performance above 23% through 2024, although it did not return to the peak level of 2019. This trend indicates recovery of capital efficiency but at a slightly reduced level compared to the pre-2020 period.

Summary of Trends and Insights

The data depicts a pronounced impact on profitability and capital efficiency in 2020, likely due to external shocks or adverse conditions. Despite this, the company demonstrated a strong recovery in profitability and ROIC in 2021, accompanied by continuous growth in invested capital. The steadiness in NOPAT and ROIC after 2021 implies stabilization in operating performance and capital utilization efficiency. The increasing invested capital coupled with the sustained ROIC suggests ongoing investments are yielding relatively consistent returns, albeit slightly below the pre-2020 peak efficiency.

Operating Profit Margin (OPM)

The operating profit margin exhibited considerable fluctuation throughout the observed period. It started at 12.66% in 2019, decreased sharply to 8.66% in 2020, then rebounded to a peak of 15.45% in 2021. Subsequently, the margin slightly declined to 14.71% in 2022 and continued a downward trend to 12.25% in 2023 before experiencing a minor recovery to 12.9% in 2024. Overall, the margin demonstrates volatility with a significant dip in 2020 followed by partial recovery and stabilization around 12-13% in the most recent years.

Turnover of Capital (TO)

Turnover of capital showed a noticeable decline from 2.76 in 2019 to 1.96 in 2020, reflecting reduced efficiency in capital utilization during this period. Thereafter, it increased consistently over the next three years to reach 2.51 in 2023, indicating improving capital turnover. However, in 2024, it slightly decreased to 2.32, suggesting a minor regression in capital deployment efficiency. The overall trend points to recovery after the low point in 2020, with recent values still below the initial 2019 level.

1 – Effective Cash Tax Rate (CTR)

This metric decreased steadily over the years, starting at 84.46% in 2019 and falling to 77.64% by 2024. The reduction signifies an increase in the effective cash tax rate over time, as the complementary percentage (1-CTR) diminished. This suggests the company has been subject to higher cash tax payments relative to its taxable income across the period, with a more pronounced decline especially in the transition from 2019 to 2020.

Return on Invested Capital (ROIC)

Return on invested capital displayed significant volatility during the timeframe. It started at a high value of 29.49% in 2019 but experienced a sharp decrease to 12.98% in 2020. This was followed by a robust recovery to 26.11% in 2021 and slightly increased to 26.29% in 2022. Thereafter, ROIC declined gradually to 24.58% in 2023 and further to 23.25% in 2024. The pattern indicates susceptibility to external pressures in 2020 with a strong rebound afterward, albeit with a moderate decreasing trend in the last two years.

Summary of Overall Trends

The analyzed data reveals a notable impact during the 2020 period, where operational efficiency, capital turnover, and return on capital were adversely affected. Recovery trends are visible in subsequent years, though the metrics have not consistently returned to or exceeded pre-2020 levels. Operating profit margin and ROIC show signs of stabilization at levels somewhat below the initial year, while turnover of capital has mostly recovered but with slight recent weakening. The steady increase in the effective cash tax rate over the years may have exerted downward pressure on net profitability and capital returns. Collectively, these trends suggest moderate recovery with lingering challenges in maintaining previous performance peaks.

The financial data reveals significant fluctuations in key performance indicators over the six-year period.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT experienced a notable decline from 2019 to 2020, dropping from 4952 million USD to 3241 million USD. This was followed by a strong recovery in 2021, reaching 6880 million USD, maintaining a similar level in 2022 at 6871 million USD. A decrease is observed again in 2023 to 6276 million USD, with a slight improvement in 2024 to 6627 million USD. Overall, the NOPBT shows volatility with a recovery trend after the initial drop in 2020, but it does not fully return to the peak of 2021 and 2022.

Revenues

Revenues declined from 39117 million USD in 2019 to 37403 million USD in 2020, reflecting a reduction potentially linked to market or operational challenges. However, revenues increased significantly in 2021 to 44538 million USD and continued a steady upward trajectory through 2024, reaching 51362 million USD. This consistent revenue growth from 2021 onwards indicates positive sales performance and market expansion or recovery.

Operating Profit Margin (OPM)

The operating profit margin mirrors the NOPBT trends, showing a dip from 12.66% in 2019 to 8.66% in 2020. It then increased sharply to 15.45% in 2021 and slightly decreased but remained relatively high at 14.71% in 2022. The margin decreased more notably in 2023 to 12.25% but showed a modest recovery to 12.9% in 2024. This pattern suggests fluctuations in operational efficiency and cost management, with a general improvement after the low margin of 2020.

In summary, the data indicates that after a challenging year in 2020, there was a robust recovery in both profitability and revenue, although profitability margins have somewhat softened since their peak in 2021. Revenues demonstrate a consistent upward trend from 2021 to 2024, supporting the potential for sustained financial strength despite some profit margin pressures.

Revenues

The revenues showed a decline from 39,117 million USD in 2019 to 37,403 million USD in 2020, likely reflecting external challenges during that period. From 2020 onward, revenues exhibited a consistent upward trend, increasing to 44,538 million USD in 2021, 46,710 million USD in 2022, and reaching 51,217 million USD in 2023. The slight increase to 51,362 million USD in 2024 suggests stabilizing revenue growth.

Invested Capital

Invested capital increased substantially from 14,182 million USD in 2019 to 19,083 million USD in 2020, and continued to rise to 21,022 million USD in 2021. From 2021 to 2022, the invested capital remained relatively stable at around 21,137 million USD, followed by a marginal decline to 20,394 million USD in 2023. However, in 2024, the invested capital increased again to 22,129 million USD, indicating renewed investment or asset growth.

Turnover of Capital (TO)

The turnover of capital ratio experienced a marked decline from 2.76 in 2019 to 1.96 in 2020, consistent with the reduced revenue and increased capital base during that year. Subsequently, the ratio improved gradually, moving to 2.12 in 2021, 2.21 in 2022, and 2.51 in 2023, reflecting more efficient use of capital as revenues increased relative to invested capital. In 2024, the turnover ratio saw a slight decrease to 2.32, which may indicate a relative increase in capital outpacing revenue growth in that year.

The financial data presents key operational and tax metrics over six consecutive fiscal years. The analysis highlights trends in cash operating taxes, net operating profit before taxes (NOPBT), and the effective cash tax rate (CTR).

Cash Operating Taxes

Cash operating taxes exhibit a generally increasing trend over the period. Starting from US$770 million in 2019, the figure remained relatively stable in 2020 at US$764 million. Thereafter, a significant jump occurred in 2021 to US$1390 million, followed by a slight decrease to US$1313 million in 2022. The amount decreased marginally again in 2023 to US$1264 million before rising sharply to US$1482 million in 2024. This pattern suggests periods of volatility with an overall upward trajectory in cash taxes paid.

Net Operating Profit Before Taxes (NOPBT)

NOPBT declined substantially from US$4952 million in 2019 to US$3241 million in 2020, reflecting a sharp drop likely influenced by external factors. However, a strong recovery is observed in 2021 with NOPBT rising to US$6880 million, nearly doubling the prior year’s figure. This profitability remained relatively stable in 2022 at US$6871 million but experienced a moderate decline in 2023 to US$6276 million. In 2024, the NOPBT increased again slightly to US$6627 million, indicating some restoration of operating performance.

Effective Cash Tax Rate (CTR)

The effective cash tax rate showed notable variability, starting at 15.54% in 2019 and increasing to 23.56% in 2020. Following that, there was a decline to 20.21% in 2021 and further stabilization around 19-20% in 2022 and 2023. In 2024, the CTR rose again to 22.36%. This fluctuation in tax rate indicates changing tax efficiencies or impacts from variations in taxable income and tax regulations affecting the company over time.

In summary, the company experienced a significant dip and subsequent recovery in operating profit before taxes, with cash operating taxes generally increasing albeit with some year-to-year fluctuations. The effective cash tax rate exhibits moderate volatility but remains within a range of approximately 15% to 24%, suggesting variability in tax obligations relative to operating profit levels during the timeframe analyzed.