Nike 2003 Annual Report Download - page 5

and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products,
styles and categories, and influencing sports and fitness preferences through aggressive marketing. This is a
continuing risk. Failure to timely and adequately respond could have a material adverse affect on our sales and
profitability.
United States Market
During fiscal 2003, sales in the United States accounted for approximately 49 percent of total revenues,
compared to 53 percent in fiscal 2002 and 54 percent in fiscal 2001. We sell to approximately 18,000 retail
accounts in the United States. The NIKE brand domestic retail account base includes a mix of footwear stores,
sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail
accounts. During fiscal year 2003, our three largest customers accounted for approximately 27 percent of NIKE
brand sales in the United States excluding sales from NIKE Golf and Bauer NIKE Hockey, and 24 percent of
total sales in the United States.
We make substantial use of our “futures” ordering program, which allows retailers to order five to six
months in advance of delivery with the commitment that 90 percent of their orders will be delivered within a set
time period at a fixed price. In fiscal year 2003, 91 percent of our U.S. footwear shipments (excluding Cole
Haan, Bauer, Hurley and NIKE Golf) were made under the futures program, compared to 92 percent in fiscal
2002 and 86 percent in fiscal 2001. In fiscal 2003, 67 percent of our U.S. apparel shipments were made under the
futures program, compared to 69 percent in fiscal 2002, and 67 percent in 2001.
We utilize 19 NIKE sales offices to solicit sales in the United States. We also utilize 11 independent sales
representatives to sell specialty products for golf, cycling, water sports and outdoor activities. In addition, we
operate the following retail outlets in the United States:
Retail Stores Number
NIKE factory stores (which carry primarily B-grade and close-out merchandise) .......... 75
NIKE stores (including NIKE Goddess Stores) .................................... 4
NIKETOWNs (designed to showcase NIKE products) ............................... 13
Employee-onlystores ........................................................ 4
Cole Haan stores (including factory and employee stores) ............................ 65
Total .............................................................. 161
NIKE’s domestic distribution centers for footwear are located in Wilsonville, Oregon, Memphis, Tennessee,
and Greenland, New Hampshire. Apparel products are shipped from our Memphis distribution center. Cole Haan
and Bauer NIKE Hockey products are distributed primarily from Greenland, New Hampshire, and Hurley
products are shipped from Costa Mesa, California.
International Markets
We currently market our products in nearly 200 countries outside of the United States through independent
distributors, licensees, subsidiaries and branch offices. Non-U.S. sales accounted for 51 percent of total revenues
in fiscal 2003, compared to 47 percent in fiscal 2002 and 46 percent in fiscal 2001. We operate 24 distribution
centers in Europe, Asia, Australia, Latin America, Africa and Canada, and also distribute through independent
distributors and licensees. We estimate that our products are sold through more than 30,000 retail accounts
outside the United States. In many countries and regions, including Japan, Canada, Asia, some Latin American
countries, and Europe, we have a futures ordering program for retailers similar to the United States futures
program described above. NIKE’s three largest customers outside of the U.S. accounted for approximately
14 percent of non-U.S. sales.
We operate 175 retail outlets outside the United States, which consist of NIKETOWNs, factory stores,
employee stores, and Cole Haan stores.
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