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Nike Free Cash Flow

: $6,183 Mil (TTM As of Aug. 2021)
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Nike's total free cash flow for the months ended in Aug. 2021 was $927 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Aug. 2021 was $6,183 Mil.

Nike's Free Cash Flow per Share for the months ended in Aug. 2021 was $0.57. Its free cash flow per share for the trailing twelve months (TTM) ended in Aug. 2021 was $3.83.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Nike was 205.90% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 16.10% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 11.00% per year. During the past 10 years, the average Free Cash Flow per Share Growth Rate was 12.40% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, Nike's highest 3-Year average Free Cash Flow per Share Growth Rate was 214.10% per year. The lowest was -51.60% per year. And the median was 13.50% per year.


Nike Free Cash Flow Historical Data

The historical data trend for Nike's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Nike Annual Data
Trend May12 May13 May14 May15 May16 May17 May18 May19 May20 May21
Free Cash Flow
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2,741.00 3,927.00 4,784.00 1,399.00 5,962.00

Nike Quarterly Data
Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21
Free Cash Flow Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 706.00 2,305.00 1,113.00 1,838.00 927.00

Nike Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company’s earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year’s Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Note: GuruFocus does not calculate Free Cash Flow when Capital Expenditure is 0.

Nike's Free Cash Flow for the fiscal year that ended in May. 2021 is calculated as

Free Cash Flow (A: May. 2021 )=Cash Flow from Operations+Capital Expenditure
=6657+-695
=5,962

Nike's Free Cash Flow for the quarter that ended in Aug. 2021 is calculated as

Free Cash Flow (Q: Aug. 2021 )=Cash Flow from Operations+Capital Expenditure
=1111+-184
=927

Free Cash Flow for the trailing twelve months (TTM) ended in Aug. 2021 adds up the quarterly data reported by the company within the most recent 12 months, which was $6,183 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Nike  (NYSE:NKE) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Aug21, Nike's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Aug21)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=2.29352381/164.74+0.0505
=6.44 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Nike Free Cash Flow Related Terms

Thank you for viewing the detailed overview of Nike's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.


Nike Business Description

Nike logo
Address
One Bowerman Drive, Beaverton, OR, USA, 97005-6453
Nike is the largest athletic footwear and apparel brand in the world. It designs, develops, and markets athletic apparel, footwear, equipment, and accessories in six major categories: running, basketball, soccer, training, sportswear, and Jordan. Footwear generates about two thirds of its sales. Nike's brands include Nike, Jordan, and Converse (casual footwear). Nike sells products worldwide and outsources its production to more than 300 factories in more than 30 countries. Nike was founded in 1964 and is based in Beaverton, Oregon.
Executives
Krane Hilary K officer: EVP, CAO & General Counsel ONE BOWERMAN DRIVE BEAVERTON OR 97005
Parker Mark G director, officer: EXECUTIVE CHAIRMAN PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: PARKER MARK G a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Knight Philip H other: Chairman Emeritus ONE BOWERMAN DR BEAVERTON OR 97005-6453
Campion Andrew officer: CHIEF OPERATING OFFICER ONE BOWERMAN DRIVE BEAVERTON OR 97005
Comstock Elizabeth J director GENERAL ELECTRIC COMPANY 41 FARNSWORTH STREET BOSTON MA 02210
Matheson Monique S. officer: EVP: HR ONE BOWERMAN DRIVE BEAVERTON OR 97005
Knight Travis A director ONE BOWERMAN DRIVE BEAVERTON OR 97005
Peluso Michelle A director 3150 SABRE DRIVE SOUTHLAKE TX 76092
Graf Alan B Jr director 1600 ROYAL ST JASPER IN 47549
Benko Cathleen A director ONE BOWERMAN DRIVE BEAVERTON OR 97005
Duckett Thasunda director ONE BOWERMAN DRIVE BEAVERTON OR 97005
Rogers John W Jr director ARIEL CAPITAL MANAGEMENT, INC. 200 EAST RANDOLPH DRIVE, SUITE 2900 CHICAGO IL 60601
Connors John G director NIKE INC. ONE BOWERMAN DRIVE BEAVERTON OR 97005
Henry Peter B. director C/O NEW YORK UNIVERSITY/KAUFMAN MGT CNT 44 WEST 4TH STREET, SUITE 11-160 NEW YORK CITY NY 10012
Cook Timothy D director C/O APPLE INC ONE INFINITE LOOP CUPERTINO CA 95014

Nike Headlines

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