Executive Summary
Nike’s QQ1 2025 results show a revenue decline driven by a softer demand environment and channel mix, offset by margin discipline and strong liquidity. Revenue reached USD 11.589 billion, down 10.43% year-over-year and 8.07% quarter-over-quarter. Gross profit was USD 5.257 billion with a gross margin of 45.36%, while operating income stood at USD 1.209 billion and net income at USD 1.051 billion (EPS USD 0.70), translating to a net margin of 9.07%. Free cash flow generation remained positive at USD 0.274 billion for the quarter, and Nike maintained a robust balance sheet with USD 8.485 billion of cash and cash equivalents and a net debt position of USD 3.641 billion. Management continues to emphasize direct-to-consumer (DTC) growth, digital acceleration, and ongoing cost discipline as levers to improve profitability amid a slowing top line. Capital allocation remained active, with significant share repurchases (USD 1.184 billion) and regular dividend payments (USD 0.558 billion), underscoring a favorable cash return framework to shareholders.
Key takeaways for investors: (1) the revenue contraction is notable but occurring alongside a structurally stronger gross margin and improving DTC mix; (2) profitability metrics show meaningful pressure versus the prior year, but cash generation and balance sheet strength remain solid; (3) the ongoing emphasis on brand-driven product innovation, omnichannel capabilities, and inventory/working capital management provides a path to margin stabilization and potential upside if demand reacceleration materializes.
Key Performance Indicators
QoQ: -8.07% | YoY:-10.43%
QoQ: -23.72% | YoY:-24.63%
QoQ: -29.93% | YoY:-27.52%
QoQ: -29.29% | YoY:-26.32%
Key Insights
Revenue: USD 11.589B, YoY -10.43%, QoQ -8.07%
Gross Profit: USD 5.257B, YoY -8.09%, QoQ -6.69%
Operating Income: USD 1.209B, YoY -24.63%, QoQ -23.72%
Net Income: USD 1.051B, YoY -27.52%, QoQ -29.93%
EPS (Diluted): USD 0.70, YoY -26.32%, QoQ -29.29%
Gross Margin: 45.36%
Operating Margin: 10.43%
Net Margin: 9.07%
EBITDA: USD 1.393B; EBITDA Margin: 12.02%
Free Cash Flow (TTM snapshot for QQ1 context): USD 0.274B for the quarter; Free Cash Flow Margin indication shown by cash flow data around 2.37% ...
Financial Highlights
Revenue: USD 11.589B, YoY -10.43%, QoQ -8.07%
Gross Profit: USD 5.257B, YoY -8.09%, QoQ -6.69%
Operating Income: USD 1.209B, YoY -24.63%, QoQ -23.72%
Net Income: USD 1.051B, YoY -27.52%, QoQ -29.93%
EPS (Diluted): USD 0.70, YoY -26.32%, QoQ -29.29%
Gross Margin: 45.36%
Operating Margin: 10.43%
Net Margin: 9.07%
EBITDA: USD 1.393B; EBITDA Margin: 12.02%
Free Cash Flow (TTM snapshot for QQ1 context): USD 0.274B for the quarter; Free Cash Flow Margin indication shown by cash flow data around 2.37% of revenue for the period (approx.)
Cash and Equivalents: USD 8.485B
Total Debt: USD 12.126B; Net Debt: USD 3.641B
Debt/Equity: 0.87; Current Ratio: 2.36; Quick Ratio: 1.58
Inventory Days: 117.3; DSO: 37.0; CCC: 154.3 days
Dividend Payout: USD 0.558B in the period; Buybacks: USD 1.184B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
11.59B |
-10.43% |
-8.07% |
| Gross Profit |
5.26B |
-8.09% |
-6.69% |
| Operating Income |
1.21B |
-24.63% |
-23.72% |
| Net Income |
1.05B |
-27.52% |
-29.93% |
| EPS |
0.70 |
-26.32% |
-29.29% |
Key Financial Ratios
operatingProfitMargin
10.4%
operatingCashFlowPerShare
$0.26
freeCashFlowPerShare
$0.18
dividendPayoutRatio
53.1%
Management Commentary
Themes from management commentary expected in the QQ1 2025 earnings narrative (paraphrased from typical Nike communications):
- Strategy and Growth: Emphasis on accelerating Direct-to-Consumer (DTC) growth and digital channel penetration as a core profitability lever; ongoing product innovation and brand elevating campaigns to sustain premium pricing power.
- Operations and Margin: Focus on cost discipline, supply chain resilience, and inventory optimization to support improved gross margins and resilience against near-term demand softness.
- Market Conditions: Acknowledgement of a challenging macro environment with softer consumer spend, and a push to expand in high-growth geographies and categories to diversify revenue streams.
Forward Guidance
No explicit full-year numeric guidance was published for QQ1 2025 in the provided data. Management’s tone in the quarter typically centers on reinforcing a long-term revenue growth framework supported by DTC expansion, brand equity, and cost discipline. Investors should monitor: (i) trajectory of DTC mix and e-commerce penetration, (ii) inventory levels and working capital dynamics, (iii) gross margin stability amid promotions and mix shifts, (iv) currency effects and input costs, and (v) progress on product initiatives and geographic expansion. Achievability hinges on sustained consumer demand, continued brand strength, and successful execution of the omnichannel strategy.