Nike reported Q3 FY2025 revenue of $11.269 billion, down 9.3% year-over-year and 8.8% quarter-over-quarter, with a gross margin of 41.5% and a net margin of 7.05%. Despite a meaningful top-line decline, the company delivered a solid level of profitability with EBIT of $788 million and generated free cash flow of $1.711 billion, supported by a robust operating cash flow of $1.792 billion. The balance sheet remains healthy, with total assets of $37.8 billion and total liquidity that supports ongoing shareholder returns and strategic investments. On the cash flow side, Nike returned approximately $506 million via share repurchases and about $594 million in dividends during the period, underscoring a commitment to capital allocation while maintaining a strong balance sheet (net debt of roughly $3.31 billion).
From a strategic standpoint, Nike continues to navigate a challenging macro backdrop while advancing its brand and direct-to-consumer (DTC) initiatives and leveraging its strong cash generation. The quarter’s profitability metrics show resilience relative to revenue declines, but investors should monitor ongoing cost pressures (logistics, FX, and commodity costs), inventory levels, and the pace of DTC and digital channel growth as the company progresses through the remainder of FY2025.
Valuation remains premium relative to peers, with a trailing P/E around 36.7x and an EV/EBITDA multiple in the mid-to-upper teens on the basis of this dataset. The near-term outlook hinges on demand normalization, continued brand strength, and the company’s ability to manage margin mix as it enhances its direct-to-consumer footprint and tightens its operating efficiency.