Nike reported QQ2 2024 revenue of USD 12.354 billion, down 7.72% year over year, with a sequential rebound of 6.60% from QQ1 2024. Despite the top-line decline, gross profit reached USD 5.389 billion and a gross margin of 43.62%. Operating income stood at USD 1.384 billion, delivering an operating margin of 11.20%, while net income was USD 1.163 billion (net margin 9.41%) and diluted EPS at USD 2.29–2.31. The quarter showed meaningful sequential improvement in profitability metrics and cash flow dynamics, underscored by robust operating cash flow of USD 2.818 billion and free cash flow of USD 2.612 billion, contributing to a cash balance of USD 7.919 billion at period end and total liquidity near USD 9.9–9.9 billion when considering short-term investments.
The company’s balance sheet remains solid, with total assets of USD 37.203 billion and total liabilities of USD 23.057 billion. Nike maintains a strong liquidity position (current ratio 2.22, quick ratio 1.51) and a modest leverage profile (long-term debt USD 11.715 billion; total debt USD 12.177 billion; net debt USD 4.258 billion). The cash-generation profile supports shareholder returns, including USD 1.198 billion in share repurchases and USD 523 million in dividends in the period. Nike’s results reflect a shift in mix and channel strategy, with ongoing benefits from direct-to-consumer and digital channel expansion, even as the business faces tougher year-over-year comps and macro headwinds.
Management commentary for QQ2 2024 was not provided in the data set, limiting the ability to quote specific call remarks. However, the quantitative trend highlights a Brisk QoQ recovery and continued emphasis on operational discipline and cash generation, which are supportive of a constructive long-term investment thesis provided the company can stabilize top-line growth and maintain margin progression.
Cash flow and balance sheet:
- Operating cash flow: 2.818 billion; Free cash flow: 2.612 billion; Capex: 0.205 billion
- Cash and equivalents: 7.919 billion; Short-term investments: 2.008 billion; Total cash + ST investments: 9.928 billion
- Total assets: 37.203 billion; Total liabilities: 23.057 billion; Total stockholders’ equity: 14.146 billion
- Net debt: 4.258 billion; Current ratio: 2.22; Quick ratio: 1.512; Cash ratio: 0.709
Capital deployment and leverage:
- Dividends paid: 0.523 billion; Share repurchases: 1.198 billion; Payout ratio: 47.9%
- Long-term debt: 11.715 billion; Total debt to capitalization: 46.2%; Debt to equity: 0.86
Efficiency and operating metrics:
- DSO: 38.63 days; DIO: 103.13 days; DPO: 42.06 days; CCC: 99.69 days
- Gross margin stability with a large directory of product categories and channels; operating margin expansion QoQ signals improved seasonal execution and cost discipline.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
12.35B
-7.72%
6.60%
Gross Profit
5.39B
-9.75%
2.51%
Operating Income
1.38B
-24.16%
14.47%
Net Income
1.16B
-26.30%
10.66%
EPS
2.31
-25.96%
11.06%
Key Financial Ratios
currentRatio
2.22
grossProfitMargin
43.6%
operatingProfitMargin
11.2%
netProfitMargin
9.41%
returnOnAssets
3.06%
returnOnEquity
8.29%
debtEquityRatio
0.86
operatingCashFlowPerShare
$2.08
freeCashFlowPerShare
$1.82
dividendPayoutRatio
47.9%
priceToBookRatio
0.26
priceEarningsRatio
0.78
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings call transcript data not provided in the dataset. Consequently, no management quotes or thematic quotes from executives can be included for QQ2 2024. If you can share the transcript or key excerpts, I will synthesize them into themes (strategy, operations, market conditions) with context and significance.
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Forward Guidance
No explicit forward guidance is contained in the provided data. However, given the QQ2 quarterly dynamics and industry context, the following forward-looking considerations are relevant:
- Revenue trajectory: Expect continued focus on direct-to-consumer growth and digital acceleration to offset wholesale softness and geographic mix headwinds.
- Margin trajectory: Potential for margin stabilization or modest expansion through mix shift toward higher-margin DTC channels and ongoing cost discipline, though currency movements and input costs could pose headwinds.
- Inventory and working capital: Maintain disciplined inventory management to support near-term gross margin and cash flow stability; monitor days of inventory around the 100-day range.
- Macro and consumer demand: Demand normalization post-pandemic in key regions (e.g., North America, China) and ongoing competition in the athletic/apparel space are key variables. Watch for consumer sentiment, promotional intensity, and sport/event-driven demand cycles.
- Investment themes to monitor: DTC revenue contribution, e-commerce penetration, product innovation cycles, and geographic recovery (notably China).
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NKE.BA Focus
43.62%
11.20%
8.29%
78.30%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Bottom-line view: Nike presents a favorable medium-to-long-term investment thesis supported by strong cash generation, a robust balance sheet, and a strategic shift toward higher-margin DTC and digital channels. The QQ2 2024 results show a meaningful QoQ improvement in profitability metrics despite a YoY revenue decline, suggesting execution discipline and a resilient brand moat. Key sensitivities include demand normalization, currency dynamics, and the trajectory of top-line growth; investors should monitor ongoing inventory positioning, the pace of DTC growth, and any signs of stabilization in international markets. Given these factors, Nike remains attractive for investors seeking cash-generative quality with optionality from a higher-margin direct-to-consumer model, provided the company can reaccelerate top-line growth while maintaining margin discipline.
Key Investment Factors
Growth Potential
Nike’s sustained brand equity and ongoing expansion of direct-to-consumer and digital channels position the company for mid-teens operating leverage over time if top-line growth re-accelerates. The QQ2 2024 quarterly data shows gross margins above 43% with a firm cash-flow machine, providing optionality for strategic investments in product innovation, faster e-commerce fulfillment, and selective price/mix optimization.
Profitability Risk
Revenue decline YoY raises concerns about demand resilience and channel mix. Key risks include macro consumer weakness, currency volatility affecting international margins, aggressive competitive dynamics, and inventory management challenges that could pressure near-term profitability. The absence of explicit forward guidance adds some uncertainty on near-term top-line trajectory.
Financial Position
Nike maintains a robust liquidity cushion (cash + investments ~ USD 9.93B) and strong operating cash flow (USD 2.82B) with a stable balance sheet. Leverage remains moderate (net debt USD 4.26B; debt to capitalization ~46%). The company’s payout and buyback activity reflect a shareholder-friendly capital allocation framework, though the pace of buybacks could be tempered by continued emphasis on balance sheet resilience.
SWOT Analysis
Strengths
Global brand equity and leadership in athletic footwear and apparel
Solid free cash flow generation and resilient liquidity position
Scaleable direct-to-consumer and digital platforms with margin upside
Diverse product portfolio and licensed/licensed partnerships that broaden addressable markets
Weaknesses
YoY revenue decline raises questions on near-term demand resilience
Wholesale channel exposure and geographic mix risk (regional demand volatility)
High inventory levels relative to historical norms could pressure margins if demand softens
Opportunities
Accelerating DTC and e-commerce penetration to improve margin profile
Product innovation and premiumization to sustain pricing power
Geographic expansion and recovery in key markets (notably China and North America)
Threats
Intense competition from Adidas, Puma, and other athletic/lifestyle brands
Currency fluctuations and input cost pressures impacting margins
Macro consumer weakness and potential promo-intensive environment