EPS of $0.54 decreased by 29.9% from previous year
Gross margin of 41.5%
Net income of 794.00M
""We told inspiring athletes stories, we brought more energy to sports biggest moments... and that’s exactly the kind of sustained pace we need to strengthen our business."" - Elliott Hill
In Q3 2025, NIKE Inc (NKE) reported revenues of $11.27 billion, reflecting a significant year-over-year decline of 9.33%. This decrease was attributed to challenging market conditions and heightened competition, particularly in Greater China. The company's gross profit margin fell to 41.5%, resulting in a gross profit of $4.68 billion, a drop of 15.95% year-over-year. Despite these hurdles, management emphasized ongoing investments in brand marketing and product innovation, reiterating their commitment to increasing the product portfolio's breadth. CEO Elliott Hill articulated that leading with sport remains central to NIKE's strategy, leveraging storytelling and community engagement to rejuvenate the brand. Management's focus on elevating the integrated marketplace will be crucial as the company aims to navigate through these turbulent times.
Key Performance Indicators
Revenue
11.27B
QoQ: -8.78% | YoY:-9.33%
Gross Profit
4.68B
41.49% margin
QoQ: -13.25% | YoY:-15.95%
Operating Income
788.00M
QoQ: -43.06% | YoY:-41.02%
Net Income
794.00M
QoQ: -31.73% | YoY:-32.25%
EPS
0.54
QoQ: -30.77% | YoY:-29.87%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $11.27 billion, down 9.33% YoY and 8.78% QoQ.
**Operating Income**: $788 million (down 41.02% YoY)
**Net Income**: $794 million (down 32.25% YoY; EPS: $0.54)
**Current Ratio**: 2.19
Financial Highlights
Financial Performance:
- Revenue: $11.27 billion, down 9.33% YoY and 8.78% QoQ.
- Gross Profit: $4.68 billion; Gross Profit Margin: 41.5% (down from previous year)
- Operating Income: $788 million (down 41.02% YoY)
- Net Income: $794 million (down 32.25% YoY; EPS: $0.54)
Key Ratios:
- Current Ratio: 2.19
- Long-Term Debt to Capitalization: 36.2%
- Net Income Margin: 7.05%
- Return on Equity: 5.67%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
11.27B
-9.33%
-8.78%
Gross Profit
4.68B
-15.95%
-13.25%
Operating Income
788.00M
-41.02%
-43.06%
Net Income
794.00M
-32.25%
-31.73%
EPS
0.54
-29.87%
-30.77%
Key Financial Ratios
currentRatio
2.19
grossProfitMargin
41.5%
operatingProfitMargin
6.99%
netProfitMargin
7.05%
returnOnAssets
2.1%
returnOnEquity
5.67%
debtEquityRatio
0.85
operatingCashFlowPerShare
$1.21
freeCashFlowPerShare
$1.15
dividendPayoutRatio
74.8%
priceToBookRatio
8.44
priceEarningsRatio
37.2
Net Income vs. Revenue
Expense Breakdown
Management Commentary
1. Performance and Strategy:
- Elliott Hill stated, "When we lead with sport, we create impact for NIKE."
- Emphasis on activating community connections and local athlete support.
2. Product and Inventory Management:
- "We are committed to creating a more breadth and depth season after season," addressing the need for innovation beyond classic franchises.
- Pivoting NIKE Digital towards a full-price business model to reform the marketplace.
3. Market Position:
- Strong focus on the appeal to new consumers, aiming for a diverse product portfolio across gender and performance categories.
"We told inspiring athletes stories, we brought more energy to sports biggest moments... and that’s exactly the kind of sustained pace we need to strengthen our business."
— Elliott Hill
"The bottom line is we are looking for opportunity on all fronts. Now, it's up to us to be consistent."
— Elliott Hill
Forward Guidance
Management's outlook for Q4 includes expectations of mid-teen revenue declines, with headwinds anticipated from current promotional strategies and the need to clear excess classically branded inventory. They highlighted the necessity of re-establishing a premium presentation in their digital and physical sales channels. Importantly, the focus remains on improving profitability by reducing promotional days in NIKE Digital and seeking full-price sales. By executing its strategic priorities effectively, management anticipates stabilization in revenue growth moving into FY 2026. Monitoring points for investors will include inventory levels, gross margin recovery, and the success of new product launches.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NKE Focus
41.49%
6.99%
5.67%
37.20%
DECK
60.30%
31.00%
17.40%
16.88%
ONON
60.60%
11.40%
2.41%
117.78%
SKX
52.10%
9.94%
4.43%
13.15%
SHOO
41.80%
12.00%
6.63%
15.69%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Despite the current challenges impacting performance metrics, NIKE Inc's strategic focus on innovation and cross-portfolio collaboration gives grounds for cautious optimism. The company's move towards full-price engagement and a revitalized storytelling approach aligns with shifting consumer behaviors and preferences. Investors should monitor the execution of management’s ‘Win Now’ plan, the effectiveness of new product initiatives, and how quickly NIKE can stabilize its marketplace. Given the strength of its brand and management's commitment to elevating performance, the long-term growth trajectory appears promising, contingent on navigating existing market pressures.
Key Investment Factors
Growth Potential
Management is cultivating a diversified product pipeline with strategic investments in both performance and sportswear lines. The focus on innovation is backed by promising launches like the Vomero 18 and the Pegasus Premium, which have been well-received in the market.
Profitability Risk
Operational challenges persist, particularly with inventory management in classic franchises. The competitive landscape in key markets like China remains intense, adding pressure on sales. Fluctuating foreign exchange rates and geopolitical dynamics also present ongoing risks.
Financial Position
NIKE maintains a robust balance sheet with a current ratio of 2.19, indicating good short-term financial health. However, the long-term debt position at 36.2% raises concerns about leverage, especially in a competitive environment.
SWOT Analysis
Strengths
Strong brand recognition and loyalty
Committed to innovation and diverse product offerings
Significant investment in marketing and partnerships
Weaknesses
Declining revenue in key markets
High reliance on classic product franchises which are facing stagnation
Stock price under pressure due to poor market performance
Opportunities
Growing digital sales channel
Expanding into emerging markets
Increasing demand for performance apparel and inclusive sizing
Threats
Intense competition from peers and private-label brands
Economic downturn impacting consumer spending
Supply chain disruptions affecting inventory and production