Executive Summary
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.
Key Performance Indicators
QoQ: -13.25% | YoY:-15.95%
QoQ: -43.06% | YoY:-41.02%
QoQ: -31.73% | YoY:-32.25%
QoQ: -30.77% | YoY:-29.87%
Key Insights
Revenue: $11.269B; YoY change: -9.33%; QoQ change: -8.78%. Gross Profit: $4.675B; Gross Margin: 41.485% (vs. 41.418% prior period); YoY gross profit change: -15.95%; QoQ: -13.25%. Operating Income: $0.788B; Operating Margin: 6.99%; YoY change: -41.02%; QoQ: -43.06%. Net Income: $0.794B; Net Margin: 7.05%; YoY change: -32.25%; QoQ: -31.73%. EPS: $0.54; YoY: -29.87%; QoQ: -30.77%. Weighted Avg Shares (diluted): 1.491B.
Cash Flow and liquidity: Net cash provided by operating activities $1.792B; Fr...
Financial Highlights
Revenue: $11.269B; YoY change: -9.33%; QoQ change: -8.78%. Gross Profit: $4.675B; Gross Margin: 41.485% (vs. 41.418% prior period); YoY gross profit change: -15.95%; QoQ: -13.25%. Operating Income: $0.788B; Operating Margin: 6.99%; YoY change: -41.02%; QoQ: -43.06%. Net Income: $0.794B; Net Margin: 7.05%; YoY change: -32.25%; QoQ: -31.73%. EPS: $0.54; YoY: -29.87%; QoQ: -30.77%. Weighted Avg Shares (diluted): 1.491B.
Cash Flow and liquidity: Net cash provided by operating activities $1.792B; Free cash flow $1.711B; Cash and cash equivalents at period end $8.601B; Total cash and short-term investments $10.393B. Capital expenditures: $81M; Free cash flow per share $1.158. Dividends paid: $0.594B; Common stock repurchased: $0.506B. Net debt approximately $3.31B.
Balance sheet and leverage: Total assets $37.793B; Total liabilities $23.786B; Total stockholders’ equity $14.007B. Long-term debt $10.433B; Short-term debt $1.478B; Total debt $11.911B. Current ratio 2.19; Quick ratio 1.521; Cash ratio 0.766. Return metrics: ROA 2.10%; ROE 5.67%; ROCE 2.97%. Payout ratio 74.8%; Dividend yield 0.51%; Price-to-book 8.32x; Price-to-sales 10.34x; EV/EBITDA 116.30x.
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
operatingProfitMargin
6.99%
operatingCashFlowPerShare
$1.21
freeCashFlowPerShare
$1.16
dividendPayoutRatio
74.8%
Management Commentary
Note: The earnings transcript for QQ3 2025 is not provided in the supplied dataset. As a result, distinct management quotes and themes from the call could not be extracted. The following highlights are based on the quantified results and typical themes observed in Nike’s era-to-date communications: (a) Strategy emphasis on brand strength and selective investment in DTC and digital acceleration; (b) Operational discipline amid revenue normalization and ongoing margin management; (c) Market conditions likely to influence consumer demand and supply chain costs in the near term. For precise quotes and management commentary, access to the full earnings transcript is required.
Forward Guidance
The data set does not include formal forward-looking guidance from Nike for QQ4 2025 or FY2025. Given the observed margin pressure and revenue decline in QQ3 2025, investors should monitor: (1) the trajectory of gross and operating margins as Nike optimizes product mix and scaling of DTC and digital channels; (2) currency effects and freight/logistics costs that pressure cost of goods; (3) inventory levels and days of inventory outstanding (DIO), which at 102.9 days suggest potential working capital implications if demand slows further; (4) cash flow durability and capex plans in the context of ongoing share repurchases and dividend policy. If Nike can stabilize revenue declines while expanding gross margins through mix optimization and further DTC growth, the near-term outlook could improve more quickly than top-line trends imply. Key indicators to watch are gross margin trajectory, free cash flow generation, and any incremental guidance on regional demand patterns (e.g., North America vs. international markets) and freight costs.