NIKE Reports Fiscal 2025 Third Quarter Results

Published: 2025-03-21 08:12:35 ET NKE

BEAVERTON - NIKE, Inc. (NYSE:NKE) today reported fiscal 2025 financial results for its third quarter ended February 28, 2025.

Third quarter revenues were $11.3 billion, down 9 percent on a reported basis compared to the prior year and down 7 percent on a currency-neutral basis

NIKE Direct revenues were $4.7 billion, down 12 percent on a reported basis and down 10 percent on a currency-neutral basis

Wholesale revenues were $6.2 billion, down 7 percent on a reported basis and down 4 percent on a currency-neutral basis

Gross margin decreased 330 basis points to 41.5 percent

Diluted earnings per share was $0.54

'The progress we made against the 'Win Now' strategic priorities we committed to 90 days ago reinforces my confidence that we are on the right path,' said Elliott Hill, President and CEO, NIKE, Inc. 'What's encouraging is NIKE made an impact this quarter leading with sport - through athlete storytelling, performance products and big sport moments.'

'Our outlook for the second half of fiscal 2025 driven by our 'Win Now' actions remains consistent with what we communicated last quarter,' said Matthew Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. 'The operating environment is dynamic, but what matters most for NIKE is serving athletes with new product innovation and re-igniting brand momentum through sport.'

Third Quarter Income Statement Review

Revenues for NIKE, Inc. were $11.3 billion, down 9 percent on a reported basis compared to the prior year and down 7 percent on a currency-neutral basis.

NIKE Brand revenues were $10.9 billion, down 9 percent on a reported basis and down 6 percent on a currency-neutral basis, driven by declines across all geographies.

NIKE Direct revenues were $4.7 billion, down 12 percent on a reported basis and down 10 percent on a currency-neutral basis, primarily due to a 15 percent decrease in NIKE Brand Digital and a 2 percent decrease in NIKE-owned stores.

Wholesale revenues were $6.2 billion, down 7 percent on a reported basis and down 4 percent on a currency-neutral basis.

Revenues for Converse were $405 million, down 18 percent on a reported basis and down 16 percent on a currency-neutral basis, due to declines across all territories.

Gross margin decreased 330 basis points to 41.5 percent, primarily due to higher discounts, higher inventory obsolescence reserves, higher product costs and changes in channel mix, partially offset by restructuring charges in the prior year.

Selling and administrative expense decreased 8 percent to $3.9 billion.

Demand creation expense was $1.1 billion, up 8 percent, primarily due to an increase in brand marketing expense.

Operating overhead expense decreased 13 percent to $2.8 billion, primarily due to the restructuring charges of $340 million in the prior year and lower wage-related expenses.

The effective tax rate was 5.9 percent compared to 16.5 percent for the same period last year, primarily due to a one-time, non-cash deferred tax benefit provided by recently finalized US tax regulations related to foreign currency gains and losses.

Net income was $0.8 billion, down 32 percent, and Diluted earnings per share was $0.54, a decrease of 30 percent.

February 28, 2025 Balance Sheet Review

Inventories for NIKE, Inc. were $7.5 billion, down 2 percent compared to the prior year, reflecting product mix shifts, partially offset by an increase in units.

Cash and equivalents and short-term investments were $10.4 billion, down approximately $0.2 billion from last year, as cash generated by operations was more than offset by share repurchases, cash dividends and capital expenditures.

Shareholder Returns

NIKE continues to have a strong track record of consistently increasing returns to shareholders, including 23 consecutive years of increasing dividend payouts.

In the third quarter, the Company returned approximately $1.1 billion to shareholders, including: Dividends of $594 million, up 6 percent from the prior year.

Share repurchases of $499 million, reflecting 6.5 million shares retired as part of the Company's four-year, $18 billion program approved by the Board of Directors in June 2022.

As of February 28, 2025, a total of 119.3 million shares have been repurchased under the program for a total of approximately $11.8 billion.

Conference Call

NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on March 20, 2025, to review fiscal third quarter results. The conference call will be broadcast live via the Internet and can be accessed at https://investors.nike.com. For those unable to listen to the live broadcast, an archived version will be available at the same location through approximately 9:00 p.m. PT, April 10, 2025.

About NIKE, Inc.

NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories.

Forward-Looking Statements

This press release contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by NIKE with the U.S. Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K.

Contact:

Paul Trussell

Email: investor.relations@nike.com