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Business Wire
11 hours ago
- Business
- Business Wire
NIKE, Inc. Reports Fiscal 2025 Fourth Quarter
BEAVERTON, Ore.--(BUSINESS WIRE)--NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2025 fourth quarter and full year ended May 31, 2025. Full year revenues were $46.3 billion, down 10 percent on a reported basis compared to the prior year and down 9 percent on a currency-neutral basis* Fourth quarter revenues were $11.1 billion, down 12 percent on a reported basis and down 11 percent on a currency-neutral basis NIKE Direct revenues for the fourth quarter were $4.4 billion, down 14 percent on a reported and currency-neutral basis Wholesale revenues for the fourth quarter were $6.4 billion, down 9 percent on a reported and currency-neutral basis Gross margin for the fourth quarter decreased 440 basis points to 40.3 percent Diluted earnings per share was $0.14 for the fourth quarter "While our financial results are in-line with our expectations, they are not where we want them to be. Moving forward, we expect our business to improve as a result of the progress we're making through our Win Now actions," said Elliott Hill, President & CEO, NIKE, Inc. "As we enter a new fiscal year, we are turning the page and the next step is aligning our teams to lead with sport through what we are calling the sport offense. This will accelerate our Win Now actions to reposition our business for future growth." The sport offense realignment will focus on driving distinction within key sports, building a complete product portfolio, creating stories to inspire and connect with consumers, and elevating and growing the entire marketplace. "The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here," said Matthew Friend, Executive Vice President & Chief Financial Officer, NIKE, Inc. "I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control and executing our Win Now actions." Fourth Quarter Income Statement Review Revenues for NIKE, Inc. were $11.1 billion, down 12 percent on a reported basis and down 11 percent on a currency-neutral basis. Revenues for the NIKE Brand were $10.8 billion, down 11 percent on a reported and currency-neutral basis, driven by declines across all geographies. NIKE Direct revenues were $4.4 billion, down 14 percent on a reported and currency-neutral basis, due to a 26 percent decrease in NIKE Brand Digital, partially offset by a 2 percent increase in NIKE-owned stores. Wholesale revenues for the fourth quarter were $6.4 billion, down 9 percent on a reported and currency-neutral basis. Revenues for Converse were $357 million, down 26 percent on a reported and currency-neutral basis, due to declines across all territories. Gross margin decreased 440 basis points to 40.3 percent, primarily due to higher discounts and changes in channel mix. Selling and administrative expense increased 1 percent to $4.1 billion. Demand creation expense was $1.3 billion, up 15 percent, primarily due to higher sports marketing expense and higher brand marketing expense. Operating overhead expense decreased 3 percent to $2.9 billion, primarily due to restructuring charges in the prior year, lower wage-related expenses and lower other administrative costs. The effective tax rate was 33.6 percent, compared to 13.1 percent for the same period last year, primarily due to decreased benefits from stock-based compensation and one-time items that have an outsized impact on the tax rate because of lower pre-tax income in the quarter. Net income was $0.2 billion, down 86 percent, and Diluted earnings per share was $0.14, a decrease of 86 percent. Fiscal 2025 Income Statement Review Revenues for NIKE, Inc. were $46.3 billion, down 10 percent on a reported basis and down 9 percent on a currency-neutral basis. Revenues for the NIKE Brand were $44.7 billion, down 9 percent on a reported and currency-neutral basis, driven by declines across all geographies. NIKE Direct revenues were $18.8 billion, down 13 percent on a reported basis and down 12 percent on a currency-neutral basis, due to a 20 percent decrease in NIKE Brand Digital, while NIKE-owned stores were flat. Wholesale revenues were $25.9 billion, down 7 percent on a reported basis and down 6 percent on a currency-neutral basis. Revenues for Converse were $1.7 billion, down 19 percent on a reported basis and down 18 percent on a currency-neutral basis, due to declines across all territories. Gross margin decreased 190 basis points to 42.7 percent, primarily due to higher discounts, changes in channel mix and higher inventory obsolescence reserves, partially offset by lower product costs. Selling and administrative expense decreased 3 percent to $16.1 billion. Demand creation expense was $4.7 billion, up 9 percent, primarily due to higher brand marketing expense and higher sports marketing expense. Operating overhead expense decreased 7 percent to $11.4 billion, primarily due to restructuring charges in the prior year, lower wage-related expenses and lower other administrative costs. The effective tax rate was 17.1 percent, compared to 14.9 percent for the same period last year, primarily due to changes in earnings mix, decreased benefits from stock-based compensation and non-recurring one-time benefits in the prior year, partially offset by a one-time, non-cash deferred tax benefit provided by US tax regulations related to foreign currency gains and losses. Net income was $3.2 billion, down 44 percent, and Diluted earnings per share was $2.16, a decrease of 42 percent. May 31, 2025 Balance Sheet Review Inventories for NIKE, Inc. were $7.5 billion, flat compared to the prior year. Cash and equivalents and short-term investments were $9.2 billion, down approximately $2.4 billion from last year, as cash generated from operations was more than offset by share repurchases, cash dividends, bond repayment 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 fourth quarter, the Company returned approximately $0.8 billion to shareholders, including: Dividends of $591 million, up 6 percent from prior year. Share repurchases of $202 million, reflecting 3.2 million shares retired as part of the four-year, $18 billion program approved by the Board of Directors in June 2022. In fiscal 2025, the Company returned approximately $5.3 billion to shareholders, including: Dividends of $2.3 billion, up 6 percent from prior year. Share repurchases of $3.0 billion, reflecting 37.6 million shares retired as part of the four-year, $18 billion program approved by the Board of Directors in June 2022. As of May 31, 2025, a total of 122.6 million shares have been repurchased under the current program for a total of approximately $12.0 billion. Conference Call NIKE, Inc. management will host a conference call beginning at approximately 2:00 p.m. PT on June 26, 2025, to review fiscal fourth quarter and full year results. The conference call will be broadcast live via the Internet and can be accessed at For those unable to listen to the live broadcast, an archived version will be available at the same location through 9:00 p.m. PT, July 17, 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. For more information, NIKE, Inc.'s earnings releases and other financial information are available on the Internet at Individuals can also visit and follow @NIKE. Forward-Looking Statements This press release contains forward-looking statements regarding our expectations of our future results and our strategy, 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. NIKE, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited) May 31, May 31, % Change (Dollars in millions) 2025 2024 ASSETS Current assets: Cash and equivalents $ 7,464 $ 9,860 -24 % Short-term investments 1,687 1,722 -2 % Accounts receivable, net 4,717 4,427 7 % Inventories 7,489 7,519 0 % Prepaid expenses and other current assets 2,005 1,854 8 % Total current assets 23,362 25,382 -8 % Property, plant and equipment, net 4,828 5,000 -3 % Operating lease right-of-use assets, net 2,712 2,718 0 % Identifiable intangible assets, net 259 259 0 % Goodwill 240 240 0 % Deferred income taxes and other assets 5,178 4,511 15 % TOTAL ASSETS $ 36,579 $ 38,110 -4 % LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ — $ 1,000 -100 % Notes payable 5 6 -17 % Accounts payable 3,479 2,851 22 % Current portion of operating lease liabilities 502 477 5 % Accrued liabilities 5,911 5,725 3 % Income taxes payable 669 534 25 % Total current liabilities 10,566 10,593 0 % Long-term debt 7,961 7,903 1 % Operating lease liabilities 2,550 2,566 -1 % Deferred income taxes and other liabilities 2,289 2,618 -13 % Redeemable preferred stock — — — Shareholders' equity 13,213 14,430 -8 % TOTAL LIABILITIES AND SHAREHOLDERS ' EQUITY $ 36,579 $ 38,110 -4 % Expand NIKE, Inc. DIVISIONAL REVENUES (Unaudited) % Change Excluding Currency Changes 1 % Change Excluding Currency Changes 1 THREE MONTHS ENDED % TWELVE MONTHS ENDED % (Dollars in millions) 5/31/2025 5/31/2024 Change 5/31/2025 5/31/2024 Change North America Footwear $ 3,104 $ 3,587 -13 % -13 % $ 12,684 $ 14,537 -13 % -13 % Apparel 1,303 1,398 -7 % -7 % 5,837 5,953 -2 % -2 % Equipment 296 293 1 % 2 % 1,051 906 16 % 16 % Total 4,703 5,278 -11 % -11 % 19,572 21,396 -9 % -8 % Europe, Middle East & Africa Footwear 1,893 2,067 -8 % -9 % 7,569 8,473 -11 % -10 % Apparel 929 1,049 -11 % -12 % 3,971 4,380 -9 % -9 % Equipment 178 176 1 % 0 % 717 754 -5 % -5 % Total 3,000 3,292 -9 % -10 % 12,257 13,607 -10 % -10 % Greater China Footwear 1,074 1,357 -21 % -20 % 4,805 5,552 -13 % -13 % Apparel 372 460 -19 % -19 % 1,616 1,828 -12 % -12 % Equipment 30 46 -35 % -33 % 165 165 0 % 1 % Total 1,476 1,863 -21 % -20 % 6,586 7,545 -13 % -12 % Asia Pacific & Latin America Footwear 1,114 1,226 -9 % -5 % 4,452 4,865 -8 % -4 % Apparel 398 416 -4 % -1 % 1,541 1,614 -5 % -1 % Equipment 63 63 0 % 3 % 258 250 3 % 7 % Total 1,575 1,705 -8 % -3 % 6,251 6,729 -7 % -3 % Global Brand Divisions 2 9 11 -18 % 0 % 48 45 7 % 10 % TOTAL NIKE BRAND 10,763 12,149 -11 % -11 % 44,714 49,322 -9 % -9 % Converse 357 480 -26 % -26 % 1,692 2,082 -19 % -18 % Corporate 3 (23 ) (23 ) — — (97 ) (42 ) — — TOTAL NIKE, INC. REVENUES $ 11,097 $ 12,606 -12 % -11 % $ 46,309 $ 51,362 -10 % -9 % TOTAL NIKE BRAND Footwear $ 7,185 $ 8,237 -13 % -12 % $ 29,510 $ 33,427 -12 % -11 % Apparel 3,002 3,323 -10 % -9 % 12,965 13,775 -6 % -5 % Equipment 567 578 -2 % -1 % 2,191 2,075 6 % 6 % Global Brand Divisions 2 9 11 -18 % 0 % 48 45 7 % 10 % TOTAL NIKE BRAND REVENUES $ 10,763 $ 12,149 -11 % -11 % $ 44,714 $ 49,322 -9 % -9 % 1 The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies. 2 Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. 3 Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through the Company's central foreign exchange risk management program. Expand NIKE, Inc. (Unaudited) % Change Excluding Currency Changes 1 TWELVE MONTHS ENDED (Dollars in millions) 5/31/2025 5/31/2024 Change NIKE Brand Revenues by: Sales to Wholesale Customers $ 25,883 $ 27,758 -7 % -6 % Sales through NIKE Direct 18,783 21,519 -13 % -12 % Global Brand Divisions 2 48 45 7 % 10 % TOTAL NIKE BRAND REVENUES $ 44,714 $ 49,322 -9 % -9 % NIKE Brand Revenues by: 3 Men's $ 23,216 $ 24,785 -6 % -6 % Women's 9,719 10,366 -6 % -5 % Kids' 5,695 6,019 -5 % -5 % Jordan Brand 7,270 8,701 -16 % -16 % Others 4 (1,234 ) (594 ) -108 % -106 % Global Brand Divisions 2 48 45 7 % 10 % TOTAL NIKE BRAND REVENUES $ 44,714 $ 49,322 -9 % -9 % 1 The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies. 2 Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. 3 Beginning in fiscal 2025, with the continued rollout of a new Enterprise Resource Planning Platform, we have removed the non-GAAP financial measure of wholesale equivalent revenues. There is no change to our reported revenues or gross margin. Prior year amounts have been recast to conform to fiscal 2025 presentation. 4 Others include products not allocated to Men's, Women's, Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer. Expand NIKE, Inc. EARNINGS BEFORE INTEREST AND TAXES 1 (Unaudited) THREE MONTHS ENDED % TWELVE MONTHS ENDED % (Dollars in millions) 5/31/2025 5/31/2024 Change 5/31/2025 5/31/2024 Change North America $ 1,045 $ 1,462 -29 % $ 4,735 $ 5,822 -19 % Europe, Middle East & Africa 472 797 -41 % 2,575 3,388 -24 % Greater China 304 548 -45 % 1,602 2,309 -31 % Asia Pacific & Latin America 319 479 -33 % 1,527 1,885 -19 % Global Brand Divisions 2 (1,246 ) (1,148 ) -9 % (4,699 ) (4,720 ) 0 % TOTAL NIKE BRAND 1 894 2,138 -58 % 5,740 8,684 -34 % Converse 27 94 -71 % 240 474 -49 % Corporate 3 (625 ) (559 ) -12 % (2,202 ) (2,619 ) 16 % TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES 1 296 1,673 -82 % 3,778 6,539 -42 % EBIT margin 1 2.7 % 13.3 % 8.2 % 12.7 % Interest expense (income), net (22 ) (53 ) — (107 ) (161 ) — TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 318 $ 1,726 -82 % $ 3,885 $ 6,700 -42 % 1 Management evaluates the performance of the Company's segments and allocates resources based on earnings before interest and taxes (commonly referred to as "EBIT"), which represents Net income before Interest expense (income), net and Income tax expense. Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin are considered non-GAAP financial measures. Management uses these non-GAAP financial measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. EBIT margin is calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. References to EBIT and EBIT margin should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies. 2 Global Brand Divisions primarily represents costs, including product creation and design expenses, that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. 3 Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses. For the twelve months ended May 31, 2024, Corporate includes the restructuring charges, recognized as a result of the Company taking steps to streamline the organization. These charges primarily reflect employee severance costs. An immaterial amount of restructuring charges was recognized for the three months ended May 31, 2024. Expand NIKE, Inc. DILUTED EARNINGS PER SHARE (Unaudited) 5/31/2024 DILUTED EARNINGS PER SHARE (GAAP): $ 0.99 $ 3.73 Add: Restructuring charges 0.03 0.29 Tax effect of the restructuring charges 1 (0.01 ) (0.07 ) DILUTED EARNINGS PER SHARE EXCLUDING RESTRUCTURING CHARGES (NON-GAAP): 2 $ 1.01 $ 3.95 1 Tax effect was determined by applying the tax rate applicable to the specific item. 2 Diluted earnings per share excluding the restructuring charges is a non-GAAP financial measure. The most comparable GAAP measure is Diluted earnings per share. The Company uses Diluted earnings per share excluding the restructuring charges to facilitate the evaluation of the Company's performance. The Company believes that providing Diluted earnings per share excluding the impacts of the restructuring charges is useful to investors for comparability between periods and allows investors to evaluate the impacts of the restructuring charges separately. For the three and twelve months ended May 31, 2025, there were no material restructuring charges impacting comparability. Expand
Yahoo
21-03-2025
- Business
- Yahoo
Nike Inc (NKE) Q3 2025 Earnings Call Highlights: Navigating Revenue Declines and Strategic ...
Revenue: Down 9% on a reported basis and down 7% on a currency-neutral basis. NIKE Direct: Declined 10%, with NIKE Digital down 15% and NIKE stores down 2%. Wholesale: Down 4%, largely due to declines in Greater China. Gross Margin: Declined 330 basis points to 41.5% on a reported basis. SG&A Expenses: Down 8% on a reported basis. Effective Tax Rate: 5.9%, compared to 16.5% for the same period last year. Earnings Per Share (EPS): $0.54. Inventory: Declined 2% versus the prior year. North America Revenue: Declined 4%, with NIKE Direct down 10% and Wholesale up 3%. EMEA Revenue: Declined 6%, with NIKE Direct down 12% and Wholesale down 3%. Greater China Revenue: Declined 15%, with NIKE Direct down 11% and Wholesale down 18%. APLA Revenue: Declined 4%, with NIKE Direct down 4% and Wholesale down 4%. Warning! GuruFocus has detected 4 Warning Sign with FDX. Release Date: March 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Nike Inc (NYSE:NKE) is making significant progress in diversifying its product portfolio, with a focus on performance and sportswear across various categories, including men's, women's, and kids' footwear, apparel, and accessories. The company is actively working to reignite brand momentum through strategic investments in brand marketing and sports marketing, resulting in high single-digit growth in demand creation expenses. Nike Inc (NYSE:NKE) has successfully launched new innovative products like the Peg Premium and Vomero 18, which have shown strong consumer response and sell-through rates. The company is committed to creating a more integrated marketplace, aligning both direct and wholesale channels to provide a consistent consumer experience. Nike Inc (NYSE:NKE) is taking proactive steps to clean up the marketplace, particularly in Greater China, to ensure a healthier inventory and better brand positioning. Nike Inc (NYSE:NKE) reported a 9% decline in revenues on a reported basis and a 7% decline on a currency-neutral basis for the third quarter, reflecting significant headwinds. Gross margins declined by 330 basis points to 41.5% due to higher markdowns, wholesale discounts, and inventory obsolescence. The company is facing challenges in its classic footwear franchises, with double-digit declines impacting overall business performance. Nike Inc (NYSE:NKE) is experiencing elevated inventory levels across all geographies, which are expected to take several quarters to normalize. The company anticipates continued headwinds in revenue and gross margin in the near term, particularly due to the ongoing cleanup of the marketplace and promotional activities. Q: Elliott, can you provide a timeline on when you think classic shoe inventories will be clean in the wholesale channel? And then same question for the direct channel as well. A: Elliott Hill, President and CEO, explained that Nike is focused on rightsizing their classic shoe inventories, particularly Air Force 1, Dunk, and AJ1, rather than sunsetting them. He emphasized the importance of running a balanced and complete portfolio across all brands and categories. By the end of Q4, Nike expects to reduce the contribution of these franchises by 10 percentage points as a percent of their overall footwear mix, with further reductions planned for fiscal year '26. The company is taking actions to clean up the marketplace, including transitioning excess inventory to factory stores and value channels. Q: Elliott, I was hoping to get your latest thoughts on innovation within NIKE. How do you feel about the strength of your innovation team and the pipeline ahead? A: Elliott Hill, President and CEO, expressed confidence in Nike's innovation team and pipeline. He highlighted the long-term innovation efforts at the LeBron James Nike Sports Research Lab and the near-term focus on driving newness and freshness across performance and sportswear categories. Hill mentioned successful innovations like the 24/7 apparel collection and new footwear models such as Vomero 5 and P-6000. He also noted excitement about the upcoming Spring '26 product line. Q: Elliott, based on some of the comments earlier from Matt around performance growth almost offsetting Classics declines, do you expect that inflection point to be in Spring '26? A: Elliott Hill, President and CEO, stated that Nike is gaining confidence in their product pipeline and expects performance growth to offset declines in classic footwear franchises. The key focus is on cleaning up the marketplace to make room for new innovations and ensuring proper presentation at point of sale. Hill emphasized the importance of driving sell-through to support the order book and return to profitable, sustainable growth. Q: Elliot, I'm curious how are you going to balance the promotional? Just like as you think about the presentation and bring out promotions at the same time that it's clear we can hear your excitement around the new product and you're amplifying storytelling. A: Elliott Hill, President and CEO, explained that Nike is moving both digital and physical retail spaces to full price as quickly as possible, using value channels to clear excess inventory. He highlighted successful examples of new product launches like Peg Premium and Vomero 18, which have seen strong sell-through. The focus is on resetting the marketplace to full price and maintaining urgency in the transition. Q: I just wanted to focus on wholesale here. And maybe for Elliott, as you've kind of returned to that channel gotten back in the mix, I'm just curious, your biggest learnings there, any surprises to the upside or downside versus how you've historically operated there with all your knowledge? A: Elliott Hill, President and CEO, noted that Nike had been working too siloed between direct and wholesale channels. He emphasized the need for an integrated, consumer-led marketplace approach. Hill highlighted the importance of working closely with wholesale partners, aligning growth plans, and elevating brand presentation. He expressed confidence in the progress being made and the commitment to rebuilding relationships with wholesale partners. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
