Nike (NKE) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenues were $11.6B, down 10% year-over-year, with declines in all major segments and channels.

• Gross margin improved by 120 bps to 45.4% due to lower costs and strategic pricing.

• Net income fell 28% to $1.05B, and diluted EPS decreased 26% to $0.70.

• CEO transition underway as Elliott Hill becomes President and CEO, with full-year guidance withdrawn and Investor Day postponed.

• Inventory rose 10% sequentially to $8.3B, driven by higher units.

Financial highlights

• NIKE Brand revenues declined 10% (9% currency-neutral), with footwear and apparel both down 10% and 9% respectively.

• NIKE Direct revenues fell 13% to $4.7B, with digital sales down 20% and flat comparable store sales.

• Wholesale revenues decreased 8% to $6.4B.

• Gross margin expanded 120 bps to 45.4% due to lower costs and strategic pricing.

• SG&A declined 2%, with increased demand creation offset by wage-related savings.

Outlook and guidance

• Withdrawing full-year guidance; Q2 revenue expected to decline 8%-10% year-over-year.

• Q2 gross margin expected to decline ~150 bps due to higher promotions, channel mix, and supply chain deleverage.

• SG&A to be roughly flat; other income/expense $30-40M; tax rate in high teens.

• Management expects continued volatility in FY2025 due to cautious consumer spending, product portfolio rebalancing, and channel mix shifts.

• Ongoing ERP rollout and supply chain investments are expected to support long-term growth.