Nike (NKE) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenues were $12.4B, down 8% year-over-year, with declines across all major geographies and Converse; leadership is emphasizing a renewed focus on sport, athlete-centric innovation, and brand storytelling to reposition for growth.

• Net income for Q2 FY2025 was $1.16B, a 26% decrease from the prior year; diluted EPS was $0.78, down 24%.

• Immediate actions include segmenting teams by sport and gender, rebalancing investments toward brand marketing, and empowering local teams in key markets.

• $1.6B was returned to shareholders in Q2 FY2025 via share repurchases and dividends.

• Leadership is committed to long-term shareholder value, even at the expense of near-term financial performance.

Financial highlights

• Q2 FY2025 revenues: $12.4B (-8% YoY); gross margin: 43.6% (down 100 bps YoY) due to higher discounts and channel mix.

• Net income: $1.16B for Q2 (-26% YoY); diluted EPS: $0.78 (down 24% YoY).

• NIKE Direct revenue fell 13%-14% YoY, with digital sales down 21% and comparable store sales down 2%.

• EBIT: $1.39B for Q2 (-27% YoY); EBIT margin: 11.3% (down from 14.2%).

• Operating cash flow for six months: $1.44B, down from $2.75B YoY.

Outlook and guidance

• Q3 revenues expected to decline low double digits year-over-year, reflecting strategic actions and FX headwinds.

• Q3 gross margins projected to decrease by 300-350 basis points, including restructuring charges.

• SG&A expected to be slightly down year-over-year, with continued tight expense management but increased demand creation investment.

• Management expects continued negative impact on revenues and gross margin in coming quarters due to inventory actions and repositioning.

• Leadership expects near-term revenue and margin pressure but is confident in long-term growth from innovation and marketplace reset.