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; net income was $1.16B, a 26% decrease, and diluted EPS was $0.78, down 24%.

• Leadership is refocusing on sport, athlete-centric innovation, and empowering local teams to drive growth and brand relevance globally, while prioritizing long-term brand health over short-term results.

• Immediate actions include segmenting product teams, rebalancing digital and wholesale channels, investing in bold brand marketing, and executing multi-year enterprise initiatives including workforce reduction and inventory management.

• $1.6B was returned to shareholders in Q2 FY2025 via share repurchases and dividends, with 13.1 million shares repurchased in Q2.

• CEO transition to Elliott Hill and a global listening tour with partners, athletes, and teams to inform strategy.

Financial highlights

• Q2 FY2025 revenues: $12.4B (-8% YoY); gross margin: 43.6% (down 100 bps YoY) due to higher markdowns and channel mix; net income: $1.16B (-26% YoY); diluted EPS: $0.78 (down 24%).

• SG&A expenses decreased 3% to $4.0B; demand creation expense rose 1% while operating overhead fell 5%.

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

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

• Inventory was $8.0B as of Nov 30, 2024, flat year-over-year, with footwear inventory down and apparel/accessories up.

Outlook and guidance

• Q3 revenues expected to decline low double digits year-over-year, with gross margins down 300-350 basis points; management expects continued negative impact on revenues and gross margin in coming quarters due to inventory actions and repositioning.

• Strategic actions to reduce promotional activity and liquidate excess inventory will pressure near-term revenue and margins, with greater headwinds anticipated in Q4.

• Demand creation investment will increase, especially in sports and brand marketing, with a strategic focus on innovation, digital repositioning, and wholesale reinvestment.

• Management is accelerating portfolio shifts and brand momentum through sport under new CEO leadership.

• Forward-looking statements note risks and uncertainties that could cause actual results to differ materially.