Nike (NKE) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenues were $11.3B, down 9% year-over-year (7% currency-neutral), with declines across all geographies and channels.

• Net income for Q3 FY2025 was $794M, a 32% decrease compared to Q3 FY2024; diluted EPS was $0.54, down 30%.

• Gross margin for Q3 FY2025 declined 330 basis points to 41.5%, mainly due to higher discounts, inventory obsolescence, and product costs.

• Progress made on 'Win Now' strategic actions, focusing on culture, product portfolio, brand distinction, marketplace elevation, and local engagement.

• Actions to reduce supply and reposition the product portfolio led to increased markdowns and higher sales-related reserves, impacting revenue and margins.

Financial highlights

• NIKE Direct revenues declined 12% (10% currency-neutral); digital sales down 15%; wholesale revenues fell 7% (4% currency-neutral).

• Converse revenues dropped 18% (16% currency-neutral) to $405 million; EBIT margin was 7.3%, down from 10.9% year-over-year.

• Selling and administrative expense decreased 8% to $3.9B; demand creation expense rose 8% to $1.1B.

• Inventories as of February 28, 2025, were $7.5B, down 2% year-over-year but remain elevated.

• Cash and equivalents plus short-term investments totaled $10.4B at quarter-end.

Outlook and guidance

• Q4 revenues expected to decline in the mid-teens, with gross margins down 400–500 basis points.

• Management expects near-term revenue and gross margin pressure due to continued inventory liquidation, higher discounts, and investment in demand creation.

• Q4 to reflect the largest impact from Win Now actions; headwinds to revenue and margin expected to moderate thereafter.

• SG&A for Q4 projected up low to mid-single digits; full-year tax rate expected in the mid-teens.

• Continued inventory liquidation and promotional activity to persist into the first half of fiscal 2026.