US' Nike reaffirms H2 FY25 outlook despite 9% revenue dip in Q3

Meanwhile, the company generated a revenue of $11.3 billion in the third quarter (Q3) of FY25 ended February 28, 2025, down 9 per cent on a reported basis and 7 per cent on a currency-neutral basis year-over-year (YoY).

Nike Brand revenues stood at $10.9 billion, reflecting a 9 per cent decline reported and 6 per cent currency-neutral, with drops across all regions. Nike’s direct revenues fell 12 per cent reported and 10 per cent currency-neutral to $4.7 billion, primarily due to a 15 per cent decline in Nike Brand Digital and a 2 per cent decrease in Nike-owned store sales.

Wholesale revenues were $6.2 billion, down 7 per cent reported and 4 per cent currency neutral. Revenues for Converse were $405 million, down 18 per cent on a reported basis and down 16 per cent on a currency-neutral basis.

The gross margin of the company contracted 330 basis points (bps) to 41.5 per cent, impacted by increased discounts, inventory obsolescence, higher product costs, and changes in channel mix, partially offset by prior year restructuring charges, Nike said in a press statement.

The selling and administrative expenses declined 8 per cent to $3.9 billion. Demand creation expense rose 8 per cent to $1.1 billion due to higher brand marketing investment, while operating overhead dropped 13 per cent to $2.8 billion, largely due to $340 million in restructuring charges in the prior year and lower wage-related costs.

The net income for the quarter stood at $0.8 billion, down 32 per cent, while diluted earnings per share (EPS) declined 30 per cent to $0.54. Inventories totalled $7.5 billion, down 2 per cent YoY, reflecting shifts in product mix offset by increased units. The company’s gross margin declined by 330 bps to 41.5 per cent and diluted EPS stood at $0.54.

“The progress we made against the 'Win Now' strategic priorities we committed to 90 days ago reinforces my confidence that we are on the right path,” said Elliott Hill, president and chief executive officer (CEO), Nike, Inc. “What's encouraging is Nike made an impact this quarter leading with sport—through athlete storytelling, performance products and big sport moments.”

ALCHEMPro News Desk (SG)