US' Nike FY25 revenue falls 10%, net income drops 44%

Nike direct revenues fell 13 per cent to $18.8 billion, driven by a 20 per cent drop in digital sales, while Nike-owned store sales remained flat. Wholesale revenues fell 7 per cent to $25.9 billion. Converse revenues dropped 19 per cent to $1.7 billion.

The gross margin declined 190 basis points (bps) to 42.7 per cent, impacted by higher discounts, changes in channel mix, and inventory obsolescence reserves. Selling and administrative expenses decreased 3 per cent to $16.1 billion, with demand creation expense rising 9 per cent to $4.7 billion and operating overhead falling 7 per cent to $11.4 billion.

The effective tax rate rose to 17.1 per cent from 14.9 per cent in the prior year. Net income declined 44 per cent to $3.2 billion, with diluted earnings per share (EPS) at $2.16, down 42 per cent.

Inventories stood at $7.5 billion (flat year-on-year) as of May 31, 2025, and cash and short-term investments totalled $9.2 billion, down $2.4 billion, mainly due to share repurchases, dividends, bond repayments, and capital expenditures.

“While our financial results are in-line with our expectations, they are not where we want them to be. Moving forward, we expect our business to improve as a result of the progress we're making through our Win Now actions,” said Elliott Hill, president and chief executive officer (CEO) at Nike. “As we enter a new fiscal year, we are turning the page, and the next step is aligning our teams to lead with sport through what we are calling the sport offense. This will accelerate our Win Now actions to reposition our business for future growth.”

The sport offense realignment will focus on driving distinction within key sports, building a complete product portfolio, creating stories to inspire and connect with consumers, and elevating and growing the entire marketplace, Nike said in a press release.

In the fourth quarter (Q4) of FY25, revenues totalled $11.1 billion, down 12 per cent on a reported basis and 11 per cent on a currency-neutral basis. Nike Brand revenues dropped 11 per cent to $10.8 billion.

Meanwhile, Nike direct revenues fell 14 per cent to $4.4 billion in Q4, led by a 26 per cent decrease in Nike brand digital, partially offset by a 2 per cent rise in Nike-owned store sales.

The wholesale revenues were $6.4 billion, down 9 per cent, and converse revenues declined 26 per cent to $357 million. The gross margin fell 440 bps to 40.3 per cent due to higher discounting and unfavourable channel mix, added the release.

The selling and administrative expenses rose 1 per cent to $4.1 billion, with demand creation expenses increasing 15 per cent to $1.3 billion. The operating overhead fell 3 per cent to $2.9 billion. Net income plunged 86 per cent to $0.2 billion, with diluted EPS at $0.14.

“The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here. I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control and executing our Win Now actions,” said Matthew Friend, executive vice president and chief financial officer (CFO) at Nike.

ALCHEMPro News Desk (SG)