Nike, Inc. reported financial results for its fiscal 2025 fourth quarter and full year ended May 31, producing a beat on both the top- and bottom-line consensus Wall Street estimates for the period. Still, many analysts appeared to be more interest in the fiscal 2026 full-year guidance and that did not come – at least in the initial release of Q4 and full year figures. More will come during the company quarterly conference call.

Fourth quarter Nike, Inc. revenues were $11.1 billion, down 12 percent year-over-year (y/y) on a reported basis and down 11 percent y/y on a currency-neutral basis. The Zacks Consensus Estimate for fiscal fourth-quarter revenues was pegged at $10.7 billion, suggesting a 15.4 percent decline from the year-ago fourth quarter’s reported figure, and the company clearly beat those expectations.

  • Nike Direct revenues for the fourth quarter were $4.4 billion, down 14 percent y/y in both reported and currency-neutral terms, reportedly due to a 26 percent decrease in Nike Brand Digital, partially offset by a 2 percent increase in Nike-Owned stores.
  • Wholesale revenues for the fourth quarter were $6.4 billion, down 9 percent y/y on a reported and currency-neutral basis.
  • Nike Brand revenues were $10.8 billion, down 11 percent y/y on a reported and currency-neutral basis, driven by declines across all geographies.
  • Converse revenues were $357 million, down 26 percent y/y on a reported and currency-neutral basis, due to declines across all territories.

Profitability & Expense Summary

  • Gross margin decreased 440 basis points to 40.3 percent of net sales, said to be primarily due to higher discounts and changes in channel mix.
  • Selling and administrative expense increased 1 percent to $4.1 billion.
    • Demand creation expense was $1.3 billion, up 15 percent y/y, primarily due to higher sports marketing expense and higher brand marketing expense.
    • Operating overhead expense decreased 3 percent y/y to $2.9 billion, primarily due to restructuring charges in the prior year, lower wage-related expenses and lower other administrative costs.
  • The effective tax rate for the fourth quarter was 33.6 percent, compared to 13.1 percent for the prior-year Q4 period, said to be primarily due to decreased benefits from stock-based compensation and one-time items that have an outsized impact on the tax rate because of lower pre-tax income in the quarter.
  • Net income was $0.2 billion, down 86 percent, and diluted earnings per share was 14 cents, a decrease of 86 percent y/y. The EPS consensus estimate for the quarter was 11 cents per share, compared to 99 cents in the comparable fiscal 2024 fourth quarter, another clear beat for the company.

“While our financial results are in-line with our expectations, they are not where we want them to be,” offered Elliott Hill, President & CEO, Nike, Inc. “Moving forward, we expect our business to improve as a result of the progress we’re making through our Win Now actions. 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.”

Nike said 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.

“The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here,” added company CFO and EVP Matthew Friend. “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.”

Fiscal 2025 Income Statement Summary

  • Revenues for Nike, Inc. were $46.3 billion, down 10 percent on a reported basis and down 9 percent on a currency-neutral basis.
    • Nike Brand revenues were $44.7 billion, down 9 percent on a reported and currency-neutral basis, driven by declines across all geographies.
    • Nike Direct revenues were $18.8 billion, down 13 percent on a reported basis and down 12 percent y/y on a currency-neutral basis, due to a 20 percent y/y decrease in Nike Brand Digital, while Nike-Owned stores were said to be flat.
    • Wholesale revenues were $25.9 billion, down 7 percent y/y on a reported basis and down 6 percent y/y on a currency-neutral basis.
    • Converse revenues were $1.7 billion, down 19 percent y/y on a reported basis and down 18 percent on a currency-neutral basis, due to declines across all territories.
  • Gross margin decreased 190 basis points y/y to 42.7 percent for the year, primarily due to higher discounts, changes in channel mix and higher inventory obsolescence reserves, partially offset by lower product costs.
  • Selling and administrative expense decreased 3 percent y/y to $16.1 billion.
    • Demand creation expense was $4.7 billion, up 9 percent y/y, said to be primarily due to higher brand marketing expense and higher sports marketing expense.
    • Operating overhead expense decreased 7 percent y/y to $11.4 billion, primarily due to restructuring charges in the prior year, lower wage-related expenses and lower other administrative costs.
  • The effective tax rate was 17.1 percent for the full year, compared to 14.9 percent for the prior year, said to be primarily due to changes in earnings mix, decreased benefits from stock-based compensation and non-recurring one-time benefits in the prior year, partially offset by a one-time, non-cash deferred tax benefit provided by US tax regulations related to foreign currency gains and losses.
  • Net income was $3.2 billion for fiscal 2025 ended May 31 – down 44 percent versus the prior year – and diluted earnings per share was $2.16, a decrease of 42 percent year-over-year.

Balance Sheet Summary

  • Nike, Inc. cash and equivalents and short-term investments were $9.2 billion at year-end, down approximately $2.4 billion from the prior year-end, as cash generated from operations was more than offset by share repurchases, cash dividends, bond repayment and capital expenditures.
  • Inventories for Nike, Inc. were $7.5 billion at fiscal year-end, flat compared to the prior year.

Shareholder Returns
Nike said it continues to have a strong track record of consistently increasing returns to shareholders, including 23 consecutive years of increasing dividend payouts.

In the fourth quarter, the Company returned approximately $0.8 billion to shareholders, including:

  • Dividends of $591 million, up 6 percent year-over-year.
  • Share repurchases of $202 million, reflecting 3.2 million shares retired as part of the four-year, $18 billion program approved by the Board of Directors in June 2022.

In fiscal 2025, the Company returned approximately $5.3 billion to shareholders, including:

  • Dividends of $2.3 billion, up 6 percent from prior year.
  • Share repurchases of $3.0 billion, reflecting 37.6 million shares retired as part of the four-year, $18 billion program approved by the Board of Directors in June 2022.

As of May 31, 2025, a total of 122.6 million shares have been repurchased under the current program for a total of approximately $12.0 billion.

Image courtesy Nike, Inc.

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See below for additional SGB Media coverage of Wall Street expectations for Nike latest quarter.

EXEC: Wall Street Remains Skeptical of Any Nike Recovery in Fiscal Q4