NIKE, Inc. reported a significant decline in its financial performance for the fiscal year ending May 31, 2025, with total revenues of $46.3 billion, down 10% from $51.4 billion in the previous fiscal year. The company's net income also fell sharply to $3.2 billion, a 44% decrease compared to $5.7 billion in fiscal 2024. This decline was attributed to reduced consumer traffic across NIKE Direct operations and increased markdowns to manage inventory levels, which negatively impacted both revenues and gross margins. The gross margin decreased by 190 basis points to 42.7%, primarily due to higher discounts and changes in channel mix.
In terms of operational metrics, NIKE Direct revenues decreased by 13% to $18.8 billion, representing approximately 42% of total revenues. The wholesale segment also saw a decline, with revenues down 7% on a reported basis. The company’s inventory levels remained stable at $7.5 billion, flat compared to the previous year, indicating a strategic decision to manage inventory more effectively amidst declining sales. The total employee headcount as of May 31, 2025, was approximately 77,800, reflecting the company's ongoing commitment to maintaining a robust workforce.
Strategically, NIKE has focused on product management and marketplace management to address the challenges faced in fiscal 2025. The company is repositioning NIKE Brand Digital as a full-price platform while liquidating excess inventory through markdowns. Additionally, NIKE is increasing its investment in demand creation, including brand marketing and sports marketing, to support key product launches and enhance consumer engagement. The company aims to drive long-term shareholder value by creating innovative products and building deeper connections with consumers.
Looking ahead, NIKE anticipates continued challenges due to external factors such as geopolitical dynamics, fluctuating foreign exchange rates, and new tariffs, which are expected to negatively impact gross margins in fiscal 2026. Despite these challenges, the company remains committed to its strategic initiatives aimed at revitalizing brand momentum and enhancing its market position. The outlook suggests a cautious approach as NIKE navigates through a complex operating environment while striving for sustainable, profitable growth.
About NIKE, Inc.
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