NIKE Reports 9% Revenue Decline to $11.3 Billion in Q3 Fiscal 2025

NIKE, Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with revenues totaling $11.3 billion, down 9% from $12.4 billion in the same period last year. The company's net income also fell by 32% to $794 million, compared to $1.172 billion in the prior year. For the first nine months of fiscal 2025, NIKE's revenues were $35.2 billion, a decrease of 9% from $38.8 billion in the previous year, while net income dropped 28% to $3.008 billion from $4.2 billion.

The decline in revenue was attributed to decreased sales across key markets, particularly in Greater China, Europe, Middle East & Africa (EMEA), and North America. NIKE Brand revenues, which account for over 90% of total revenues, decreased by 9% on a reported basis and 6% on a currency-neutral basis. The company noted that lower average selling prices and increased markdowns contributed to the revenue drop, particularly in the footwear segment, which saw a 12% decline in sales. Additionally, NIKE Direct revenues fell to $4.7 billion, down from $5.4 billion, reflecting a 10% decrease in digital sales.

Operationally, NIKE's gross margin decreased by 330 basis points to 41.5%, primarily due to lower average selling prices, higher inventory obsolescence reserves, and increased product costs. The company reported a total selling and administrative expense of $3.887 billion, down 8% from the previous year, with demand creation expenses rising by 8% as NIKE increased its investment in brand marketing and sports marketing to support key product launches.

In terms of strategic developments, NIKE has been focusing on reducing the supply of certain footwear products in the marketplace while shifting towards new and innovative products. The company is also repositioning its digital platform as a full-price channel and reinvesting in wholesale distribution. Despite the current challenges, NIKE remains optimistic about its long-term growth strategy, emphasizing the importance of building a complete product portfolio and enhancing consumer connections.

Looking ahead, NIKE anticipates that the actions taken to manage inventory and enhance brand positioning may negatively impact revenues and gross margins in the short term. However, the company believes these strategies will ultimately drive long-term shareholder value. As of February 28, 2025, NIKE's cash and equivalents stood at $8.601 billion, with total assets of $37.793 billion, reflecting a stable liquidity position to support ongoing operations and strategic initiatives.