Revenue Performance - NIKE, Inc. revenues for Q2 fiscal 2026 were $12.4 billion, a 1% increase compared to $12.35 billion in Q2 fiscal 2025[86]. - NIKE Brand wholesale revenues reached $7.5 billion in Q2 fiscal 2026, up from $6.9 billion in Q2 fiscal 2025, driven by growth in North America[86]. - NIKE, Inc. revenues for Q2 FY2026 were $12.4 billion, up 1% year-over-year, with North America contributing a 4 percentage point increase, while Greater China, Converse, and APLA reduced revenues by approximately 2, 1, and 1 percentage points respectively[97]. - NIKE Brand revenues for the first six months of FY2026 were $24.1 billion, up 1% on a reported basis, with North America contributing a 3 percentage point increase[97]. - Total revenues for the three months ended November 30, 2025, increased by 9% to $5,633 million compared to $5,179 million in the same period of 2024[114]. - North America revenues increased by 9% on a currency-neutral basis, with wholesale revenues up 24% driven by marketplace management actions and expanded distribution[118]. - Total revenues for Greater China decreased 16% on a currency-neutral basis, with NIKE Direct revenues down 18% due to a 36% decline in digital sales[125]. - Total revenues for Asia Pacific & Latin America (APLA) decreased 4% on a currency-neutral basis, with NIKE Direct revenues down 5%[131]. Profitability and Margins - Gross margin for Q2 fiscal 2026 was 40.6%, down 300 basis points from 43.6% in Q2 fiscal 2025, mainly due to higher tariffs in North America[86]. - Gross margin for Q2 FY2026 was 40.6%, a decrease of 300 basis points compared to the prior year, primarily due to higher product costs and lower average selling prices[98][99]. - Total Nike Brand EBIT margin decreased to 8.0% from 11.3% in the prior year, indicating a significant decline in profitability[113]. - Gross margin contracted by 330 basis points to 40.8%, primarily due to new tariffs and lower ASP, partially offset by reduced warehousing and logistics costs[114]. - Gross profit for the first six months of fiscal 2026 was $1,301 million, down 17% from $1,565 million in the same period of fiscal 2025[122]. - Gross margin contracted by 290 basis points, primarily due to lower average selling prices (ASP) and higher product costs[124]. Income and Expenses - Net income for Q2 fiscal 2026 was $792 million, a 32% decline from $1.16 billion in Q2 fiscal 2025[92]. - The effective tax rate for Q2 fiscal 2026 was 20.7%, compared to 17.9% in Q2 fiscal 2025[92]. - Demand creation expenses increased by 13% to $1.27 billion in Q2 fiscal 2026 compared to $1.12 billion in Q2 fiscal 2025[92]. - Demand creation expense increased 13% in Q2 FY2026, attributed to higher brand and sports marketing expenses[102]. - Other (income) expense, net decreased from $8 million of income to $16 million of expense in Q2 FY2026, primarily due to unfavorable foreign currency conversion changes[107]. - Total selling and administrative expenses increased by 3% in the first six months of fiscal 2026 compared to the same period in fiscal 2025[122]. - Corporate expenses for Nike, Inc. decreased by 10% to $(508) million, compared to $(565) million in the previous year[113]. Inventory and Cash Management - NIKE's inventories as of November 30, 2025, were $7.7 billion, a 3% increase from $7.5 billion as of May 31, 2025[86]. - Cash provided by operations decreased by $642 million, primarily due to a $580 million decrease in net income and a $62 million decrease related to working capital changes[153]. - Cash used by investing activities decreased by $132 million, mainly driven by changes in short-term investments[154]. - Cash used by financing activities decreased by $1,893 million, primarily due to lower share repurchases[154]. - As of November 30, 2025, the company had cash and equivalents and short-term investments totaling $8.3 billion[160]. - The company believes existing cash and equivalents, short-term investments, and cash generated by operations will be sufficient to meet capital needs for the next twelve months[161]. Market and Segment Performance - NIKE Brand footwear revenues decreased 1% on a currency-neutral basis, with unit sales flat and lower average selling price reducing revenues by approximately 1 percentage point[97]. - NIKE Brand apparel revenues increased 4% on a currency-neutral basis, driven by a 4% increase in unit sales, while average selling price per unit remained flat[97]. - NIKE Direct revenues decreased to $4.6 billion in Q2 fiscal 2026 from $5.0 billion in Q2 fiscal 2025, primarily due to reduced traffic in NIKE Brand Digital[86]. - NIKE Direct revenues were $4.6 billion for Q2 FY2026, down 8% on a reported basis, primarily due to a 14% decline in NIKE Brand Digital sales and a 3% decline in NIKE store sales[97]. - Footwear revenues rose by 9% on a currency-neutral basis, with unit sales increasing by 14%, although lower average selling price (ASP) per pair reduced revenues by approximately 5 percentage points[118]. - Converse revenues decreased 30% to $300 million in the three months ended November 30, 2025, compared to $429 million in the same period of 2024, with a 31% decrease on a currency-neutral basis[134]. - Direct to consumer revenues for Converse decreased 29% on a currency-neutral basis, reflecting reduced traffic in North America and Western Europe[135][141]. Corporate and Debt Information - The company’s long-term debt ratings are A+ and A2, with a downgrade from A1 to A2 by Moody's Investor Services in November 2025[157]. - The company has a $3 billion commercial paper program, with no borrowings outstanding as of November 30, 2025[158]. - As of November 30, 2025, the company had no off-balance sheet arrangements that could materially affect financial condition[163].

Company Overview - Nike has faced challenges in rebuilding investor trust after disappointing quarterly performances, with shares down over 26% from their 52-week high [1] - The company operates a mixed business model, selling through wholesale partners and direct-to-consumer channels, including digital platforms [5] Recent Developments - Apple CEO Tim Cook, who has been Nike's lead independent director since 2016, purchased 50,000 Class B shares at an average price of $58.97, totaling $2.95 million, nearly doubling his stake to approximately 105,000 shares [2] - Following Cook's purchase, Nike's stock reacted positively, jumping between 2% and 5% in premarket and early regular-session trading [3] Market Context - The global footwear market is projected to generate around $500 billion in revenue in 2025, with an annual growth rate of 5.52% through 2030, indicating a demand for shoes despite Nike's execution issues [3] Financial Performance - Over the past 52 weeks, Nike's shares have slipped 19%, with a 13% decline in the past three months, although there has been a recent uptick of 6% in the last five trading days [5] - Nike currently trades at a forward P/E of 38.16x, significantly higher than the consumer discretionary sector average of 17.83x, suggesting the market views Nike as a higher-quality stock with stronger long-term potential [6] - The company has a consistent dividend yield of 1.61%, with the most recent dividend being $0.41 per share, and has raised its payout for 23 consecutive years, although a high forward payout ratio of 93.69% indicates limited room for significant increases [6]

Leadership Changes - Nike appointed Aaron Cain as the new CEO of Converse, succeeding Jared Carver, who left after two years. Cain is a 21-year veteran of Nike and will address Converse's underperformance in revenue contribution [1] - Arthur Hoeld replaced Arne Freundt as CEO of Puma amid slowing sales, with a strategy focused on reducing reliance on wholesale and expanding direct-to-consumer channels [2][3] - Mary Dillon and Franklin Bracken exited Foot Locker following its $2.4 billion acquisition by Dick's Sporting Goods, with Ed Stack leading the company alongside two new presidents [9] CEO Turnover Trends - The retail industry has seen 43 CEO exits in 2025, a 34 percent increase from the previous year, while the consumer products industry recorded 56 CEO exits, down 19 percent [4] - Overall CEO turnover in U.S. companies has decreased by 3.5 percent in 2025, with 1,760 CEOs leaving their positions as of October [5] Financial Performance - Converse reported revenues of $300 million in the fiscal second quarter, a decline of 30 percent year-over-year, attributed to decreases across all territories [7] - Boot Barn's net sales increased by 18.7 percent year-over-year to $505.4 million in its fiscal second quarter, with plans to expand from 500 to 1,200 locations [21] - The Athlete's Foot experienced a 45 percent increase in regional revenue, contributing $272.1 million to its overall performance in 2024 [23]

Investment Rating - The industry rating is "Buy" [5] Core Insights - In Q3 2025, the overall revenue growth of overseas sports footwear and apparel companies slightly declined compared to Q2 2025, with a mixed performance in gross margins and an increase in most companies' SG&A expenses [5][12] - Brands focusing on niche segments like running and outdoor activities, such as ANTA, ASICS, and Deckers Outdoor, maintained high revenue growth rates, with ANTA growing by 34.5%, ASICS by 20.4%, and Deckers by 8.3% [12][13] - Most overseas sports footwear and apparel companies continued to show positive revenue growth, with notable performances from Skechers [12] - Revenue growth rates varied by region, with North America, Europe, and Greater China showing different trends; Europe had the best performance in Q3 2025 [5][20] - The apparel category showed stronger resilience in sales compared to footwear in Q3 2025 [5][25] Summary by Sections Section 1: Revenue Growth and Margin Performance - In Q3 2025, the revenue growth of overseas sports footwear companies decreased slightly compared to Q2 2025, with most companies experiencing an increase in SG&A expenses [5][12] - The revenue growth rates for major brands in Q3 2025 included Adidas at 8%, Lululemon at 7.1%, and ASICS at 20.4% [13][18] Section 2: Inventory Levels - Most overseas sports footwear companies saw an increase in inventory turnover ratios in Q3 2025, but overall inventory levels remained manageable [5][12] Section 3: Revenue Guidance for Fiscal Year 2025 - Compared to 2024, many companies have lowered their revenue growth guidance for the current fiscal year, although brands like Adidas, ANTA, and Lululemon have raised their full-year guidance for 2025 [5][18] Section 4: Investment Recommendations - Despite the slight decline in revenue growth and rising inventory turnover ratios, the long-term outlook for the sports footwear industry remains positive, driven by upcoming major sporting events and a recovery in order placements [5][18]

Core Insights - NIKE Inc. is implementing a "Sport Offense" strategy to reset momentum after facing uneven demand and channel imbalances, focusing on sport-led, athlete-driven innovation [1][8] - The strategy aims to enhance product creation and storytelling by aligning more closely with key sports, cities, and athletes, thereby rebuilding brand heat and restoring premium positioning [1][2] Performance and Growth - Early indicators show that the Sport Offense strategy is gaining traction in North America, particularly in performance categories like Running and Basketball, which are driving growth [2][8] - The approach emphasizes faster innovation cycles, clearer segmentation by sport and price point, and tighter collaboration with wholesale partners, leading to improved sell-through and reduced reliance on promotions [2] Market Challenges - Execution risks persist, especially in international markets like Greater China, where NIKE is working to reassert its premium identity in a competitive environment [3] - EMEA and APLA regions are still in the early stages of adopting the Sport Offense framework, suggesting that results may be inconsistent in the short term [3] Competitive Landscape - Key competitors include adidas AG and lululemon athletica inc., both of which are also focusing on performance-led categories to regain growth and brand momentum [4][5][6] - adidas is concentrating on core sports and reducing discount dependency, while lululemon is expanding its market through technical innovation and community engagement [5][6] Financial Metrics - NIKE shares have decreased by 12.6% over the past three months, compared to an 11.4% decline in the industry [7] - The forward 12-month price-to-earnings ratio for NIKE is 29.31X, higher than the industry average of 26.36X [9] - The Zacks Consensus Estimate indicates a year-over-year earnings decline of 27.3% for fiscal 2026, followed by a projected growth of 55.5% for fiscal 2027 [10]

Core Viewpoint - Nike Inc (NYSE: NKE) received a notable endorsement with Apple CEO Tim Cook purchasing approximately $3.0 million worth of its stock, indicating potential confidence in the company's future performance [1] Company Summary - Tim Cook's investment in Nike reflects a significant vote of confidence from a high-profile executive in the tech industry [1] - The purchase amounting to $3.0 million suggests a strategic interest in Nike's market position and growth potential [1] Industry Summary - The endorsement from a leading figure in the technology sector may influence investor sentiment towards Nike and the broader athletic apparel market [1] - This event highlights the intersection of technology and retail, showcasing how investments from tech leaders can impact traditional consumer goods companies [1]

Group 1 - SoftBank Group will acquire DigitalBridge Group for $4 billion to enhance its AI-related portfolio and expand its digital infrastructure exposure [1][2] - DigitalBridge focuses on digital infrastructure sectors, including datacenters, cell towers, fiber networks, and edge infrastructure, managing approximately $108 billion in assets as of September 30 [2][3] - The acquisition aligns with SoftBank's strategy to capitalize on the increasing demand for computing capacity essential for AI applications [2][4] Group 2 - SoftBank is investing significantly in AI, participating in the Stargate project alongside OpenAI, Oracle, and MGX, which aims to support advanced AI development [4] - The Stargate project includes plans to build five new computing sites across Texas, New Mexico, and Ohio, with a combined power capacity of about 7GW [5]

Market Overview - The Dow Jones Industrial Average decreased by 20.23 points (-0.0415%), closing at 48710.97, while Dow Futures indicated a weaker outlook, down 97.00 points (-0.1980%) at 48901.00, reflecting mixed market sentiment without significant economic data or policy announcements driving movement [1] Gainers - Nike (NKE) led the advancers with a share price increase of 1.55% - UnitedHealth Group (UNH) rose by 1.17% - 3M Company (MMM) added 1.09% - Nvidia (NVDA) increased by 0.78% - Home Depot (HD) saw a rise of 0.68%, indicating strength across consumer and industrial sectors [2] Decliners - Boeing (BA) was among the biggest decliners, down 0.90% - McDonald's (MCD) experienced a decline of 0.85% - Walt Disney Company (DIS) fell by 0.80% - Goldman Sachs (GS) and JPMorgan Chase (JPM) saw modest declines of -0.41% and -0.40% respectively, contributing to the overall subdued performance of the index [3]

Core Insights - Apple CEO Tim Cook recently purchased 50,000 shares of Nike at an average price of $58.97, totaling nearly $3 million, which nearly doubles his stake in the company [4] - Nike has faced significant challenges, including a 19% stock decline this year and over 57% in the past five years, attributed to rising competition, price-sensitive consumers, and macroeconomic factors [1][2] - The company acknowledged strategic mistakes, such as overemphasis on online promotions and lack of product innovation, but is currently undergoing a turnaround plan [2][8] Financial Performance - Nike reported earnings of $0.53 per share on revenue of $12.4 billion for Q2 of fiscal year 2026, exceeding Wall Street estimates [6] - Despite strong earnings, the stock price fell due to disappointing guidance, particularly regarding performance in China, a key market for Nike [6][7] - Nike is guiding for low single-digit percentage revenue decline in Q3, with ongoing challenges in Greater China and the Converse brand [7][8] Strategic Challenges and Initiatives - Nike's turnaround plan focuses on a renewed emphasis on athletes, brand identity, and product innovation, with some positive traction noted in North America [8] - The company faces significant challenges in China, needing to better connect with consumers and efficiently reach them [9] - Investors are advised to be patient as the turnaround may take time, but the presence of notable investors like Tim Cook may instill confidence [10]

Core Viewpoint - NIKE, Inc. is considered one of the best quality stocks to buy before 2026, despite a share price decline of over 10.8% following its fiscal Q2 2026 earnings release, with a positive analyst consensus indicating a potential upside of more than 31% from current levels [1][2]. Financial Performance - NIKE, Inc. reported a revenue growth of 0.59% year-over-year, reaching $12.43 billion, which exceeded estimates by $218.31 million. The earnings per share (EPS) of $0.53 also surpassed expectations by $0.16 [2]. - The company's gross profit margins declined by 300 basis points, and sales in China fell by 17%, contributing to a negative investor sentiment [2]. Analyst Ratings and Price Targets - Following the earnings release, analysts from Citi and UBS reiterated a Hold rating on NIKE, Inc., with both lowering their price targets from $70 to $65 and from $71 to $65, respectively [3]. - Analyst Jay Sole from UBS noted that the company's turnaround is taking longer than anticipated, suggesting a need for more time to resize inventory [4]. Future Outlook - Despite current challenges, NIKE, Inc. is expected to achieve mid-single-digit percentage sales growth and approximately 10% EBIT margin over the long term [4].