Core Insights - The WNBA All-Star Game highlighted the growing commercial value of female athletes, with players advocating for better compensation through a collective bargaining meeting and demonstrations during the event [1][9] - Major sports brands, particularly Nike, are increasingly investing in women's sports, recognizing the market potential and the influence of female athletes [4][5][6] - The WNBA is experiencing significant growth in viewership and revenue, with record media rights deals and expansion plans that could reshape the financial landscape of women's sports [8][9] Group 1: Player Advocacy and Brand Engagement - Players utilized the All-Star weekend to showcase their value, wearing protest shirts demanding fair compensation [1] - Nike and other brands launched exclusive shoe lines during the All-Star event, indicating a competitive marketing environment focused on female athletes [3][4] - The engagement of brands like Under Armour and Reebok further emphasizes the importance of female athletes in the sports marketing landscape [3][4] Group 2: Financial Growth and Market Potential - The WNBA is set to benefit from a record $2.2 billion media rights deal, significantly increasing revenue compared to previous agreements [8] - Expansion plans for the league, including the addition of three new teams, are expected to further enhance financial prospects, with expansion fees rising to $250 million [8] - The valuation of teams is increasing, with the Golden State Warriors' women's team now valued at $500 million, reflecting the growing market for women's sports [8] Group 3: Labor Relations and Compensation - Current labor agreements in the WNBA are under scrutiny, with players advocating for a higher revenue share compared to the current 9.3% [9] - The disparity in compensation between WNBA and NBA players is significant, with WNBA's minimum salary at $66,000 compared to NBA's first-year salary exceeding $1.3 million [9] - The involvement of over 40 players in recent negotiations indicates a strong push for better financial terms and conditions within the league [9]

[Part I](index=4&type=section&id=PART%20I) Part I provides a comprehensive overview of NIKE's business, covering its products, markets, manufacturing, competitive landscape, human capital, executive leadership, and associated risks [Business](index=4&type=section&id=ITEM%201.%20Business) NIKE, Inc. is the world's largest athletic footwear and apparel seller, focusing on innovation, direct consumer connections, and global market segmentation with outsourced manufacturing [General Overview](index=4&type=section&id=General) NIKE, Inc. designs, develops, and markets athletic products globally, utilizing both direct-to-consumer and wholesale channels with outsourced international manufacturing - NIKE's principal business is the design, development, and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories, and services, making it the **largest seller** in this category globally[11](index=11&type=chunk) - The company sells products through two main channels: **NIKE Direct** (owned retail stores and digital platforms) and **wholesale accounts**, which include distributors and licensees worldwide[11](index=11&type=chunk) - Nearly all of NIKE's footwear and apparel products are manufactured by **independent contractors** located outside the United States[11](index=11&type=chunk) [Products](index=4&type=section&id=Products) NIKE's product portfolio spans NIKE, Jordan, and Converse brands, driven by innovation and direct consumer connections for both athletic and leisure use - NIKE offers products under the **NIKE, Jordan, and Converse brands**, with a strategy focused on leading with sport, innovation, and direct consumer connections[13](index=13&type=chunk) - The **Jordan Brand** designs and distributes athletic and casual footwear, apparel, and accessories focused on sport performance and streetwear[17](index=17&type=chunk) - **Converse**, a wholly-owned subsidiary, designs and licenses casual sneakers, apparel, and accessories under trademarks like Chuck Taylor and All Star[18](index=18&type=chunk) [Sales and Marketing](index=5&type=section&id=Sales%20and%20Marketing) NIKE's sales exhibit moderate seasonality, with success dependent on adapting to consumer preferences and design trends through continuous product adjustment and marketing - Revenues historically show slight peaks in the **first and fourth fiscal quarters**, though product mix can vary significantly due to seasonal and geographic demand[21](index=21&type=chunk) - The company must actively respond to changing consumer preferences and trends by adjusting its product mix and leveraging marketing to influence sports and fitness activities[22](index=22&type=chunk) [Our Markets](index=5&type=section&id=Our%20Markets) NIKE operates across four NIKE Brand geographic segments and Converse, with U.S. sales at 43% and international sales at 57% of total fiscal 2025 revenues Revenue by Market (Fiscal 2025) | Market | Percentage of Total Revenues | | :--- | :--- | | U.S. Sales | 43% | | Non-U.S. Sales | 57% | Company-Operated Retail Stores | Region | Number of Stores | | :--- | :--- | | U.S. Total | 376 | | Non-U.S. Total | 658 | - For fiscal 2025, NIKE's three largest U.S. customers accounted for approximately **25% of U.S. sales**, while the three largest non-U.S. customers accounted for about **16% of total non-U.S. sales**[25](index=25&type=chunk)[28](index=28&type=chunk) - No single customer accounted for **10% or more of consolidated net revenues** in fiscal 2025[30](index=30&type=chunk) [Product Research, Design and Development](index=6&type=section&id=Product%20Research,%20Design%20and%20Development) NIKE prioritizes technical innovation in product research, design, and development to enhance athletic performance, collaborating with internal specialists and external experts - The company emphasizes **technical innovation** in design and manufacturing to create products that enhance performance, reduce injury, and maximize comfort[31](index=31&type=chunk) - NIKE utilizes internal specialists and external advisory boards of athletes, coaches, and experts to consult on product designs and materials[32](index=32&type=chunk) - Key product technologies include **Nike Air, Zoom, Free, Dri-FIT, Flyknit, FlyEase, ZoomX, Air Max, and React**[33](index=33&type=chunk) [Manufacturing](index=6&type=section&id=Manufacturing) NIKE primarily outsources footwear and apparel manufacturing to independent contractors outside the U.S., with key production in Vietnam, Indonesia, and China NIKE Brand Footwear Manufacturing by Country (FY 2025) | Country | Percentage of Total Production | | :--- | :--- | | Vietnam | 51% | | Indonesia | 28% | | China | 17% | NIKE Brand Apparel Manufacturing by Country (FY 2025) | Country | Percentage of Total Production | | :--- | :--- | | Vietnam | 31% | | China | 15% | | Cambodia | 15% | - As of May 31, 2025, manufacturing was conducted by independent contractors in **97 footwear factories** across 11 countries and **303 apparel factories** across 34 countries[35](index=35&type=chunk)[36](index=36&type=chunk) - **Four footwear contract manufacturers** accounted for approximately **59% of NIKE Brand footwear production** in fiscal 2025[35](index=35&type=chunk) [International Operations and Trade](index=7&type=section&id=International%20Operations%20and%20Trade) NIKE's international operations face risks from trade policies, tariffs, and political instability, leading to increased costs and potential supply disruptions, managed with a compliance program - International operations face risks from **foreign trade policies, import duties, quotas, political instability, and terrorism**[43](index=43&type=chunk) - Protectionist measures have increased product costs, and the company actively works with industry groups to mitigate these impacts[44](index=44&type=chunk) - The company is subject to the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-bribery laws, and maintains a **compliance program** to address these risks[48](index=48&type=chunk) [Competition](index=8&type=section&id=Competition) The athletic industry is highly competitive, with NIKE competing globally on product quality, innovation, brand strength, marketing, and efficient sourcing and distribution - NIKE faces intense global competition from numerous companies, including **adidas, Anta, ASICS, Deckers, Li Ning, lululemon athletica, New Balance, On, Puma, Under Armour, and V.F. Corporation**[49](index=49&type=chunk) - Key competitive areas include **product attributes** (quality, innovation, design), **consumer connection** (marketing, endorsements), and **effective sourcing and distribution**[56](index=56&type=chunk) [Trademarks and Patents](index=8&type=section&id=Trademarks%20and%20Patents) NIKE considers its intellectual property, especially the NIKE name and Swoosh Design, as valuable assets, actively protecting them globally through trademarks and patents - The **NIKE and Swoosh Design trademarks** are considered among the company's most valuable assets and are registered in over **190 jurisdictions**[51](index=51&type=chunk) - The company holds many U.S. and foreign **utility and design patents** protecting components, technologies, manufacturing techniques, and designs for its products[53](index=53&type=chunk) [Human Capital Resources](index=9&type=section&id=Human%20Capital%20Resources) As of May 31, 2025, NIKE employed approximately 77,800 people globally, emphasizing a diverse, inclusive culture with competitive compensation and comprehensive benefits - As of May 31, 2025, NIKE had approximately **77,800 employees worldwide**, including retail and part-time staff[62](index=62&type=chunk) - The company is committed to a **diverse and inclusive culture**, supported by employee resource groups (NikeUNITED) and inclusive leadership training[59](index=59&type=chunk) - NIKE provides a comprehensive rewards package including **competitive pay, bonus plans, family care benefits, mental health support, and a hybrid work model**[64](index=64&type=chunk)[67](index=67&type=chunk) [Information about our Executive Officers](index=11&type=section&id=Information%20about%20our%20Executive%20Officers) This section provides biographical information for NIKE, Inc.'s executive officers as of July 17, 2025, including key leadership roles and functional responsibilities - **Mark Parker** serves as Executive Chairman, having previously been CEO from 2006 to 2020[68](index=68&type=chunk) - **Elliott Hill** became President and Chief Executive Officer in October 2024, having been with NIKE since 1988[68](index=68&type=chunk) - **Matthew Friend** has served as Executive Vice President and Chief Financial Officer since 2020[68](index=68&type=chunk) [Risk Factors](index=13&type=section&id=ITEM%201A.%20Risk%20Factors) This section outlines significant risks to NIKE's business, categorized into economic, operational, global business, legal, and financial factors, which could adversely affect performance [Economic and Industry Risks](index=14&type=section&id=Economic%20and%20Industry%20Risks) NIKE faces economic and industry risks including global volatility, intense competition, currency fluctuations, climate change, and public health emergencies impacting consumer spending and operations - Volatile global economic conditions, including **inflation and interest rates**, could reduce consumer discretionary spending, leading to lower demand, higher inventories, and reduced revenues[73](index=73&type=chunk)[76](index=76&type=chunk) - The company faces **intense competition** from a significant number of companies, which requires continuous innovation, effective marketing, and competitive pricing to maintain market share[74](index=74&type=chunk)[75](index=75&type=chunk) - A majority of products are manufactured and sold outside the U.S., exposing the company to **currency exchange rate volatility**, which can adversely affect reported revenues and earnings[77](index=77&type=chunk) - Climate change and extreme weather events pose **physical risks** to operations, supply chains, and retail traffic, while evolving stakeholder expectations on sustainability could increase costs and reputational risk[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) [Business and Operational Risks](index=17&type=section&id=Business%20and%20Operational%20Risks) NIKE's operational risks include brand reputation damage, failure to anticipate consumer trends, reliance on technology and concentrated manufacturing, and challenges with NIKE Direct investments - Maintaining and enhancing brand image is critical and can be damaged by **negative publicity**, failure to adapt to changing media environments, or issues with endorsers or suppliers[89](index=89&type=chunk)[90](index=90&type=chunk) - Failure to anticipate consumer preferences and develop new products in a timely manner can lead to **lower sales, excess inventory, and reduced profits**[91](index=91&type=chunk)[93](index=93&type=chunk) - The **NIKE Direct strategy** requires substantial investment in retail stores and digital platforms, which may not yield a satisfactory return and is subject to risks like credit card fraud and supply chain mismanagement[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Heavy dependence on information technology for supply chain, retail, and financial operations creates vulnerability to **system failures, interruptions, and cyberattacks**, which could harm business operations[106](index=106&type=chunk) - The company relies on a **concentrated number of contract manufacturers** for footwear, and any disruption with a significant supplier could materially affect operations and sales[116](index=116&type=chunk) [Risks Related to Operating a Global Business](index=22&type=section&id=Risks%20Related%20to%20Operating%20a%20Global%20Business) NIKE's global operations face risks from political instability, changing trade policies, supply chain disruptions, and compliance with international anti-corruption laws - With nearly all manufacturing and a majority of sales occurring outside the U.S., the company is subject to risks from **foreign laws, political unrest, and economic instability**[123](index=123&type=chunk) - The business is exposed to risks from overseas sourcing, including **disruptions in the supply of raw materials, labor cost increases, and transportation delays**, which can impact product availability and profit margins[125](index=125&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Changes in U.S. or other countries' trade policies, including **tariffs and sanctions**, can require changes to business operations and adversely affect results[130](index=130&type=chunk)[131](index=131&type=chunk) - The company's ability to meet customer expectations depends on the proper operation of its **global distribution facilities**, which are vulnerable to disruptions from IT problems, disasters, or disease outbreaks[136](index=136&type=chunk) [Legal, Regulatory, and Compliance Risks](index=24&type=section&id=Legal,%20Regulatory,%20and%20Compliance%20Risks) NIKE faces legal and compliance risks globally, including intellectual property protection, data privacy, changing tax laws, and ensuring supplier adherence to codes of conduct - The company is subject to extensive laws and regulations worldwide, and failure to comply could result in **fines, sanctions, or reputational damage**[137](index=137&type=chunk) - Failure to adequately protect or enforce **intellectual property rights** against counterfeiting and infringement could adversely affect sales and brand value[138](index=138&type=chunk) - The company handles sensitive personal data and is subject to complex **data privacy regulations** (e.g., GDPR); a data breach could lead to fines, lawsuits, and reputational harm[145](index=145&type=chunk)[146](index=146&type=chunk) - Earning a substantial portion of income in foreign countries exposes NIKE to **changes in tax laws**, new regulations (such as OECD's Pillar Two), and potential tax liabilities from audits[147](index=147&type=chunk)[148](index=148&type=chunk) [Risks Related to Our Securities, Investments and Liquidity](index=26&type=section&id=Risks%20Related%20to%20Our%20Securities,%20Investments%20and%20Liquidity) NIKE's financial risks include potential for failed investments, stock price volatility from large share sales, increased borrowing costs from credit rating changes, and ineffective internal controls - Substantial investments in new businesses, technology, or operations like NIKE Direct are subject to risks and may not produce expected returns[153](index=153&type=chunk) - A negative change to the company's credit rating, such as the **July 2025 downgrade by Standard & Poor's**, increases borrowing costs and may limit financing options[156](index=156&type=chunk) - Failure to maintain effective internal controls over financial reporting could harm operating results and the ability to meet reporting obligations[157](index=157&type=chunk) - Failure to meet the financial estimates or expectations of securities analysts and investors has caused the **stock price to decline** in the past and could do so again[160](index=160&type=chunk) [Unresolved Staff Comments](index=28&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[161](index=161&type=chunk) [Cybersecurity](index=28&type=section&id=ITEM%201C.%20Cybersecurity) NIKE's cybersecurity risk management, guided by the NIST framework, is overseen by management and the Board, including risk assessments, vulnerability management, and incident response - Cybersecurity risk management is overseen at the management level by the **VP, Corporate Information Security, Risk & Compliance**, and at the board level by the Board of Directors, with delegated oversight to the **Audit & Finance Committee**[163](index=163&type=chunk)[167](index=167&type=chunk) - The company's approach is guided by the **NIST Cybersecurity Framework** and includes tools like risk assessments, penetration testing, and a third-party cyber risk management program[164](index=164&type=chunk) - An incident response plan is in place to manage cybersecurity events, and its effectiveness is routinely tested. Employees receive annual mandatory cybersecurity training[166](index=166&type=chunk) [Properties](index=29&type=section&id=ITEM%202.%20Properties) NIKE's properties include its Oregon World Headquarters, leased regional HQs, a global distribution network, Air-Sole manufacturing facilities, and 1,029 leased retail stores worldwide - The **NIKE World Headquarters** is an owned **400-acre site** near Beaverton, Oregon, with over 40 buildings[170](index=170&type=chunk) - In the U.S., NIKE has **eight significant distribution centers**, five of which are near Memphis, Tennessee. The most significant international distribution facilities are owned and located in Belgium, China, Japan, and Korea[171](index=171&type=chunk) - The company leases approximately **1,029 retail stores worldwide**, with leases expiring at various dates through fiscal year 2058[173](index=173&type=chunk) [Legal Proceedings](index=29&type=section&id=ITEM%203.%20Legal%20Proceedings) The company reports no material pending legal proceedings beyond ordinary routine litigation incidental to its business - Other than ordinary routine litigation, the company reports **no material pending legal proceedings**[174](index=174&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[175](index=175&type=chunk) [Part II](index=30&type=section&id=PART%20II) Part II provides detailed financial information, including stock market data, share repurchases, MD&A of fiscal 2025 results, market risk disclosures, and consolidated financial statements with internal control reports [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) NIKE's Class B Common Stock trades on NYSE, with an ongoing $18 billion share repurchase program, having repurchased $12.0 billion as of May 31, 2025 - The Board of Directors approved a four-year, **$18 billion share repurchase program** in June 2022. As of May 31, 2025, approximately **$12.0 billion** has been spent to repurchase **122.6 million shares**[178](index=178&type=chunk) Share Repurchases for Quarter Ended May 31, 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares Remaining for Purchase (in millions) | | :--- | :--- | :--- | :--- | | March 1 – March 31, 2025 | 936,074 | $72.39 | $6,124 | | April 1 – April 30, 2025 | 1,189,613 | $56.01 | $6,058 | | May 1 – May 31, 2025 | 1,116,872 | $60.77 | $5,990 | | **Total** | **3,242,559** | **$62.38** | **$5,990** | [RESERVED](index=32&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 saw NIKE's revenues decrease 10% to $46.3 billion and net income fall 44% to $3.2 billion, driven by NIKE Direct traffic decline and increased markdowns [Overview and Fiscal 2025 Financial Highlights](index=33&type=section&id=OVERVIEW) Fiscal 2025 results show a 10% revenue decrease to $46.3 billion and a 190 basis point gross margin decline, impacted by reduced NIKE Direct traffic and increased markdowns Fiscal 2025 Financial Highlights | Metric | Fiscal 2025 | Fiscal 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $46.3 billion | $51.4 billion | -10% | | NIKE Direct Revenues | $18.8 billion | $21.5 billion | -13% | | Gross Margin | 42.7% | 44.6% | -190 bps | | Inventories | $7.5 billion | $7.5 billion | Flat | | Shareholder Returns | $5.3 billion | - | - | - The company is navigating external factors like geopolitical dynamics and new tariffs, which are expected to negatively impact gross margin in fiscal 2026[191](index=191&type=chunk) - Strategic actions include reducing supply of certain footwear, repositioning NIKE Brand Digital as a full-price platform, reinvesting in wholesale, and increasing brand marketing investment[196](index=196&type=chunk) [Results of Operations](index=36&type=section&id=RESULTS%20OF%20OPERATIONS) For fiscal 2025, revenues decreased 10% to $46.3 billion, with gross margin contracting 190 basis points, leading to a 44% net income decline to $3.2 billion Consolidated Operating Results (FY2025 vs FY2024) | (in millions) | Fiscal 2025 | Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $46,309 | $51,362 | -10% | | Gross Profit | $19,790 | $22,887 | -14% | | Gross Margin | 42.7% | 44.6% | -190 bps | | Total S&A Expense | $16,088 | $16,576 | -3% | | Income Before Taxes | $3,885 | $6,700 | -42% | | Net Income | $3,219 | $5,700 | -44% | | Diluted EPS | $2.16 | $3.73 | -42% | - On a currency-neutral basis, NIKE Brand footwear revenues decreased **11%**, driven by an **8% decrease in unit sales** and a **3 percentage point reduction from lower average selling prices (ASP)**[210](index=210&type=chunk) - **NIKE Direct revenues decreased 13% to $18.8 billion**, reflecting a **20% decline in digital sales**, while NIKE store sales were flat[210](index=210&type=chunk) - The **190 basis point gross margin decline** was primarily driven by lower NIKE Brand ASP (approx. **-180 bps**) and higher other costs including inventory obsolescence reserves (approx. **-90 bps**), partially offset by lower product costs (approx. **+80 bps**)[211](index=211&type=chunk)[215](index=215&type=chunk) [Segment Information](index=41&type=section&id=SEGMENT%20INFORMATION) In fiscal 2025, all NIKE Brand geographic segments and Converse experienced revenue and EBIT declines due to lower sales volumes and gross margin pressure Revenues by Segment (FY2025 vs FY2024) | Segment (in millions) | FY2025 Revenues | FY2024 Revenues | % Change | | :--- | :--- | :--- | :--- | | North America | $19,572 | $21,396 | -9% | | EMEA | $12,257 | $13,607 | -10% | | Greater China | $6,586 | $7,545 | -13% | | APLA | $6,251 | $6,729 | -7% | | Converse | $1,692 | $2,082 | -19% | EBIT by Segment (FY2025 vs FY2024) | Segment (in millions) | FY2025 EBIT | FY2024 EBIT | % Change | | :--- | :--- | :--- | :--- | | North America | $4,735 | $5,822 | -19% | | EMEA | $2,575 | $3,388 | -24% | | Greater China | $1,602 | $2,309 | -31% | | APLA | $1,527 | $1,885 | -19% | | Converse | $240 | $474 | -49% | [Foreign Currency Exposures and Hedging Practices](index=48&type=section&id=FOREIGN%20CURRENCY%20EXPOSURES%20AND%20HEDGING%20PRACTICES) NIKE manages foreign currency risks from transactions and translation through a centralized hedging program using derivatives, which had an unfavorable $188 million impact on fiscal 2025 pre-tax income - The company's foreign exchange risk management program is designed to lessen the effects of currency fluctuations on results by using natural offsets and hedging with derivatives[248](index=248&type=chunk) - Significant transactional exposures arise from product purchases denominated in currencies other than the functional currency of the purchasing entity and from non-functional currency denominated sales[251](index=251&type=chunk)[252](index=252&type=chunk) - For FY2025, the combination of translating foreign currency profits and the change in foreign currency gains/losses had an estimated **unfavorable impact of $188 million on Income before income taxes**[258](index=258&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) NIKE's liquidity remains solid despite a $3.7 billion decrease in operating cash flow in fiscal 2025, with access to $3 billion in credit facilities and significant future commitments Cash Flow Activity (FY2025 vs FY2024) | (in millions) | Fiscal 2025 | Fiscal 2024 | $ Change | | :--- | :--- | :--- | :--- | | Cash from Operating Activities | $3,698 | $7,429 | ($3,731) | | Cash from Investing Activities | ($275) | $894 | ($1,169) | | Cash from Financing Activities | ($5,820) | ($5,888) | $68 | - In July 2025, Standard and Poor's downgraded the company's debt rating from **AA- to A+**, which will increase facility fees and interest rates on its credit facilities[266](index=266&type=chunk) - As of May 31, 2025, material cash requirements included **$16.2 billion in endorsement contracts** and **$7.9 billion in product purchase obligations**[275](index=275&type=chunk) - The company repurchased **37.6 million shares for $3.0 billion** in fiscal 2025 and intends to continue moderating share repurchases[262](index=262&type=chunk) [Critical Accounting Estimates](index=52&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) NIKE's critical accounting estimates involve significant judgment for sales reserves, inventory valuation, hedge accounting effectiveness, and income tax provision determination - Sales-related reserves for returns and discounts are estimated based on historical rates, specific identification, and current marketplace needs[282](index=282&type=chunk) - Inventory reserves are established to account for the difference between inventory cost and its estimated net realizable value, based on assumptions about future demand and market conditions[284](index=284&type=chunk) - Hedge accounting requires that the notional value of derivative contracts does not exceed the amount of anticipated transactions, which are estimates and may fluctuate[287](index=287&type=chunk) - The income tax provision requires significant judgment in interpreting complex tax laws and estimating the annual effective tax rate and the sustainability of uncertain tax positions[289](index=289&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) NIKE manages foreign currency and interest rate market risks using derivatives, with foreign currency VaR at $107 million and $2.4 billion in interest rate swaps as of May 31, 2025 - The company uses financial instruments to manage exposure to foreign currency and interest rate fluctuations, not for speculative purposes[294](index=294&type=chunk) - The Value-at-Risk (VaR) for foreign currency sensitive derivatives was estimated at a maximum one-day loss of **$107 million** as of May 31, 2025, compared to **$57 million** as of May 31, 2024[301](index=301&type=chunk) Long-Term Debt and Interest Rate Swaps (as of May 31, 2025) | Instrument | Total Principal/Notional (in millions) | Fair Value (in millions) | | :--- | :--- | :--- | | Long-term U.S. Dollar debt — Fixed rate | $8,000 | $6,673 | | Interest Rate Swaps — Fixed to variable | $2,400 | $21 | [Financial Statements and Supplementary Data](index=56&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents NIKE's audited consolidated financial statements for fiscal 2025, including management's report on internal controls and the independent auditor's report [Management's Annual Report on Internal Control Over Financial Reporting](index=57&type=section&id=Management's%20Annual%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management concluded that NIKE's internal control over financial reporting was effective as of May 31, 2025, based on the COSO framework - Management concluded that the company's internal control over financial reporting was **effective as of May 31, 2025**[312](index=312&type=chunk) - The evaluation was based on the framework in **Internal Control — Integrated Framework (2013)** issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)[312](index=312&type=chunk) [Report of Independent Registered Public Accounting Firm](index=58&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on NIKE's financial statements and internal controls, identifying accounting for income taxes as a critical audit matter - The auditor, **PricewaterhouseCoopers LLP**, issued an **unqualified opinion** on both the consolidated financial statements and the effectiveness of internal control over financial reporting[316](index=316&type=chunk) - The accounting for income taxes was identified as a **critical audit matter** due to the significant management judgment and complexity involved[323](index=323&type=chunk)[325](index=325&type=chunk) [Consolidated Financial Statements](index=60&type=section&id=Consolidated%20Financial%20Statements) NIKE's fiscal 2025 consolidated financial statements show net income of $3.2 billion on $46.3 billion revenues, with total assets of $36.6 billion and a $2.4 billion net cash decrease Consolidated Statement of Income (Year Ended May 31) | (In millions) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Revenues | $46,309 | $51,362 | $51,217 | | Gross Profit | $19,790 | $22,887 | $22,292 | | Net Income | $3,219 | $5,700 | $5,070 | | Diluted EPS | $2.16 | $3.73 | $3.23 | Consolidated Balance Sheet (As of May 31) | (In millions) | 2025 | 2024 | | :--- | :--- | | Total Current Assets | $23,362 | $25,382 | | Total Assets | $36,579 | $38,110 | | Total Current Liabilities | $10,566 | $10,593 | | Total Liabilities | $23,366 | $23,680 | | Total Shareholders' Equity | $13,213 | $14,430 | Consolidated Statement of Cash Flows (Year Ended May 31) | (In millions) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Cash from Operations | $3,698 | $7,429 | $5,841 | | Cash from Investing | ($275) | $894 | $564 | | Cash from Financing | ($5,820) | ($5,888) | ($7,447) | | Net (Decrease) in Cash | ($2,396) | $2,419 | ($1,133) | [Notes to Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail NIKE's accounting policies and financial data, covering revenue recognition, debt, taxes, segment performance, hedging, and significant charges and claims [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=93&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in accountants or disagreements on accounting or financial disclosure matters - There has been **no change of accountants** nor any disagreements with accountants on accounting or financial disclosure matters[504](index=504&type=chunk) [Controls and Procedures](index=93&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded that NIKE's disclosure controls and procedures were effective as of May 31, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of May 31, 2025[506](index=506&type=chunk) - No material changes were made to the internal control over financial reporting during the most recent fiscal quarter[507](index=507&type=chunk) [Other Information](index=93&type=section&id=ITEM%209B.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the fiscal quarter ended May 31, 2025 - No directors or officers adopted or terminated a **Rule 10b5-1 trading arrangement** during the fourth quarter of fiscal 2025[508](index=508&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=93&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[509](index=509&type=chunk) [Part III](index=94&type=section&id=PART%20III) Part III incorporates by reference information from NIKE's 2025 Proxy Statement, covering directors, executive officers, compensation, security ownership, related transactions, and accountant fees [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, corporate governance, and related policies is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders[511](index=511&type=chunk) [Executive Compensation](index=94&type=section&id=ITEM%2011.%20Executive%20Compensation) Information regarding executive and director compensation and Compensation Committee matters is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders[512](index=512&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=94&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on equity compensation plans and security ownership by beneficial owners and management is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders[513](index=513&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=94&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders[514](index=514&type=chunk) [Principal Accountant Fees and Services](index=94&type=section&id=ITEM%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2025 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders[515](index=515&type=chunk) [Part IV](index=95&type=section&id=PART%20IV) Part IV lists exhibits and financial statement schedules filed with the Form 10-K, along with the report's certifying signatures from principal officers and directors [Exhibits and Financial Statement Schedules](index=95&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Annual Report, including financial statements, consents, corporate governance documents, and certifications - Lists all financial statements, exhibits, and schedules filed with the report. All financial statement schedules are omitted as the required information is shown elsewhere[517](index=517&type=chunk) [Form 10-K Summary](index=98&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) The company reports that no Form 10-K summary is provided - None[522](index=522&type=chunk) [Signatures](index=100&type=section&id=Signatures) The report is signed by the President and CEO, Principal Financial Officer, Principal Accounting Officer, and the majority of the Board of Directors on July 17, 2025 - The report is signed by **Elliott Hill** (President and CEO), **Matthew Friend** (EVP and CFO), **Johanna Nielsen** (VP, Chief Accounting Officer), and the Board of Directors on July 17, 2025[527](index=527&type=chunk)[528](index=528&type=chunk)

Core Insights - NIKE, Inc. is a leading global brand in athletic footwear, apparel, and sports equipment, with a presence in over 190 countries, leveraging branding, innovation, and athlete partnerships to maintain market dominance [1] Group 1: Company Overview - NIKE's international presence is a key growth driver, contributing to revenue diversification and mitigating geographic concentration risks amid economic volatility [2] - The company is currently facing challenges in its international division due to retail volatility, soft consumer demand, and structural cost pressures such as tariffs and unfavorable currency movements [2] - The holiday order book for fiscal 2026 shows year-over-year growth, particularly in North America, EMEA, and APLA, although this is partially offset by Greater China [3] Group 2: Strategic Initiatives - Despite near-term challenges, NIKE's strategic initiatives, including a responsive supply chain and "Win Now" tactics, aim to facilitate long-term recovery [4] - The company is focusing on product innovation and partner-led distribution improvements to regain momentum in the market [9] Group 3: Competitive Landscape - Key competitors include adidas AG and lululemon athletica inc., both of which are actively pursuing growth through product innovation and market expansion [5][6] - lululemon has reported a 19% year-over-year increase in international revenues for Q1 fiscal 2025, indicating strong global potential [7] Group 4: Financial Performance - NIKE shares have declined by 4.8% year-to-date, outperforming the industry decline of 7.8% [8] - The company trades at a forward price-to-earnings ratio of 39.93X, significantly higher than the industry average of 29.12X [10] - The Zacks Consensus Estimate indicates a projected earnings decline of 22.7% for fiscal 2025, followed by a growth forecast of 55% for fiscal 2026 [11]

汇丰：将耐克目标价格由80美元上调至88美元。 ...

标普下调耐克评级至A+（之前为AA-），前景展望稳定。 ...

智通财经7月16日电，标普将耐克评级从"AA-"下调至"A+"，展望稳定。 ...

Investment Rating - The report maintains a strong buy recommendation for key companies in the industry, including Jingyuan International, Shenzhou International, and Huali Group, based on their growth potential and market positioning [4][34]. Core Insights - The industry is experiencing a marginal improvement in revenue growth for leading manufacturers, with a positive outlook for NIKE as inventory and channel conditions improve, suggesting a potential for sequential sales growth [1][3]. - The U.S. retail market has shown signs of recovery, with a positive growth trend in terminal retail sales and stable inventory levels, while Southeast Asian textile exports remain robust [2][11]. - New product launches from major international brands in sports fashion and outdoor segments are expected to increase, with a focus on market feedback for these new offerings [15][17]. Summary by Sections Industry Prosperity Analysis - Demand Side: U.S. terminal retail sales have shown recovery in Q2 2025, with healthy inventory levels. Vietnam's textile exports increased by 16% year-on-year in June 2025, while footwear exports decreased by 3% [2][13]. - Industry Trends: Major international brands are gradually launching new products in July, with an emphasis on monitoring market responses [15]. Supply Chain Tracking - Brand Side: NIKE's revenue for FY25Q4 was $11.1 billion, down 12% year-on-year, but inventory clearance and channel expansion are progressing well, with expectations for sequential improvement in sales [3][17]. - Manufacturing Side: Revenue growth for leading manufacturers showed marginal improvement in June, with specific companies reporting varied performance, such as Yuyuan's manufacturing business up by 9.4% and Yuchi's outdoor footwear revenue up by 23% [24][29]. Investment Recommendations - Jingyuan International is recommended for its diverse product range and operational efficiency, with a current market valuation corresponding to a PE of 8.5X for 2025 [4][34]. - Shenzhou International is highlighted for its recovery in capacity utilization and production efficiency, with a market valuation corresponding to a PE of 12X for 2025 [4][34]. - Huali Group is noted for its optimized customer structure and ongoing capacity expansion, with a market valuation corresponding to a PE of 15X for 2025 [4][34].

Core Viewpoint - Nike's decline in the Chinese market is attributed to strategic misjudgments, loss of competitive focus, and the fading of market dividends, rather than merely "traffic fatigue" or a "promotional environment" [22] Group 1: Financial Performance - Nike's revenue for the fiscal year 2025 was $46.3 billion, a 10% year-over-year decline [1] - Revenue from the Greater China region was $6.586 billion, down 13% year-over-year, equating to a loss of approximately $959 million [1][2] - Overall net profit decreased by 44% to $3.2 billion [2] Group 2: Market Competition - Local brands such as Anta, Li Ning, and Xtep are experiencing strong growth, with Anta leading the industry with over 100 billion RMB in revenue [7] - Emerging brands like On and HOKA are also gaining market share, further challenging Nike's dominance [7] - Local brands have demonstrated effective market positioning, with Xtep focusing on the running segment through acquisitions [8] Group 3: Pricing and Consumer Preferences - Local brands offer comparable quality at lower prices, making them more appealing to consumers who prioritize value [10] - The shift in consumer sentiment has led to a decline in loyalty towards international brands like Nike, especially among younger consumers [23] Group 4: Product Strategy and Quality Issues - Nike's production shift to Vietnam has resulted in quality complaints from consumers, impacting brand perception [12][21] - The lengthy product development cycle due to supply chain inefficiencies has hindered Nike's responsiveness to market trends [21] Group 5: Marketing and Brand Engagement - Nike's marketing strategy relies heavily on top-tier athletes, which may not resonate with younger consumers who prefer relatable influencers [24] - The brand has been slow to engage in popular platforms like Douyin, missing opportunities to connect with the youth market [47] Group 6: Strategic Changes and Future Outlook - Nike's "Win Now" strategy aims to address current challenges, including leadership changes and a focus on local market needs [42][44] - The strategy includes simplifying product lines and increasing promotional activities to clear inventory and attract consumers [52][56] - Future success will depend on Nike's ability to understand and respond to local consumer demands more effectively than competitors [56]

Investment Rating - The report maintains a "Weaker than Market" investment rating for the U.S. stock market [1] Core Insights - The U.S. stock market experienced narrow fluctuations with most sectors declining, as the S&P 500 fell by 0.3% and the Nasdaq by 0.1% [3] - There were 8 sectors that increased while 16 sectors decreased, with notable gains in Energy (+2.6%), Semiconductor Products and Equipment (+2.4%), and Transportation (+1.2%) [3] - Conversely, sectors that saw significant declines included Telecommunications (-4.8%), Insurance (-2.6%), and Banks (-2.5%) [3] Summary by Sections Market Overview - The S&P 500's estimated fund flow was -$5.7 billion this week, a decrease from the previous week's +$23.4 billion, with a total of +$216.4 billion over the last 13 weeks [4] - Fund inflows were observed in 11 sectors, with Semiconductor Products and Equipment leading at +$17.2 billion, followed by Transportation (+$6.0 billion) and Energy (+$4.1 billion) [4] - Sectors experiencing fund outflows included Software and Services (-$15.9 billion) and Automotive and Parts (-$8.2 billion) [4] Earnings Forecast - The dynamic F12M EPS forecast for S&P 500 constituents was adjusted upward by 0.3%, following a 0.2% increase the previous week [5] - Earnings expectations were raised for 21 sectors, with the highest adjustments in Integrated Finance (+0.8%), Automotive and Parts (+0.8%), and Semiconductor Products and Equipment (+0.8%) [5] - Three sectors saw downward revisions, notably Healthcare Equipment and Services (-1.0%) and Telecommunications (-0.2%) [5] Price Performance - The Energy sector recorded a price return of +2.6% this week, while the Telecommunications sector saw a decline of -4.8% [15] - Over the past 52 weeks, the Energy sector has increased by 5.1%, while the Telecommunications sector has decreased by 4.0% [15] - The Semiconductor Products and Equipment sector has shown a remarkable increase of +48.0% over the past 13 weeks [15] Fund Flow Analysis - The Industrial sector led with a net fund inflow of $781 million this week, followed by Energy with $409 million [19] - The Semiconductor Products and Equipment sector also saw significant inflows of $1.716 billion, indicating strong investor interest [19] - In contrast, the Software and Services sector experienced the largest outflow of -$1.594 billion [19]

Core Viewpoint - Nike is attempting to implement a turnaround strategy, but the company is facing significant challenges that necessitate this change [1][4]. Group 1: Management Changes - Nike has appointed Aaron Cain, a 21-year veteran of the company, as the new CEO of Converse, replacing Jared Carver [3][4]. - The leadership change at Converse is seen as overdue, with hopes that it may lead to improved business performance [6]. Group 2: Financial Performance - In fiscal 2025, Nike reported a 10% decline in annual revenue and a 12% decline in Q4 sales [5]. - Converse's sales experienced a more severe downturn, with a 19% decline for the year and a 26% decline for the quarter [5]. - Nike's earnings fell by 44% last year, raising concerns about the justification for its high valuation of 34.5 times earnings [6][7]. Group 3: Market Outlook - Analysts project that Nike's earnings growth will not exceed 7% annually over the next five years, leading to skepticism about the stock's current valuation [7].