Group 1: Price Adjustments at Xibei - Xibei has announced significant price reductions on its menu items, with some dishes seeing price cuts exceeding 20% [1] - The price changes were implemented on October 1, with staff updating old menus with new price tags due to the sudden notice [1] - Examples of price changes include: - Scallion Grilled Fish reduced from 89 yuan to 79 yuan (11% decrease) - Sesame Oil Cucumber reduced from 23 yuan to 19 yuan (17% decrease) - Five Tomato Sour Soup Fish reduced from 29 yuan to 23 yuan (20% decrease) [1] Group 2: Tesla's Market Performance - Elon Musk has become the world's first billionaire to surpass $500 billion in net worth, largely due to Tesla's stock performance [2] - Tesla's stock rose by 2.6% to $456.29, reaching a year-high and bringing its market capitalization back to $1.5 trillion [2] - The increase in Tesla's sales in Europe, particularly in France and Denmark, is attributed to strong demand for the Model Y [2] Group 3: New Energy Vehicle Deliveries - In September, seven car manufacturers delivered over 30,000 new energy vehicles, with five companies reporting year-on-year growth exceeding 50% [3] - BYD delivered 396,000 units, a year-on-year decrease of 5.52%, but a month-on-month increase of 6.06% [3] - Leap Motor and Xiaopeng reported significant growth, with deliveries increasing by 97.4% and 94.74% respectively [3] Group 4: Investment Activities - Mixue Group plans to invest 285.6 million yuan to acquire a 51% stake in Fulu Family (Zhengzhou) Enterprise Management [2] - After the investment, Mixue will hold a total of 53% of Fulu Family, making it a non-wholly owned subsidiary [2] Group 5: Apple and AI Developments - Apple has denied any wrongdoing in its collaboration with OpenAI, stating that it plans to work with various AI companies, including xAI [3] - The company is facing a lawsuit from Musk's xAI, which claims that Apple's partnership with OpenAI stifles innovation [3] Group 6: Microsoft and AI Integration - Microsoft is integrating AI services into its Office software, launching a higher-priced version of Microsoft 365 at $19.99 per month [5] - This move aims to enhance competition with OpenAI's ChatGPT [5] Group 7: Automotive Industry Developments - Toyota Kirloskar Motor is reportedly considering an IPO in India, aiming to raise approximately $700-800 million [6] - The formal IPO process has not yet begun, and the company has denied any such plans [6] Group 8: Financial Performance of Nike - Nike reported Q1 revenue of $11.72 billion, a year-on-year increase of 1.1%, surpassing expectations [6] - The company's gross margin was 42.2%, down from 45.4% in the previous year [6] Group 9: ExxonMobil's Workforce Reduction - ExxonMobil announced a global workforce reduction of approximately 2,000 positions, representing about 3-4% of its total workforce [6] - This move is part of a long-term restructuring plan to consolidate smaller offices into regional centers [6]

Group 1: Price Adjustments at Xibei - Xibei has implemented significant price reductions across its menu, with some dishes seeing price drops exceeding 20% [1] - Specific examples of price changes include: - Grassland Tender Grilled Lamb Chops reduced from 119 RMB to 109 RMB - Scallion Grilled Fish reduced from 89 RMB to 79 RMB - Yellow Rice Cake (6 pieces) reduced from 29 RMB to 26 RMB [1][2] Group 2: Tesla's Market Performance - Elon Musk has become the world's first billionaire to surpass 500 billion USD in net worth, largely due to Tesla's stock performance [2] - Tesla's stock rose by 2.6% to 456.29 USD, reaching a year-to-date high and a market capitalization of 1.5 trillion USD, driven by strong demand for the Model Y in Europe [2] Group 3: New Energy Vehicle Deliveries - In September, seven companies delivered over 30,000 new energy vehicles, with five companies reporting year-on-year growth exceeding 50% [3][4] - BYD delivered 396,000 vehicles, a year-on-year decrease of 5.52%, but a month-on-month increase of 6.06% [3] - Other notable deliveries include: - Leap Motor: 67,000 vehicles, up 97.4% year-on-year - Xiaopeng: 42,000 vehicles, up 94.74% year-on-year - NIO: 35,000 vehicles, up 64.06% year-on-year [4] Group 4: M&A Activity in the Food and Beverage Sector - Mixue Group plans to invest 285.6 million RMB to acquire a 51% stake in Fulu Family (Zhengzhou) Enterprise Management [4] - This acquisition will make Fulu Family a non-wholly owned subsidiary of Mixue Group [4] Group 5: Technology and AI Developments - Apple has denied any wrongdoing in its collaboration with OpenAI, stating that it plans to work with various AI chatbots in the future [8] - Microsoft is integrating AI services into its Office suite to compete with ChatGPT, launching a higher-priced version of Microsoft 365 [11] - Apple is shifting focus from upgrading its Vision Pro headset to developing smart glasses to compete with Meta's products [11] Group 6: Financial Performance of Nike - Nike reported Q1 revenue of 11.72 billion USD, a year-on-year increase of 1.1%, surpassing estimates [11] - The gross margin for the quarter was 42.2%, down from 45.4% year-on-year but above the expected 41.7% [11] Group 7: Employment Changes in Major Corporations - ExxonMobil announced a global workforce reduction of approximately 2,000 positions, representing about 3% to 4% of its total workforce [12] - The layoffs are part of a long-term restructuring plan focused on core growth projects [12]

Core Insights - Nike's fiscal first quarter results exceeded expectations, with stock rising over 6% following the announcement [1][2] - Despite challenges in digital sales and tariffs in China, strong performance in wholesale distribution and North America contributed to the positive results [1] Financial Performance - Nike reported Q1 earnings of $0.49 per share, down from $0.70 year-over-year, but surpassed EPS expectations of $0.27 by 81% [3] - Q1 sales reached $11.72 billion, an increase from $11.58 billion a year ago, exceeding estimates of $11 billion by 6% [3][4] Revenue Guidance - For Q2 FY2026, Nike expects a low single-digit revenue decline, aligning with the Zacks Consensus estimate of $11.95 billion, indicating a 3% decline [5] - Gross margins for Q2 are anticipated to decrease by approximately 300 to 375 basis points, with a net headwind of 175 basis points from new tariffs [8] Sales Estimates - Zacks Consensus estimates for upcoming quarters show projected sales of $11.95 billion for the current quarter and $11.40 billion for the next quarter, with a year-over-year decline of 3.24% expected [9] - Sales are projected to dip 1% in FY26 but are expected to rebound with a 6% increase in FY27, reaching $48.59 billion [8][9] Valuation Metrics - Nike stock is trading at less than 2X forward sales, compared to the industry average of 1X, but has a forward earnings multiple of 41.7X, significantly higher than the S&P 500 and industry average of 21.7X [10] - The current valuation suggests a moderately stretched P/E ratio, which may require significant earnings estimate revisions for a buy rating [12]

Market Overview - The government shutdown began on October 1, 2025, after Congress failed to reach a consensus, yet the stock market remains optimistic with a positive start for October [1] - The S&P 500 index increased by 0.34%, reaching a 52-week high, while the Dow Jones Industrial Average rose by 0.1%, the Nasdaq Composite by 0.42%, and the Russell 2000 by 0.4% [7] Treasury Yield and Economic Impact - The 10-year Treasury yield experienced a slight dip of 0.033% following the government shutdown, with potential long-term impacts on the market if the shutdown persists [2] - Jobs data from the Department of Labor is delayed due to the shutdown, which could affect market sentiment [2] Company Performances - Nike's stock rose by 6.4% after its Q1 2026 earnings report exceeded expectations, closing at $74.20, although it is down 2.37% year-to-date [4][10] - Eli Lilly's stock increased by 8.2% due to optimism surrounding a deal with Pfizer for cheaper medicines [4] - Reddit's stock declined by 11.9% amid competition from ChatGPT [4] Notable Stock Movements - The top five S&P 500 stocks with significant gains include AES Corp (+16.8%), Biogen Inc (+10.1%), Thermo Fisher (+9.4%), Super Micro Computer (+9.3%), and Charles River Laboratories (+8.9%) [8] - Other notable stocks include Corteva Inc (-9.1%), News Corp Class B (-6%), and Pfizer (-6.8%) [12]

Group 1 - Nike's stock price increased by 6.41% on October 1, marking a total rise of 7.16% over four consecutive days, driven by HSBC raising its target price from $88 to $90, indicating market confidence in the company's future performance [1] - In Q1 of FY2026, Nike reported revenue of $11.7 billion, a 1% year-over-year increase, surpassing market expectations, with growth in both direct and distributor businesses, particularly due to ongoing inventory management optimization [1] - The "Win Now" strategy is playing a crucial role in key markets and product lines, laying a solid foundation for the company's long-term development, as stated by Nike's President [1] Group 2 - From an industry perspective, Nike's continuous innovation and strong brand influence allow it to maintain a favorable position in the competitive consumer goods sector, with robust revenue performance supporting its stock price [2] - The steady growth in revenue from Greater China contributes to Nike's overall recovery and gradual stock price increase, providing momentum for future performance [2] - Investors should closely monitor macroeconomic data and industry trends, as the stability of Nike's performance becomes a critical reference for investment decisions amid global economic uncertainties [2]

Core Viewpoint - Nike's long-term outlook presents a positive signal for investors, suggesting the potential for the company to regain lost market share [1] Company Summary - Analysts indicate that Nike may begin to recover business that was previously lost, highlighting a shift in investor sentiment towards the company [1]

Market Performance - U.S. stock markets showed resilience despite the first government shutdown in nearly seven years, with major indexes recovering from early declines [1][2] - The Dow Jones Industrial Average rose 0.1% to close at a record high for the second consecutive day, while the S&P 500 increased by 0.3%, also setting a new closing high [2] - The Nasdaq Composite outperformed with a 0.4% rise, nearing its intraday and closing records, and has seen a significant increase of 11.2% in Q3 [2][10] Economic Data and Federal Reserve Outlook - The ADP Employment Report indicated a surprising decline of 32,000 private-sector jobs, the largest monthly drop since March 2023, raising concerns about the labor market [4][5] - U.S. Treasury yields fell following the weak jobs report, with the 10-year yield at 4.106% and the 2-year yield at 3.547%, as investors anticipate a potential Fed rate cut by December [4] - The government shutdown may delay the release of key economic data, complicating the Federal Reserve's decision-making regarding interest rates [5] Upcoming Economic Events - Important economic data releases are scheduled for October, including U.S. International Trade in Goods and Services on October 7 and the advance estimate for GDP on October 30 [6] - A key inflation report (CPI) is set for October 15, followed by the monthly retail sales report on October 16, both critical for the Fed's monetary policy decisions [7] Major Corporate Announcements - Nike, Inc. reported a 1% increase in revenue, surpassing expectations with adjusted earnings per share of $0.49, significantly above the anticipated $0.26 [9][13] - Meta Platforms experienced a nearly 3% decline, continuing a downward trend since its August high, following news of a $14 billion AI infrastructure deal and plans for in-house chip development [13] - Corteva announced plans to separate into two independent companies focused on Crop Protection and Seed, expected to be completed in the second half of 2026 [13] - Rocket Companies completed a $14.2 billion acquisition of Mr. Cooper Group, aiming to enhance homeownership services [13] - Lithium Americas shares surged after the U.S. Department of Energy acquired a 5% stake in the company [13]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) This section presents NIKE, Inc.'s unaudited condensed consolidated financial statements and detailed accounting notes [Unaudited Condensed Consolidated Statements of Income](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :----------------------------- | :-------------- | :-------------- | :--------- | | Revenues | $11,720 | $11,589 | 1% | | Cost of sales | $6,777 | $6,332 | 7% | | Gross profit | $4,943 | $5,257 | -6% | | Income before income taxes | $922 | $1,307 | -29% | | NET INCOME | $727 | $1,051 | -31% | | Earnings per common share: | | | | | Basic | $0.49 | $0.70 | -30% | | Diluted | $0.49 | $0.70 | -30% | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :------------------------------------ | :-------------- | :-------------- | :--------- | | Net income | $727 | $1,051 | -31% | | Other comprehensive income (loss), net of tax: | | | | | Change in net foreign currency translation adjustment | $134 | $138 | -2.9% | | Change in net gains (losses) on cash flow hedges | $(186) | $(227) | 18.06% | | Change in net gains (losses) on other | $2 | $9 | -77.8% | | Total other comprehensive income (loss), net of tax | $(50) | $(80) | 37.5% | | TOTAL COMPREHENSIVE INCOME | $677 | $971 | -30.3% | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | Aug 31, 2025 (Millions) | May 31, 2025 (Millions) | Change (%) | | :-------------------------------- | :---------------------- | :---------------------- | :--------- | | Cash and equivalents | $7,024 | $7,464 | -5.89% | | Short-term investments | $1,551 | $1,687 | -8.06% | | Accounts receivable, net | $4,962 | $4,717 | 5.19% | | Inventories | $8,114 | $7,489 | 8.34% | | Total current assets | $23,898 | $23,362 | 2.29% | | TOTAL ASSETS | $37,334 | $36,579 | 2.06% | | Total current liabilities | $10,911 | $10,566 | 3.27% | | Long-term debt | $7,996 | $7,961 | 0.44% | | Total shareholders' equity | $13,468 | $13,213 | 1.93% | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $37,334 | $36,579 | 2.06% | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | 2025 (Millions) | 2024 (Millions) | Change ($) | | :------------------------------------ | :-------------- | :-------------- | :--------- | | Cash provided (used) by operations | $222 | $394 | $(172) | | Cash provided (used) by investing activities | $(59) | $(166) | $107 | | Cash provided (used) by financing activities | $(598) | $(1,622) | $1,024 | | Effect of exchange rate changes on cash and equivalents | $(5) | $19 | $(24) | | Net increase (decrease) in cash and equivalents | $(440) | $(1,375) | $935 | | CASH AND EQUIVALENTS, END OF PERIOD | $7,024 | $8,485 | -17.22% | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) | Metric | Aug 31, 2025 (Millions) | May 31, 2025 (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | | Capital in excess of stated value | $14,473 | $14,195 | | Accumulated other comprehensive income (loss) | $(308) | $(258) | | Retained earnings (deficit) | $(700) | $(727) | | Total shareholders' equity | $13,468 | $13,213 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering accounting policies, liabilities, and segment data [NOTE 1 Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%201%20Summary%20of%20Significant%20Accounting%20Policies) - The Company is evaluating ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective June 1, 2025, to determine its impact on disclosures[13](index=13&type=chunk) - The Company is evaluating ASU 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective June 1, 2027, to determine its impact on disclosures[14](index=14&type=chunk) [NOTE 2 Accrued Liabilities](index=9&type=section&id=NOTE%202%20Accrued%20Liabilities) | Accrued Liability | Aug 31, 2025 (Millions) | May 31, 2025 (Millions) | | :------------------------ | :---------------------- | :---------------------- | | Sales-related reserves | $1,788 | $1,834 | | Compensation and benefits | $1,244 | $1,245 | | Dividends payable | $599 | $598 | | Other | $2,292 | $2,234 | | TOTAL ACCRUED LIABILITIES | $5,923 | $5,911 | [NOTE 3 Fair Value Measurements](index=10&type=section&id=NOTE%203%20Fair%20Value%20Measurements) Assets at Fair Value (August 31, 2025) | Asset Type | Fair Value (Millions) | | :------------------------ | :-------------------- | | Cash | $1,409 | | U.S. Treasury securities | $897 | | Commercial paper and bonds | $672 | | Money market funds | $5,309 | | Time deposits | $271 | | U.S. Agency securities | $17 | | TOTAL ASSETS AT FAIR VALUE | $8,575 | - Derivative assets at fair value increased to **$188 million** as of August 31, 2025, from $131 million as of May 31, 2025[18](index=18&type=chunk)[19](index=19&type=chunk) - Derivative liabilities at fair value increased to **$518 million** as of August 31, 2025, from $371 million as of May 31, 2025[18](index=18&type=chunk)[19](index=19&type=chunk) - The fair value of long-term debt was approximately **$6,794 million** at August 31, 2025, up from $6,673 million at May 31, 2025[21](index=21&type=chunk) [NOTE 4 Income Taxes](index=11&type=section&id=NOTE%204%20Income%20Taxes) | Metric | Q1 FY26 | Q1 FY25 | Change (bps) | | :---------------- | :------ | :------ | :----------- | | Effective tax rate | 21.1% | 19.6% | 150 | - Total gross unrecognized tax benefits were **$1,021 million** as of August 31, 2025, with **$748 million** affecting the effective tax rate if recognized[24](index=24&type=chunk) - The Company estimates a possible decrease of up to **$228 million** in total gross unrecognized tax benefits within the next 12 months due to expected resolution of U.S. federal income tax matters[27](index=27&type=chunk) - The European Commission is investigating whether the Netherlands breached State Aid rules when granting certain tax rulings to the Company, which the Company believes is without merit[28](index=28&type=chunk) [NOTE 5 Stock-Based Compensation](index=12&type=section&id=NOTE%205%20Stock-Based%20Compensation) | Compensation Type | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :------------------------ | :----------------- | :----------------- | | Stock options | $76 | $71 | | ESPPs | $15 | $13 | | Restricted stock and units | $94 | $99 | | TOTAL | $185 | $183 | - Unrecognized compensation costs from stock options totaled **$309 million**, with a weighted average remaining period of **2.4 years**[32](index=32&type=chunk) - Unrecognized compensation costs from restricted stock and restricted stock units totaled **$522 million**, with a weighted average remaining period of **2.3 years**[33](index=33&type=chunk) [NOTE 6 Earnings Per Share](index=13&type=section&id=NOTE%206%20Earnings%20Per%20Share) | Metric | Q1 FY26 | Q1 FY25 | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | | Net income available to common stockholders | $727 | $1,051 | -31% | | Basic EPS | $0.49 | $0.70 | -30% | | Diluted EPS | $0.49 | $0.70 | -30% | - The computation of diluted earnings per common share excluded an estimated **68.3 million shares** for Q1 FY26 because the awards were assumed to be anti-dilutive[34](index=34&type=chunk) [NOTE 7 Risk Management and Derivatives](index=14&type=section&id=NOTE%207%20Risk%20Management%20and%20Derivatives) - The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately **$18.5 billion** as of August 31, 2025, compared to $18.4 billion as of May 31, 2025[42](index=42&type=chunk) - Approximately **$183 million** of deferred net losses (net of tax) on cash flow hedges are expected to be reclassified to Net income during the next 12 months[42](index=42&type=chunk) - The total notional amount of outstanding interest rate swap contracts designated as fair value hedges was **$2.4 billion** as of August 31, 2025 and May 31, 2025[43](index=43&type=chunk) - The total notional amount of outstanding undesignated derivative instruments was **$4.1 billion** as of August 31, 2025, compared to $4.0 billion as of May 31, 2025[44](index=44&type=chunk) [NOTE 8 Accumulated Other Comprehensive Income (Loss)](index=16&type=section&id=NOTE%208%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) | Component | Aug 31, 2025 (Millions) | May 31, 2025 (Millions) | | :-------------------------------- | :---------------------- | :---------------------- | | Foreign currency translation adjustment | $20 | $(114) | | Net cash flow hedges | $(393) | $(207) | | Net investment hedges | $115 | $115 | | Other | $(50) | $(52) | | TOTAL | $(308) | $(258) | [NOTE 9 Revenues](index=17&type=section&id=NOTE%209%20Revenues) Revenues by Product Line and Distribution Channel (Q1 FY26) | Revenue Type (Q1 FY26) | Amount (Millions) | | :--------------------- | :---------------- | | Footwear | $7,731 | | Apparel | $3,324 | | Equipment | $638 | | Sales to Wholesale Customers | $7,034 | | Sales through Direct to Consumer | $4,659 | | TOTAL REVENUES | $11,720 | Revenues by Product Line and Distribution Channel (Q1 FY25) | Revenue Type (Q1 FY25) | Amount (Millions) | | :--------------------- | :---------------- | | Footwear | $7,898 | | Apparel | $3,049 | | Equipment | $615 | | Sales to Wholesale Customers | $6,685 | | Sales through Direct to Consumer | $4,877 | | TOTAL REVENUES | $11,589 | [NOTE 10 Segment Information](index=18&type=section&id=NOTE%2010%20Segment%20Information) Revenues by Segment (Q1 FY26) | Segment | Amount (Millions) | | :------------------------- | :---------------- | | North America | $5,020 | | Europe, Middle East & Africa | $3,331 | | Greater China | $1,512 | | Asia Pacific & Latin America | $1,490 | | Global Brand Divisions | $9 | | Converse | $366 | | Corporate | $(8) | | TOTAL NIKE, INC. REVENUES | $11,720 | EBIT by Segment (Q1 FY26) | Segment | Amount (Millions) | | :--------------------- | :---------------- | | North America | $1,134 | | Europe, Middle East & Africa | $735 | | Greater China | $377 | | Asia Pacific & Latin America | $350 | | Global Brand Divisions | $(1,192) | | Converse | $39 | | Corporate | $(539) | | TOTAL NIKE, INC. EBIT | $904 | Inventories by Segment (August 31, 2025) | Inventories (Aug 31, 2025) | Amount (Millions) | | :------------------------- | :---------------- | | North America | $3,524 | | Europe, Middle East & Africa | $2,128 | | Greater China | $1,097 | | Asia Pacific & Latin America | $1,066 | | Global Brand Divisions | $142 | | Converse | $247 | | Corporate | $(90) | | TOTAL NIKE, INC. INVENTORIES | $8,114 | [NOTE 11 Commitments and Contingencies](index=20&type=section&id=NOTE%2011%20Commitments%20and%20Contingencies) - The Company is disputing claims from Belgian Customs for alleged underpaid duties related to products imported beginning in fiscal 2018[65](index=65&type=chunk) - The potential loss from the Belgian Customs claim is currently unestimable, but an adverse resolution could have a material adverse effect on the Company's results of operations, financial position, and cash flows[65](index=65&type=chunk) [NOTE 12 Supplier Finance Programs](index=20&type=section&id=NOTE%2012%20Supplier%20Finance%20Programs) - Outstanding supplier obligations confirmed under voluntary supplier finance programs increased to **$1,314 million** as of August 31, 2025, from $1,101 million as of May 31, 2025[66](index=66&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of NIKE's business, financial highlights, and detailed analysis of operating results, liquidity, and capital [OVERVIEW](index=21&type=section&id=OVERVIEW) - NIKE is the largest seller of athletic footwear and apparel in the world, selling products through NIKE Direct and wholesale channels[67](index=67&type=chunk) - The company's strategy is to achieve sustainable, profitable long-term revenue growth by leading with sport, creating innovative products, building deep consumer connections, and delivering compelling consumer experiences through digital platforms and retail[68](index=68&type=chunk) [QUARTERLY FINANCIAL HIGHLIGHTS](index=21&type=section&id=QUARTERLY%20FINANCIAL%20HIGHLIGHTS) Q1 FY26 Financial Highlights | Metric | Q1 FY26 (Billions) | Q1 FY25 (Billions) | Change (%) | | :--------------------- | :----------------- | :----------------- | :--------- | | Total Revenues | $11.7 | $11.6 | 1% | | NIKE Direct revenues | $4.5 | $4.7 | -4% | | NIKE Brand wholesale revenues | $6.8 | $6.4 | 7% | | Gross margin | 42.2% | 45.4% | -320 bps | | Inventories (Aug 31) | $8.1 | $7.489 (May 31) | 8% (QoQ) | - Gross margin decreased **320 basis points** due to higher discounts with wholesale partners, higher discounts in NIKE Brand factory stores, an increase in product costs (including new tariffs), and changes in channel mix[71](index=71&type=chunk) - The company returned approximately **$0.7 billion** to shareholders in Q1 FY26 through dividends and share repurchases[71](index=71&type=chunk) - New tariffs are expected to result in a gross incremental cost of approximately **$1.5 billion** on an annualized basis, with a negative impact on gross margin for fiscal 2026[70](index=70&type=chunk) - Strategic actions include reducing the supply of certain footwear, repositioning NIKE Brand Digital as a full-price platform, reinvesting in wholesale distribution, and increasing investment in demand creation[72](index=72&type=chunk) [USE OF NON-GAAP FINANCIAL MEASURES](index=22&type=section&id=USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) Earnings Before Interest and Taxes (EBIT) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | | Net income | $727 | $1,051 | -31% | | Add: Interest expense (income), net | $(18) | $(43) | 58.1% | | Add: Income tax expense | $195 | $256 | -23.8% | | EARNINGS BEFORE INTEREST AND TAXES | $904 | $1,264 | -28.5% | | EBIT MARGIN | 7.7% | 10.9% | -320 bps | - Currency-neutral revenues are calculated using actual exchange rates from the comparative prior year period to exclude the impact of foreign currency exchange rate fluctuations[75](index=75&type=chunk) [COMPARABLE STORE SALES](index=22&type=section&id=COMPARABLE%20STORE%20SALES) - Comparable store sales, a key metric, exclude NIKE Brand Digital sales and comprise revenues from NIKE-owned in-line and factory stores that have been open at least one year, with square footage changes of no more than 15% and no permanent repositioning within the past year[76](index=76&type=chunk) [RESULTS OF OPERATIONS](index=23&type=section&id=RESULTS%20OF%20OPERATIONS) This section details consolidated operating results for Q1 FY26 vs Q1 FY25, highlighting decreased net income and diluted EPS due to gross margin contraction [CONSOLIDATED OPERATING RESULTS](index=23&type=section&id=CONSOLIDATED%20OPERATING%20RESULTS) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :----------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $11,720 | $11,589 | 1% | | Cost of sales | $6,777 | $6,332 | 7% | | Gross profit | $4,943 | $5,257 | -6% | | Gross margin | 42.2% | 45.4% | -320 bps | | Income before income taxes | $922 | $1,307 | -29% | | NET INCOME | $727 | $1,051 | -31% | | Diluted earnings per common share | $0.49 | $0.70 | -30% | [REVENUES](index=23&type=section&id=REVENUES) NIKE, Inc. Revenues (Q1 FY26 vs Q1 FY25) | Revenue Type | Reported Change (%) | Currency-Neutral Change (%) | | :-------------------------------- | :------------------ | :-------------------------- | | TOTAL NIKE, INC. REVENUES | 1% | -1% | | TOTAL NIKE BRAND REVENUES | 2% | 0% | | NIKE Brand Footwear | -1% | -2% | | NIKE Brand Apparel | 9% | 7% | | NIKE Brand Equipment | 4% | 3% | | Converse | -27% | -28% | | NIKE Brand Wholesale Revenues | 7% | 5% | | NIKE Direct Revenues | -4% | -5% | | NIKE Brand Digital Sales | -12% | -12% | [GROSS MARGIN](index=24&type=section&id=GROSS%20MARGIN) | Metric | Q1 FY26 | Q1 FY25 | Change (bps) | | :----------- | :------ | :------ | :----------- | | Gross margin | 42.2% | 45.4% | -320 | - Consolidated gross margin decreased by **320 basis points**, primarily due to lower NIKE Brand average selling price (approx. 250 bps), higher NIKE Brand product costs (approx. 100 bps), and lower gross margin from Converse (approx. 30 bps)[83](index=83&type=chunk) - The decrease was partially offset by lower warehousing and logistics costs (approx. 50 bps increase) and favorable changes in net foreign currency exchange rates (approx. 30 bps increase)[83](index=83&type=chunk) [TOTAL SELLING AND ADMINISTRATIVE EXPENSE](index=25&type=section&id=TOTAL%20SELLING%20AND%20ADMINISTRATIVE%20EXPENSE) | Expense Type | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Demand creation expense | $1,188 | $1,226 | -3% | | Operating overhead expense | $2,828 | $2,822 | 0% | | Total selling and administrative expense | $4,016 | $4,048 | -1% | | % of revenues | 34.3% | 34.9% | -60 bps | - Demand creation expense decreased **3%** due to lower brand marketing expense, partially offset by higher sports marketing expense and unfavorable changes in foreign currency exchange rates[86](index=86&type=chunk) - Operating overhead expense was flat due to higher wage-related expense and unfavorable changes in foreign currency exchange rates, offset by lower other administrative costs[87](index=87&type=chunk) [OTHER (INCOME) EXPENSE, NET](index=25&type=section&id=OTHER%20(INCOME)%20EXPENSE,%20NET) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :------------------------ | :----------------- | :----------------- | | Other (income) expense, net | $23 (expense) | $(55) (income) | - The shift from income to expense was primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges[89](index=89&type=chunk) [INCOME TAXES](index=25&type=section&id=INCOME%20TAXES) | Metric | Q1 FY26 | Q1 FY25 | Change (bps) | | :---------------- | :------ | :------ | :----------- | | Effective tax rate | 21.1% | 19.6% | 150 | - The increase in the effective tax rate was primarily due to decreased benefits from stock-based compensation[91](index=91&type=chunk) [SEGMENT INFORMATION](index=26&type=section&id=SEGMENT%20INFORMATION) This section details revenues and EBIT by operating segment, highlighting varying regional performance with growth in North America and EMEA, and declines in other regions Revenues by Segment (Q1 FY26 vs Q1 FY25) | Segment | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :------------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | North America | $5,020 | $4,826 | 4% | 4% | | Europe, Middle East & Africa | $3,331 | $3,143 | 6% | 1% | | Greater China | $1,512 | $1,666 | -9% | -10% | | Asia Pacific & Latin America | $1,490 | $1,462 | 2% | 1% | | Global Brand Divisions | $9 | $14 | -36% | -39% | | TOTAL NIKE BRAND | $11,362 | $11,111 | 2% | 0% | | Converse | $366 | $501 | -27% | -28% | | Corporate | $(8) | $(23) | — | — | | TOTAL NIKE, INC. REVENUES | $11,720 | $11,589 | 1% | -1% | EBIT by Segment (Q1 FY26 vs Q1 FY25) | Segment | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | North America | $1,134 | $1,216 | -7% | | Europe, Middle East & Africa | $735 | $792 | -7% | | Greater China | $377 | $502 | -25% | | Asia Pacific & Latin America | $350 | $402 | -13% | | Global Brand Divisions | $(1,192) | $(1,227) | 3% | | TOTAL NIKE BRAND | $1,404 | $1,685 | -17% | | Converse | $39 | $121 | -68% | | Corporate | $(539) | $(542) | 1% | | TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES | $904 | $1,264 | -28% | | EBIT margin | 7.7% | 10.9% | -320 bps | [NORTH AMERICA](index=27&type=section&id=NORTH%20AMERICA) North America Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :--------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | TOTAL REVENUES | $5,020 | $4,826 | 4% | 4% | | Sales to Wholesale Customers | $2,736 | $2,475 | 11% | 11% | | Sales through NIKE Direct | $2,284 | $2,351 | -3% | -3% | | EBIT | $1,134 | $1,216 | -7% | | | Gross margin | 42.3% | 45.6% | -330 bps | | - North America footwear revenues were flat on a currency-neutral basis, with unit sales increasing **5%** but average selling price (ASP) decreasing approximately **5%** due to channel mix and higher discounts[96](index=96&type=chunk) - North America apparel revenues increased **11%** on a currency-neutral basis, with unit sales increasing **16%** but ASP decreasing approximately **5%** due to channel mix and higher discounts[96](index=96&type=chunk) - Gross margin contraction of **330 basis points** was primarily due to new tariffs and lower ASP, partially offset by lower warehousing and logistics costs[96](index=96&type=chunk) [EUROPE, MIDDLE EAST & AFRICA](index=28&type=section&id=EUROPE,%20MIDDLE%20EAST%20%26%20AFRICA) EMEA Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :--------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | TOTAL REVENUES | $3,331 | $3,143 | 6% | 1% | | Sales to Wholesale Customers | $2,261 | $2,074 | 9% | 4% | | Sales through NIKE Direct | $1,070 | $1,069 | 0% | -6% | | EBIT | $735 | $792 | -7% | | | Gross margin | 43.0% | 46.1% | -310 bps | | - EMEA footwear revenues decreased **2%** on a currency-neutral basis, with unit sales increasing **4%** but ASP decreasing approximately **6%** due to higher discounts and channel mix[98](index=98&type=chunk) - EMEA apparel revenues increased **6%** on a currency-neutral basis, with unit sales increasing **8%** but ASP decreasing approximately **2%** due to higher discounts[98](index=98&type=chunk) - Gross margin contraction of **310 basis points** was primarily due to higher product costs and lower ASP, partially offset by lower warehousing and logistics costs[98](index=98&type=chunk) [GREATER CHINA](index=29&type=section&id=GREATER%20CHINA) Greater China Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :--------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | TOTAL REVENUES | $1,512 | $1,666 | -9% | -10% | | Sales to Wholesale Customers | $893 | $971 | -8% | -9% | | Sales through NIKE Direct | $619 | $695 | -11% | -12% | | EBIT | $377 | $502 | -25% | | | Gross margin | 47.2% | 48.7% | -150 bps | | - Greater China footwear revenues decreased **12%** on a currency-neutral basis, with unit sales decreasing **11%** and ASP decreasing approximately **1%** due to higher discounts and channel mix[100](index=100&type=chunk) - Greater China apparel revenues were flat on a currency-neutral basis, with unit sales decreasing **2%** but ASP increasing approximately **2%** due to product mix[100](index=100&type=chunk) - Gross margin contraction of **150 basis points** was primarily due to higher product costs, driven by product mix[100](index=100&type=chunk) [ASIA PACIFIC & LATIN AMERICA](index=30&type=section&id=ASIA%20PACIFIC%20%26%20LATIN%20AMERICA) APLA Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :--------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | TOTAL REVENUES | $1,490 | $1,462 | 2% | 1% | | Sales to Wholesale Customers | $949 | $890 | 7% | 6% | | Sales through NIKE Direct | $541 | $572 | -5% | -6% | | EBIT | $350 | $402 | -13% | | | Gross margin | 43.8% | 46.5% | -270 bps | | - APLA footwear revenues were flat on a currency-neutral basis, with unit sales increasing **5%** but ASP decreasing approximately **5%** due to product mix, channel mix, and higher discounts[102](index=102&type=chunk) - APLA apparel revenues increased **5%** on a currency-neutral basis, with unit sales increasing **10%** but ASP decreasing approximately **5%** due to higher discounts and channel mix[102](index=102&type=chunk) - Gross margin contraction of approximately **270 basis points** was primarily due to lower ASP and unfavorable changes in standard foreign currency exchange rates[102](index=102&type=chunk) [GLOBAL BRAND DIVISIONS](index=31&type=section&id=GLOBAL%20BRAND%20DIVISIONS) Global Brand Divisions Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (%) | | :------------------------------ | :----------------- | :----------------- | :--------- | | Revenues | $9 | $14 | -36% | | EARNINGS (LOSS) BEFORE INTEREST AND TAXES | $(1,192) | $(1,227) | 3% | | Demand creation expense | $203 | $242 | -16% | | Operating overhead expense | $831 | $846 | -2% | - The decrease in loss before interest and taxes was primarily due to lower demand creation expense (down **16%**) and lower operating overhead expense (down **2%**)[104](index=104&type=chunk) [CONVERSE](index=31&type=section&id=CONVERSE) Converse Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Reported Change (%) | Currency-Neutral Change (%) | | :--------------------- | :----------------- | :----------------- | :------------------ | :-------------------------- | | TOTAL REVENUES | $366 | $501 | -27% | -28% | | Sales to Wholesale Customers | $195 | $275 | -29% | -31% | | Sales through Direct to Consumer | $145 | $190 | -24% | -25% | | EBIT | $39 | $121 | -68% | | | Gross margin | 47.3% | 53.5% | -620 bps | | - Converse unit sales decreased **22%**, while lower average selling price reduced revenues by approximately **6 percentage points** due to higher discounts and product mix[109](index=109&type=chunk) - Gross margin contraction of approximately **620 basis points** was primarily due to lower ASP and higher warehousing and logistics costs[109](index=109&type=chunk) [CORPORATE](index=32&type=section&id=CORPORATE) Corporate Segment Performance (Q1 FY26 vs Q1 FY25) | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change ($) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | EARNINGS (LOSS) BEFORE INTEREST AND TAXES | $(539) | $(542) | $3 | - Corporate's loss before interest and taxes decreased by **$3 million**, primarily due to a favorable change of **$20 million** in Operating overhead expense and a favorable change of **$17 million** in net foreign currency gains and losses related to standard rate differences[110](index=110&type=chunk) - This was partially offset by an unfavorable change of **$37 million** related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies[110](index=110&type=chunk) [FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES](index=33&type=section&id=FOREIGN%20CURRENCY%20EXPOSURES%20AND%20HEDGING%20PRACTICES) This section outlines NIKE's foreign currency exchange rate risks and strategies for managing them through a centralized hedging program, distinguishing transactional and translational exposures [OVERVIEW](index=33&type=section&id=OVERVIEW) - NIKE manages global foreign exchange risk centrally on a portfolio basis to address material risks[112](index=112&type=chunk) - The hedging policy is designed to partially or entirely offset the impact of exchange rate changes on underlying net exposures, delaying their impact on financial statements[112](index=112&type=chunk) [TRANSACTIONAL EXPOSURES](index=33&type=section&id=TRANSACTIONAL%20EXPOSURES) - Significant transactional foreign currency exposures include product costs (non-functional currency purchases), non-functional currency denominated external sales (e.g., European operations), other costs (e.g., endorsement contracts), and non-functional currency denominated monetary assets and liabilities subject to remeasurement[116](index=116&type=chunk) [MANAGING TRANSACTIONAL EXPOSURES](index=33&type=section&id=MANAGING%20TRANSACTIONAL%20EXPOSURES) - Transactional exposures are managed on a portfolio basis, utilizing natural offsets and currency correlations, and may involve currency forward and option contracts designated as cash flow hedges[114](index=114&type=chunk) - Changes in fair value of certain undesignated currency forward contracts, used to manage foreign exchange exposure of non-functional currency denominated monetary assets and liabilities, are recognized in Other (income) expense, net[115](index=115&type=chunk) [TRANSLATIONAL EXPOSURES](index=34&type=section&id=TRANSLATIONAL%20EXPOSURES) - Foreign exchange rate fluctuations had a favorable impact of approximately **$213 million** on consolidated Revenues for the three months ended August 31, 2025[117](index=117&type=chunk) - Foreign exchange rate fluctuations had a favorable impact of approximately **$54 million** on Income before income taxes for the three months ended August 31, 2025[117](index=117&type=chunk) [MANAGING TRANSLATIONAL EXPOSURES](index=34&type=section&id=MANAGING%20TRANSLATIONAL%20EXPOSURES) - To minimize translational impact, foreign subsidiaries purchase U.S. Dollar denominated available-for-sale investments, and the company uses forward contracts and/or options as cash flow hedges[118](index=118&type=chunk) - The combination of translation of foreign currency-denominated profits and year-over-year change in foreign currency related gains and losses had a favorable impact of approximately **$17 million** on Income before income taxes for Q1 FY26[119](index=119&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=34&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section reviews the company's cash flow activities and capital resources, noting decreased operating cash flow and lower investing/financing outflows [CASH FLOW ACTIVITY](index=34&type=section&id=CASH%20FLOW%20ACTIVITY) Cash Flow Activity (Q1 FY26 vs Q1 FY25) | Cash Flow Activity | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change ($) | | :------------------------------------ | :----------------- | :----------------- | :--------- | | Cash provided (used) by operations | $222 | $394 | $(172) | | Cash provided (used) by investing activities | $(59) | $(166) | $107 | | Cash provided (used) by financing activities | $(598) | $(1,622) | $1,024 | | NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS | $(440) | $(1,375) | $935 | - Cash provided by operations decreased by **$172 million**, driven by a decrease in Net income and changes in working capital[120](index=120&type=chunk) - The company purchased **1.8 million shares** of Class B Common Stock for **$123 million** in Q1 FY26, moderating and ultimately stopping repurchases due to lower operating cash flows[122](index=122&type=chunk) [CAPITAL RESOURCES](index=35&type=section&id=CAPITAL%20RESOURCES) - A shelf registration statement filed on July 17, 2025, permits the company to issue an unlimited amount of securities until July 17, 2028[123](index=123&type=chunk) - The company holds long-term debt ratings of **A+** from Standard and Poor's Corporation and **A1** from Moody's Investor Services[124](index=124&type=chunk) - As of August 31, 2025, no amounts were outstanding under committed credit facilities or the **$3 billion** commercial paper program[124](index=124&type=chunk)[125](index=125&type=chunk) - Cash and equivalents and Short-term investments totaled **$8.6 billion** as of August 31, 2025[127](index=127&type=chunk) - The company believes existing cash, investments, and cash generated by operations, along with access to external funds, will be sufficient to meet capital needs for the next twelve months and beyond[128](index=128&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=35&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) - As of August 31, 2025, the company did not have any off-balance sheet arrangements that are reasonably likely to have a material effect on its current or future financial condition, results of operations, liquidity, capital expenditures, or capital resources[129](index=129&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=36&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - Refer to Note 1 — Summary of Significant Accounting Policies for details on recently adopted and issued accounting standards[130](index=130&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=36&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) - The preparation of financial statements requires estimates and judgments that affect reported amounts, with critical accounting estimates having the greatest potential impact on the unaudited condensed consolidated financial statements[131](index=131&type=chunk) - The company is not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported for its critical accounting estimates[132](index=132&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no material changes in the company's quantitative and qualitative market risk disclosures from the prior Annual Report on Form 10-K - There have been no material changes in market risk disclosures from the information previously reported in the Annual Report on Form 10-K for the fiscal year ended May 31, 2025[133](index=133&type=chunk) [ITEM 4. Controls and Procedures](index=37&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures as of August 31, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of August 31, 2025[135](index=135&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the most recent fiscal quarter[136](index=136&type=chunk) [SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND ANALYST REPORTS](index=38&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS%20AND%20ANALYST%20REPORTS) This section provides a cautionary statement on forward-looking statements, outlining risks and uncertainties, and clarifies the company's policy against confirming analyst forecasts - Forward-looking statements involve risks and uncertainties, including intense competition, innovation, demographic changes, consumer preferences, global business risks (exchange rates, tariffs, political instability), IT systems, sustainability, operating results fluctuations, costs, intellectual property, and litigation, which may cause actual results to differ materially[137](index=137&type=chunk) - NIKE has a policy against confirming financial forecasts or projections issued by securities analysts and does not disclose material non-public information to them[138](index=138&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 11 — Commitments and Contingencies for details on legal proceedings - Refer to Note 11 — Commitments and Contingencies for details on legal proceedings[139](index=139&type=chunk) [ITEM 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) This section confirms no material changes in the company's risk factors from those disclosed in the prior Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those disclosed in Part I, Item 1A of its Annual Report on Form 10-K for the fiscal year ended May 31, 2025[140](index=140&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity under its $18 billion program, including Q1 FY26 repurchases and remaining authorization Summary of Share Repurchases (Q1 FY26) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------------------- | :------------------------------- | :--------------------------- | | June 1 - June 30, 2025 | 1,028,990 | $63.14 | | July 1 - July 31, 2025 | 780,281 | $74.86 | | August 1 - August 31, 2025 | — | — | | Total | 1,809,271 | $68.20 | - As of August 31, 2025, approximately **$5,866 million** remained authorized under the four-year, $18 billion share repurchase program[142](index=142&type=chunk) [ITEM 5. Other Information](index=41&type=section&id=ITEM%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 FY26 - None of the company's directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the fiscal quarter ended August 31, 2025[143](index=143&type=chunk) [ITEM 6. Exhibits](index=42&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the 10-Q report, including corporate governance documents, CEO/CFO certifications, and XBRL documents - Exhibits include Restated Articles of Incorporation, Sixth Amended and Restated Bylaws, Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer, Section 1350 Certifications, and Inline XBRL documents[144](index=144&type=chunk) [Signatures](index=43&type=section&id=Signatures) This section confirms the official signing of the report on behalf of NIKE, Inc. by its Chief Financial Officer and Authorized Officer - The report was signed by Matthew Friend, Chief Financial Officer and Authorized Officer of NIKE, Inc., on October 1, 2025[146](index=146&type=chunk)

Economic Indicators - US MBA mortgage applications fell by -12.7% in the week ended September 26, with the purchase mortgage sub-index down -1.0% and the refinancing sub-index down -20.6% [1] - The September ISM manufacturing index rose +0.4 to a 7-month high of 49.1, exceeding expectations of 49.0 [6] - The September ADP employment change unexpectedly fell by -32,000, marking the largest decline in 2.5 years, while August was revised lower to -3,000 from +54,000 [5] Market Reactions - Stocks initially moved lower due to the US government shutdown, but later recovered, with the S&P 500 and Nasdaq 100 reaching new all-time highs [2][4] - The dollar index fell to a one-week low, while gold prices climbed to a record high amid risk-off sentiment [2] - Rising corporate earnings expectations are a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [8] Sector Performance - Pharmaceutical stocks rallied, with AstraZeneca closing up more than +9% and Eli Lilly up more than +8%, driven by hopes from Pfizer's deal with the US government [15] - Chipmakers and AI-infrastructure stocks also saw gains, with Super Micro Computer closing up more than +9% and Micron Technology up more than +8% [16] - Grocery retailers declined after Amazon announced a new private-label food brand, leading to Dollar Tree and Dollar General closing down more than -4% and -3% respectively [22] Upcoming Economic Data - Weekly initial unemployment claims are expected to increase by +7,000 to 225,000, and August factory orders are expected to rise by +1.4% month-over-month [9] - September nonfarm payrolls are anticipated to increase by +51,000, with the unemployment rate expected to remain unchanged at 4.3% [9]

Core Insights - Nike's stock experienced a significant increase of over 6% following the release of its quarterly results, outperforming the S&P 500 index which rose by 0.3% [1] Financial Performance - For the fiscal first quarter of 2026, Nike reported revenue of $11.7 billion, reflecting a year-over-year increase of 1%. Wholesale revenue rose by 7% to $6.8 billion, while Nike Direct revenue decreased by 4% to $4.5 billion [2] - GAAP net income fell by 31% year-over-year to $727 million, equating to $0.49 per share. This performance exceeded analysts' expectations, who had forecasted revenue just under $11 billion and a per-share net income of $0.22 [3][6] Strategic Outlook - CEO Elliott Hill noted progress in Nike's turnaround program, particularly in North America, wholesale, and running sectors. However, he acknowledged the need for further work to align all sports, geographies, and channels amid a dynamic operating environment [4] - CFO Matt Friend provided guidance indicating that the wholesale business is expected to return to "modest" growth for the fiscal year, while Nike Direct is not anticipated to see revenue increases [4]