NIKE(NKE)2025-04-03 20:23Financial Performance - NIKE, Inc. revenues for Q3 fiscal 2025 were 12.4 billion in Q3 fiscal 2024[90]. - Net income for Q3 fiscal 2025 was 1.172 billion in Q3 fiscal 2024[95]. - Earnings before interest and taxes (EBIT) for Q3 fiscal 2025 was 1.352 billion in Q3 fiscal 2024[93]. - For the first nine months of FY2025, NIKE, Inc. revenues totaled 38.8 billion in the same period of FY2024[101]. - Total revenues for the three months ended February 28, 2025, decreased by 4% to 5,070 million in the same period last year[118]. - Total NIKE Brand EBIT decreased by 41% to 2,128 million in the prior year[117]. - Reported EBIT decreased 26%, reflecting lower revenues and increased selling and administrative expenses driven by higher demand creation expenses[132]. Revenue Breakdown - NIKE Direct revenues were 5.4 billion in Q3 fiscal 2024, representing approximately 43% of total NIKE Brand revenues[90]. - NIKE Brand revenues, accounting for over 90% of total revenues, decreased 9% on a reported basis and 6% on a currency-neutral basis, driven by declines in the Jordan Brand, Men's, Kids', and Women's categories[98]. - NIKE Brand wholesale revenues decreased 7% on a reported basis and 4% on a currency-neutral basis, impacted by lower revenues in Greater China, EMEA, and Asia Pacific & Latin America[98]. - NIKE Direct revenues were 5.4 billion in Q3 FY2024, primarily due to a 15% decline in NIKE Brand Digital sales[99]. - Greater China revenues decreased by 17% to 2,084 million in the same period last year[128]. - APLA revenues decreased 4% on a currency-neutral basis, primarily due to lower revenues in Southeast Asia and India, with NIKE Direct revenues down 4% due to digital sales declines of 8%[135]. - Converse revenues decreased 16% on a currency-neutral basis, driven by revenue declines in all territories, with unit sales down 10% and ASP down 6% due to higher discounts[142]. Cost and Margin Analysis - Gross margin for Q3 fiscal 2025 decreased by 330 basis points to 41.5%, compared to 44.8% in Q3 fiscal 2024[90]. - Gross profit for Q3 FY2025 was 5.562 billion in Q3 FY2024, with a gross margin of 41.5%, down 330 basis points year-over-year[100]. - Gross margin contracted by 210 basis points primarily due to lower ASP and higher inventory obsolescence reserves[122]. - Gross margin contraction of approximately 470 basis points for Converse, primarily due to lower ASP, partially offset by lower product costs[142]. - The effective tax rate for Q3 FY2025 was 5.9%, a significant decrease from 16.5% in Q3 FY2024, primarily due to a one-time, non-cash deferred tax benefit[111]. Expenses and Investments - Demand creation expense increased by 8% to 1.011 billion in Q3 fiscal 2024[95]. - Total selling and administrative expenses for Q3 FY2025 were 4.226 billion in Q3 FY2024, with demand creation expenses increasing by 8%[103]. - Selling and administrative expenses increased by 12% driven by higher operating overhead and demand creation expenses[122]. - Cash provided by operations was 4,810 million for the same period in fiscal 2024[156]. - Cash used by investing activities was an outflow of 1,184 million for the same period in fiscal 2024[157]. - Cash used by financing activities was an outflow of 4,468 million in the same period of fiscal 2024[158]. Shareholder Returns - NIKE returned approximately 2,753 million at an average price of 18 billion share repurchase plan[159]. Market Conditions and Risks - External factors such as geopolitical dynamics and fluctuating foreign exchange rates are creating uncertainty and volatility in the operating environment[88]. - The impact of foreign exchange rate fluctuations on consolidated revenues was a detriment of approximately $310 million for the three months ended February 28, 2025[153]. - The company has not experienced difficulty accessing capital or credit markets in fiscal 2025, although future volatility may increase costs[165]. - There have been no material changes in market risk disclosures compared to the previous Annual Report[174]. Strategic Initiatives - NIKE plans to reduce the supply of certain footwear products while shifting focus to new and innovative products[91]. - The company is repositioning NIKE Brand Digital as a full-price platform and reinvesting in wholesale distribution[91].