NIKE(US:NKE)2025-12-30 21:20Revenue Performance - NIKE, Inc. revenues for Q2 fiscal 2026 were $12.4 billion, a 1% increase compared to $12.35 billion in Q2 fiscal 2025[86]. - NIKE Brand wholesale revenues reached $7.5 billion in Q2 fiscal 2026, up from $6.9 billion in Q2 fiscal 2025, driven by growth in North America[86]. - NIKE, Inc. revenues for Q2 FY2026 were $12.4 billion, up 1% year-over-year, with North America contributing a 4 percentage point increase, while Greater China, Converse, and APLA reduced revenues by approximately 2, 1, and 1 percentage points respectively[97]. - NIKE Brand revenues for the first six months of FY2026 were $24.1 billion, up 1% on a reported basis, with North America contributing a 3 percentage point increase[97]. - Total revenues for the three months ended November 30, 2025, increased by 9% to $5,633 million compared to $5,179 million in the same period of 2024[114]. - North America revenues increased by 9% on a currency-neutral basis, with wholesale revenues up 24% driven by marketplace management actions and expanded distribution[118]. - Total revenues for Greater China decreased 16% on a currency-neutral basis, with NIKE Direct revenues down 18% due to a 36% decline in digital sales[125]. - Total revenues for Asia Pacific & Latin America (APLA) decreased 4% on a currency-neutral basis, with NIKE Direct revenues down 5%[131]. Profitability and Margins - Gross margin for Q2 fiscal 2026 was 40.6%, down 300 basis points from 43.6% in Q2 fiscal 2025, mainly due to higher tariffs in North America[86]. - Gross margin for Q2 FY2026 was 40.6%, a decrease of 300 basis points compared to the prior year, primarily due to higher product costs and lower average selling prices[98][99]. - Total Nike Brand EBIT margin decreased to 8.0% from 11.3% in the prior year, indicating a significant decline in profitability[113]. - Gross margin contracted by 330 basis points to 40.8%, primarily due to new tariffs and lower ASP, partially offset by reduced warehousing and logistics costs[114]. - Gross profit for the first six months of fiscal 2026 was $1,301 million, down 17% from $1,565 million in the same period of fiscal 2025[122]. - Gross margin contracted by 290 basis points, primarily due to lower average selling prices (ASP) and higher product costs[124]. Income and Expenses - Net income for Q2 fiscal 2026 was $792 million, a 32% decline from $1.16 billion in Q2 fiscal 2025[92]. - The effective tax rate for Q2 fiscal 2026 was 20.7%, compared to 17.9% in Q2 fiscal 2025[92]. - Demand creation expenses increased by 13% to $1.27 billion in Q2 fiscal 2026 compared to $1.12 billion in Q2 fiscal 2025[92]. - Demand creation expense increased 13% in Q2 FY2026, attributed to higher brand and sports marketing expenses[102]. - Other (income) expense, net decreased from $8 million of income to $16 million of expense in Q2 FY2026, primarily due to unfavorable foreign currency conversion changes[107]. - Total selling and administrative expenses increased by 3% in the first six months of fiscal 2026 compared to the same period in fiscal 2025[122]. - Corporate expenses for Nike, Inc. decreased by 10% to $(508) million, compared to $(565) million in the previous year[113]. Inventory and Cash Management - NIKE's inventories as of November 30, 2025, were $7.7 billion, a 3% increase from $7.5 billion as of May 31, 2025[86]. - Cash provided by operations decreased by $642 million, primarily due to a $580 million decrease in net income and a $62 million decrease related to working capital changes[153]. - Cash used by investing activities decreased by $132 million, mainly driven by changes in short-term investments[154]. - Cash used by financing activities decreased by $1,893 million, primarily due to lower share repurchases[154]. - As of November 30, 2025, the company had cash and equivalents and short-term investments totaling $8.3 billion[160]. - The company believes existing cash and equivalents, short-term investments, and cash generated by operations will be sufficient to meet capital needs for the next twelve months[161]. Market and Segment Performance - NIKE Brand footwear revenues decreased 1% on a currency-neutral basis, with unit sales flat and lower average selling price reducing revenues by approximately 1 percentage point[97]. - NIKE Brand apparel revenues increased 4% on a currency-neutral basis, driven by a 4% increase in unit sales, while average selling price per unit remained flat[97]. - NIKE Direct revenues decreased to $4.6 billion in Q2 fiscal 2026 from $5.0 billion in Q2 fiscal 2025, primarily due to reduced traffic in NIKE Brand Digital[86]. - NIKE Direct revenues were $4.6 billion for Q2 FY2026, down 8% on a reported basis, primarily due to a 14% decline in NIKE Brand Digital sales and a 3% decline in NIKE store sales[97]. - Footwear revenues rose by 9% on a currency-neutral basis, with unit sales increasing by 14%, although lower average selling price (ASP) per pair reduced revenues by approximately 5 percentage points[118]. - Converse revenues decreased 30% to $300 million in the three months ended November 30, 2025, compared to $429 million in the same period of 2024, with a 31% decrease on a currency-neutral basis[134]. - Direct to consumer revenues for Converse decreased 29% on a currency-neutral basis, reflecting reduced traffic in North America and Western Europe[135][141]. Corporate and Debt Information - The company’s long-term debt ratings are A+ and A2, with a downgrade from A1 to A2 by Moody's Investor Services in November 2025[157]. - The company has a $3 billion commercial paper program, with no borrowings outstanding as of November 30, 2025[158]. - As of November 30, 2025, the company had no off-balance sheet arrangements that could materially affect financial condition[163].