NIKE(US:NKE)2026-04-01 20:16Financial Performance - NIKE, Inc. revenues for Q3 fiscal 2026 were $11.3 billion, flat on a reported basis and down 3% on a currency-neutral basis[91]. - Net income for Q3 fiscal 2026 was $520 million, a decrease of 35% compared to $794 million in Q3 fiscal 2025[101]. - Total NIKE, Inc. EBIT decreased by 23% to $635 million for the three months ended February 28, 2026, compared to $826 million in the same period of 2025[123]. - Total revenues for NIKE, Inc. were $11,279 million for the three months ended February 28, 2026, a slight increase of 0% compared to $11,269 million in the same period of 2025[123]. - Total revenues for the nine months ended February 28, 2026, decreased by 11% to $4,550 million compared to $5,110 million in the same period of 2025[132]. Revenue Breakdown - NIKE Brand wholesale revenues increased to $6.5 billion in Q3 fiscal 2026, up from $6.2 billion in Q3 fiscal 2025, driven by higher revenues in North America and Asia Pacific & Latin America[91]. - NIKE Direct revenues decreased to $4.5 billion in Q3 fiscal 2026 from $4.7 billion in Q3 fiscal 2025, primarily due to a decrease in traffic[91]. - NIKE Brand revenues for the first nine months of FY2026 were $35.4 billion, up 1% on a reported basis, with a currency-neutral decrease of 1%[106]. - NIKE Brand wholesale revenues for the first nine months of FY2026 were $20.8 billion, up 7% on a reported basis and up 5% on a currency-neutral basis[106]. Cost and Margin Analysis - Gross margin for Q3 fiscal 2026 decreased by 130 basis points to 40.2%, mainly due to higher tariffs in North America[91]. - Gross profit for Q3 FY2026 was $4.53 billion, a 3% decrease from $4.68 billion in Q3 FY2025, resulting in a gross margin of 40.2%, down 130 basis points year-over-year[107][108]. - Gross margin contracted by 350 basis points to 39.6% due to higher tariffs, partially offset by higher ASP and lower inventory obsolescence reserves[127]. - Gross margin for Converse contracted by approximately 970 basis points, primarily due to brand reset costs and higher inventory obsolescence reserves[148]. Tax and Expenses - The effective tax rate for Q3 fiscal 2026 was 20.0%, compared to 5.9% in Q3 fiscal 2025[101]. - Total selling and administrative expenses for Q3 FY2026 were $3.98 billion, up 2% from $3.89 billion in Q3 FY2025, representing 35.3% of revenues[108]. - Demand creation expense increased by 4% to $416 million, attributed to higher sports marketing expenses[127]. - Demand creation expense increased by 11%, primarily due to unfavorable foreign currency exchange rates and higher sports marketing expenses[131]. Shareholder Returns and Capital Management - NIKE returned approximately $609 million to shareholders through dividends in Q3 fiscal 2026[91]. - The company repurchased a total of 1.8 million shares for $122.4 million under the $18 billion share repurchase program, with 124.4 million shares repurchased at a cost of approximately $12.1 billion as of February 28, 2026[163]. - Cash provided by operations was $1,231 million, a decrease from $3,235 million in the same period of 2025[159]. - Cash used by financing activities for the nine months ended February 28, 2026, was $1,778 million, primarily driven by dividend payments, compared to $4,176 million in 2025[162]. Market and Geographic Performance - North America revenues increased by 3% on a currency-neutral basis, with wholesale revenues up 11%, while NIKE Direct revenues decreased by 5%[127]. - EMEA revenues decreased by 7% on a currency-neutral basis, with NIKE Direct revenues down 13% due to a 6% decline in digital sales and a 20% decline in store sales[131]. - Greater China revenues decreased by 10% on a currency-neutral basis, with wholesale revenues down 13% and NIKE Direct revenues down 5%[135]. - APLA revenues decreased 2% on a currency-neutral basis, with NIKE Direct revenues down 8% due to a 12% decline in digital sales and a 3% decline in store sales[140]. Operational Challenges - The company recognized pre-tax charges of $230 million for the three months ended February 28, 2026, primarily related to employee severance costs[94]. - The U.S. Supreme Court ruled that tariffs imposed under the IEEPA were unauthorized, with total tariffs paid amounting to approximately $1.0 billion[95]. - Other (income) expense, net for Q3 FY2026 was $82 million, an increase from $38 million in Q3 FY2025, mainly due to settlements of legal matters[115][116]. - Corporate expenses decreased by 13% to $411 million for the three months ended February 28, 2026, compared to $470 million in the same period of 2025[123].