NIKE Q3 Earnings Beat Estimates, Digital Revenues Down 15% Y/Y

Core Viewpoint - NIKE Inc. reported third-quarter fiscal 2025 results with both revenues and earnings per share (EPS) declining year over year, despite beating Zacks Consensus Estimates for both metrics [1][2]. Financial Performance - EPS for the quarter was 54 cents, a 30% decline from the previous year, but exceeded the Zacks Consensus Estimate of 28 cents [1]. - Revenues decreased by 9% year over year to $11.27 billion, surpassing the Zacks Consensus Estimate of $11.03 billion. On a currency-neutral basis, revenues fell by 7% [2]. - NIKE Direct revenues were down 12% to $4.7 billion, with a 15% drop in NIKE Brand Digital and a 2% decline in NIKE-owned stores [3]. Segment Performance - NIKE Brand revenues totaled $10.9 billion, a 9% decline year over year, affected by decreases across all geographies [5]. - In North America, revenues fell 4% to $4.9 billion, with NIKE Direct down 10% [6]. - EMEA revenues dropped 10% to $2.8 billion, with NIKE Direct down 12% [7]. - Greater China saw a 17% revenue decline to $1.7 billion, with NIKE Direct down 11% [8]. - APLA revenues fell 11% to $1.5 billion, with NIKE Direct dipping 4% [9]. Cost and Margin Analysis - Gross profit declined 16% to $4.7 billion, with gross margin contracting by 330 basis points to 41.5% due to increased discounts and higher product costs [10]. - Selling and administrative expenses decreased by 8% to $3.9 billion, but as a percentage of sales, SG&A expenses increased by 50 basis points to 34.5% [11]. Shareholder Returns - NIKE returned $1.1 billion to shareholders, including $499 million in share repurchases and $594 million in dividends [14]. - As of February 28, 2025, the company had repurchased 119.3 million shares for $11.8 billion as part of its four-year $18 billion share repurchase program [14]. Outlook - For the fourth quarter, management expects revenues to decline in the mid-teens range, with gross margin likely decreasing by 400-500 basis points [16]. - SG&A expenses are projected to increase in low to mid-single digits, while the company continues to manage expenses and invest in demand creation [17].