NIKE(US:NKE) Changjiang Securities·2025-03-26 14:13Investment Rating - The industry investment rating is "Positive" and maintained [8] Core Insights - For FY2025Q3 (December 1 - February 28), Nike reported revenue of $11.27 billion, slightly above expectations (Bloomberg consensus of $11.03 billion), with a year-over-year decline of 7% in constant currency, primarily due to weak demand, sluggish e-commerce growth, and poor performance from Converse [2][6] - Gross margin decreased by 3.3 percentage points year-over-year to 41.5%, mainly impacted by high discounts during inventory clearance and changes in channel structure [2][6] Revenue Breakdown - E-commerce continued to decline, with revenue from Direct-to-Consumer (DTC) and wholesale down 10% and 4% respectively, totaling $4.7 billion and $6.2 billion [10] - By region, Nike's revenue in North America, EMEA, APLA, and Greater China decreased by 4%, 6%, 4%, and 15% respectively, amounting to $4.86 billion, $2.81 billion, $1.47 billion, and $1.73 billion [10] - By product category, footwear, apparel, and equipment saw declines of 9%, 1%, and flat growth, with revenues of $7.21 billion, $3.19 billion, and $477 million respectively [10] Inventory Situation - As of FY2025Q3, Nike's inventory stood at $7.54 billion, down 2% year-over-year and 6% quarter-over-quarter, but still at a high level, indicating ongoing inventory clearance efforts [10] Performance Guidance - In the short term, the e-commerce business is transitioning to a full-price model, with old inventory being cleared, leading to expected revenue and profit pressure, with a forecasted revenue decline in FY2025Q4 of mid-double digits and a gross margin drop of 4-5 percentage points year-over-year [10]