Nike reports decline in Q3 revenue and earnings, despite 'Win Now' strategy

NIKE, Inc. released its fiscal 2025 third-quarter results, revealing a significant drop in revenue and earnings, even as the company reiterated its commitment to its "Win Now" strategic priorities.

The sportswear giant reported third-quarter revenues of $11.3 billion, a 9% decrease compared to the same period last year, and a 7% decline on a currency-neutral basis. NIKE Direct revenues fell by 12%, while wholesale revenues saw a 7% decrease.

A notable decline in gross margin, down 330 basis points to 41.5%, was attributed to higher discounts, increased inventory obsolescence reserves, rising product costs, and changes in channel mix. Diluted earnings per share stood at $0.54, a 30% decrease from the previous year.

"The progress we made against the 'Win Now' strategic priorities we committed to 90 days ago reinforces my confidence that we are on the right path," stated Elliott Hill, President and CEO of NIKE, Inc. "What's encouraging is NIKE made an impact this quarter leading with sport – through athlete storytelling, performance products and big sport moments."

Despite the revenue and earnings decline, Nike highlighted its efforts to drive brand momentum through sports marketing and athlete partnerships.

Matthew Friend, Executive Vice President and Chief Financial Officer, acknowledged the "dynamic operating environment" but emphasized Nike's focus on "serving athletes with new product innovation and re-igniting brand momentum through sport." He confirmed that the outlook for the second half of fiscal 2025 remains consistent with previous projections.

Key financial highlights include:

NIKE Brand revenues: $10.9 billion, down 9% (reported) and 6% (currency-neutral).
NIKE Direct revenues: $4.7 billion, down 12% (reported) and 10% (currency-neutral), driven by a 15% decrease in NIKE Brand Digital.
Wholesale revenues: $6.2 billion, down 7% (reported) and 4% (currency-neutral).
Gross margin: 41.5%, a decrease of 330 basis points.
Net income: $0.8 billion, down 32%.
Diluted earnings per share: $0.54, down 30%.

Nike also reported a decrease in inventories to $7.5 billion and a slight decrease in cash and equivalents and short-term investments to $10.4 billion. The company continued its shareholder return program, distributing approximately $1.1 billion through dividends and share repurchases.

The company reiterated its commitment to returning value to shareholders, having increased dividend payouts for 23 consecutive years.

Analysts will be closely watching Nike's performance in the coming quarters to see if the "Win Now" strategy can reverse the current downward trend.

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