Nike Inc.

12/30/2025 | Press release | Distributed by Public on 12/30/2025 15:21

Quarterly Report for Quarter Ending NOVEMBER 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
NIKE designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide. We are the largest seller of athletic footwear and apparel in the world. We sell our products through two distribution channels: NIKE Direct operations which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world. Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories.
Our strategy is to achieve sustainable, profitable long-term revenue growth by leading with sport, creating innovative, "must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.
QUARTERLY FINANCIAL HIGHLIGHTS
•NIKE, Inc. Revenues were $12.4 billion for the second quarter of fiscal 2026, up 1% on a reported basis.
•NIKE Brand wholesale revenues were $7.5 billion for the second quarter of fiscal 2026 compared to $6.9 billion for the second quarter of fiscal 2025, primarily driven by an increase in North America, partially offset by declines in Greater China and Asia Pacific & Latin America ("APLA").
•NIKE Direct revenues were $4.6 billion for the second quarter of fiscal 2026 compared to $5.0 billion for the second quarter of fiscal 2025, primarily driven by a decrease in traffic in NIKE Brand Digital.
•Gross margin for the second quarter of fiscal 2026 decreased 300 basis points to 40.6% primarily due to higher tariffs in North America.
•Inventories as of November 30, 2025, were $7.7 billion, an increase of 3% compared to May 31, 2025, driven by increased product costs including higher tariffs in North America.
•We returned approximately $598 million to our shareholders in the second quarter of fiscal 2026 through dividends.
FACTORS IMPACTING OUR BUSINESS
We are navigating through several external factors that create uncertainty and volatility in the operating environment, including, but not limited to, geopolitical dynamics, tax regulation, fluctuating foreign currency exchange rates and evolving tariff policies. As a result of new tariffs, we expect a gross incremental cost of approximately $1.5 billion on an annualized basis. We are taking actions to mitigate the impact of new tariffs; however for fiscal 2026, we expect a negative impact on gross margin. We will continue to monitor changes to the import and export policies of the U.S. and other countries that could require us to change the way in which we do business. These factors, and any changes to these factors, among others, could have a material adverse impact on consumer behavior and on our future Revenues and overall profitability. For a discussion of these factors and other risks, refer to Risk Factors in Item 1A of Part 1 within our Annual Report on Form 10-K for the fiscal year ended May 31, 2025 (the "Annual Report").
Despite these factors, we are focused on driving distinction within key sports, building a complete product portfolio, creating stories to inspire and emotionally connect with consumers, and elevating and growing the entire marketplace as we continue to take actions across the following areas:
•Product Management: Accelerating product innovation and reducing the supply of certain footwear products in the marketplace to rebalance the mix of our footwear portfolio.
•Marketplace Management: Repositioning NIKE Brand Digital as a full-price platform and reinvesting in wholesale distribution. This includes liquidating inventory through increased markdowns across NIKE Direct, and higher sales returns and discounts with our wholesale partners to reduce inventory and create capacity for new product. We are also making investments to elevate the presentation of our brands in physical retail.
•Brand Management:Increasing investment in demand creation, including brand marketing and sports marketing, to support key product launches and sports moments.
Our reportable operating segments are at different stages of progress against these actions and therefore, the timing of financial impacts have varied and we expect will continue to vary by segment. These actions have had, and in the future will have, a negative impact on our Revenues and overall profitability. North America has made the most progress against these actions, while Greater China and Converse will take more time. In Greater China, a trend of declining store traffic, elevated promotional activity and higher levels of inventory across the marketplace are negatively impacting revenues and overall profitability, while Converse is in the midst of a strategic reset of the brand and marketplace. We expect negative impacts from Greater China and Converse to continue throughout fiscal 2026. However, we believe these product, marketplace and brand management actions taken across our portfolio will reignite brand momentum and reposition our business to drive long-term shareholder value.
USE OF NON-GAAP FINANCIAL MEASURES
Throughout this Quarterly Report on Form 10-Q, we discuss non-GAAP financial measures, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). References to these measures should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Management uses these non-GAAP measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing our underlying business performance and trends.
Earnings Before Interest and Taxes ("EBIT"):Calculated as Net income before Interest (income) expense, net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. Total NIKE, Inc. EBIT for the three and six months ended November 30, 2025 and November 30, 2024 are as follows:
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 2025 2024
Net income $ 792 $ 1,163 $ 1,519 $ 2,214
Add: Interest (income) expense, net
(9) (24) (27) (67)
Add: Income tax expense 207 253 402 509
EARNINGS BEFORE INTEREST AND TAXES
$ 990 $ 1,392 $ 1,894 $ 2,656
EBIT margin:Calculated as total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues. Our EBIT margin calculations for the three and six months ended November 30, 2025 and November 30, 2024 are as follows:
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 2025 2024
Numerator
Earnings before interest and taxes $ 990 $ 1,392 $ 1,894 $ 2,656
Denominator
Total NIKE, Inc. Revenues $ 12,427 $ 12,354 $ 24,147 $ 23,943
EBIT MARGIN
8.0 % 11.3 % 7.8 % 11.1 %
Currency-neutral revenues:Currency-neutral revenues enhance visibility to underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Currency-neutral revenues are calculated using actual exchange rates in use during the comparative prior year period in place of the exchange rates in use during the current period.
COMPARABLE STORE SALES
Comparable store sales:This key metric, which excludes NIKE Brand Digital sales, comprises revenues from NIKE-owned in-line and factory stores for which all three of the following requirements have been met: (1) the store has been open at least one year, (2) square footage has not changed by more than 15% within the past year and (3) the store has not been permanently repositioned within the past year. Comparable store sales represents a performance metric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions. The method of calculating comparable store sales varies across the retail industry. As a result, our calculation of this metric may not be comparable to similarly titled metrics used by other companies.
RESULTS OF OPERATIONS
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions, except per share data) 2025 2024 % CHANGE 2025 2024 % CHANGE
Revenues $ 12,427 $ 12,354 1 % $ 24,147 $ 23,943 1 %
Cost of sales 7,382 6,965 6 % 14,159 13,297 6 %
Gross profit 5,045 5,389 -6 % 9,988 10,646 -6 %
Gross margin 40.6 % 43.6 % 41.4 % 44.5 %
Demand creation expense 1,273 1,122 13 % 2,461 2,348 5 %
Operating overhead expense 2,766 2,883 -4 % 5,594 5,705 -2 %
Total selling and administrative expense 4,039 4,005 1 % 8,055 8,053 0 %
% of revenues 32.5 % 32.4 % 33.4 % 33.6 %
Interest (income) expense, net
(9) (24) - (27) (67) -
Other (income) expense, net 16 (8) - 39 (63) -
Income before income taxes 999 1,416 -29 % 1,921 2,723 -29 %
Income tax expense 207 253 -18 % 402 509 -21 %
Effective tax rate 20.7 % 17.9 % 20.9 % 18.7 %
NET INCOME $ 792 $ 1,163 -32 % $ 1,519 $ 2,214 -31 %
Diluted earnings per common share $ 0.53 $ 0.78 -32 % $ 1.03 $ 1.48 -30 %
CONSOLIDATED OPERATING RESULTS
REVENUES
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
2025 2024 % CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
NIKE, Inc. Revenues:
NIKE Brand Revenues by:
Footwear $ 7,659 $ 7,655 0 % -1 % $ 15,069 $ 15,117 0 % -2 %
Apparel 3,906 3,738 4 % 4 % 7,219 6,770 7 % 5 %
Equipment 550 544 1 % 0 % 1,180 1,147 3 % 1 %
Global Brand Divisions(2)
9 13 -31 % -23 % 18 27 -33 % -32 %
TOTAL NIKE BRAND REVENUES
12,124 11,950 1 % 1 % 23,486 23,061 2 % 1 %
Converse 300 429 -30 % -31 % 666 930 -28 % -29 %
Corporate(3)
3 (25) - - (5) (48) - -
TOTAL NIKE, INC. REVENUES $ 12,427 $ 12,354 1 % 0 % $ 24,147 $ 23,943 1 % -1 %
Supplemental NIKE Brand Revenues Details:
NIKE Brand Revenues by:
Sales to Wholesale Customers $ 7,499 $ 6,920 8 % 8 % $ 14,338 $ 13,330 8 % 6 %
Sales through NIKE Direct 4,616 5,017 -8 % -9 % 9,130 9,704 -6 % -7 %
Global Brand Divisions(2)
9 13 -31 % -23 % 18 27 -33 % -32 %
TOTAL NIKE BRAND REVENUES $ 12,124 $ 11,950 1 % 1 % $ 23,486 $ 23,061 2 % 1 %
(1)The percent change excluding currency changes represents a non-GAAP financial measure. For additional information, see "Use of Non-GAAP Financial Measures".
(2)Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
(3)Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•NIKE, Inc. Revenues for the second quarter of fiscal 2026 were $12.4 billion, up 1% on a reported basis. On a currency-neutral basis, NIKE, Inc. Revenues were flat,primarily due to higher revenues in North America, which increased NIKE, Inc. Revenues by approximately 4 percentage points. Lower revenues in Greater China, Converse and APLAreduced NIKE, Inc. Revenues by approximately 2, 1 and 1 percentage points, respectively.
•NIKE Brand revenues increased 1% on both a reported and currency-neutral basis.
•NIKE Brand footwear revenues decreased 1% on a currency-neutral basis. Unit sales of footwear were flat, while lower average selling price ("ASP") per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to channel mix and higher discounts, partially offset by product mix and strategic pricing.
•NIKE Brand apparel revenues increased 4% on a currency-neutral basis. Unit sales of apparel increased 4%, while ASP per unit was flat as higher discounts and channel mix were offset primarily by product mix.
•NIKE Brand wholesale revenues increased 8% on both a reported and currency-neutral basis. The increase on a currency-neutral basis was driven by higher revenues in North America, partially offset by lower revenues in Greater China and APLA.
•NIKE Direct revenues were $4.6 billion for the second quarter of fiscal 2026, down 8% on a reported basis and down 9% on a currency-neutral basis, due to declines in NIKE Brand Digital sales of 14% and declines in NIKE stores sales of 3%. NIKE Brand Digital sales were $2.4 billion for the second quarter of fiscal 2026 compared to $2.8 billion for the second quarter of fiscal 2025, with declines primarily due to reduced traffic. Comparable store sales decreased 3%. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales".
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•NIKE, Inc. Revenues for the first six months of fiscal 2026 were $24.1 billion, up 1% on a reported basis. On a currency-neutral basis, NIKE, Inc. Revenues decreased 1%, primarily due to lower revenues in Greater China, Converse and APLA, which reduced NIKE, Inc. Revenues by approximately 2, 1 and 1 percentage points, respectively. Higher revenues in North America increased NIKE, Inc. Revenues by approximately 3 percentage points.
•NIKE Brand revenues increased 2% on a reported basis and 1% on a currency-neutral basis.
•NIKE Brand footwear revenues decreased 2% on a currency-neutral basis. Unit sales of footwear increased 1%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to channel mix and higher discounts, partially offset by product mix and strategic pricing.
•NIKE Brand apparel revenues increased 5% on a currency-neutral basis. Unit sales of apparel increased 7%, while lower ASP per unit reduced apparel revenues by approximately 2 percentage points. Lower ASP per unit was primarily due to higher discounts and channel mix, partially offset by product mix.
•NIKE Brand wholesale revenues increased 8% on a reported basis and 6% on a currency-neutral basis. The increase on a currency-neutral basis was driven by higher revenues in North America and Europe, Middle East & Africa ("EMEA") and APLA, partially offset by lower revenues in Greater China.
•NIKE Direct revenues were $9.1 billion for the first six months of fiscal 2026, down 6% on a reported basis and down 7% on a currency-neutral basis, due to declines in NIKE Brand Digital sales of 13% and declines in NIKE stores sales of 2%. NIKE Brand Digital sales were $4.5 billion in the second quarter of fiscal 2026 compared to $5.1 billion in the second quarter of fiscal 2025, with declines primarily due to reduced traffic. Comparable store sales decreased 2%.
GROSS MARGIN
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE 2025 2024 % CHANGE
Gross profit $ 5,045 $ 5,389 -6 % $ 9,988 $ 10,646 -6 %
Gross margin 40.6 % 43.6 % -300 bps 41.4 % 44.5 % -310 bps
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Consolidated gross margin was 300 basis points lower than the prior year primarily due to:
•Higher NIKE Brand product costs (decreasing gross margin approximately 360 basis points), primarily due to higher tariffs in North America;
•Lower NIKE Brand ASP (decreasing gross margin approximately 50 basis points), primarily due to channel mix and higher discounts, partially offset by strategic pricing; and
•Lower gross margin from Converse (decreasing gross margin approximately 20 basis points).
This was partially offset by:
•Lower warehousing and logistics costs (increasing gross margin approximately 50 basis points), primarily due to channel mix;
•Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 40 basis points); and
•Lower other costs (increasing gross margin approximately 40 points), primarily due to lower inventory obsolescence reserves.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Consolidated gross margin was 310 basis points lower than the prior year primarily due to:
•Higher NIKE Brand product costs (decreasing gross margin approximately 230 basis points), primarily due to higher tariffs in North America;
•Lower NIKE Brand ASP (decreasing gross margin approximately 150 basis points), primarily due to channel mix and higher discounts, partially offset by strategic pricing; and
•Lower gross margin from Converse (decreasing gross margin approximately 30 basis points).
This was partially offset by:
•Lower warehousing and logistics costs (increasing gross margin approximately 50 basis points), primarily due to channel mix; and
•Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 30 basis points).
TOTAL SELLING AND ADMINISTRATIVE EXPENSE
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE 2025 2024 % CHANGE
Demand creation expense(1)
$ 1,273 $ 1,122 13 % $ 2,461 $ 2,348 5 %
Operating overhead expense(2)
2,766 2,883 -4 % 5,594 5,705 -2 %
Total selling and administrative expense $ 4,039 $ 4,005 1 % $ 8,055 $ 8,053 - %
% of revenues 32.5 % 32.4 % 10 bps 33.4 % 33.6 % -20 bps
(1)Demand creation expense consists of brand marketing expense and sports marketing expense. Brand marketing expense includes advertising and promotion costs such as production and media costs, digital marketing expense, brand events and retail brand presentation costs. Sports marketing expense includes expenses related to endorsement contracts, complimentary product and sports marketing events.
(2)Operating overhead expense consists primarily of wage and benefit-related expenses and other administrative costs, such as research and development costs, bad debt expense, rent, depreciation and amortization and costs related to professional services, certain technology investments, meetings and travel.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Demand creation expense increased 13% due to higher brand marketing expense and higher sports marketing expense. Changes in foreign currency exchange rates increased Demand creation expense by approximately 1 percentage point.
Operating overhead expense decreased 4% due to lower wage-related expense and lower other administrative costs. Changes in foreign currency exchange rates increased Operating overhead expense by approximately 1 percentage point.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Demand creation expense increased 5% primarily due to higher sports marketing expense. Changes in foreign currency exchange rates increased Demand creation expense by approximately 1 percentage point.
Operating overhead expense decreased 2% due to lower other administrative costs, partially offset by higher wage-related expense. Changes in foreign currency exchange rates increased Operating overhead expense by approximately 1 percentage point.
OTHER (INCOME) EXPENSE, NET
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 2025 2024
Other (income) expense, net $ 16 $ (8) $ 39 $ (63)
Other (income) expense, net comprises foreign currency conversion gains and losses from the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, as well as unusual or non-operating transactions outside the normal course of business.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Other (income) expense, net decreased from $8 million of other income, net, to $16 million of other expense, net, primarily due to an unfavorable net change in foreign currency conversion gains and losses, including hedges.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Other (income) expense, net decreased from $63 million of other income, net, to $39 million of other expense, net, primarily due to an unfavorable net change in foreign currency conversion gains and losses, including hedges.
INCOME TAXES
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
2025 2024 % CHANGE 2025 2024 % CHANGE
Effective tax rate 20.7 % 17.9 % 280 bps 20.9 % 18.7 % 220 bps
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Our effective tax rate increased from 17.9% to 20.7%, primarily due to changes in earnings mix.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Our effective tax rate increased from 18.7% to 20.9%, primarily due to changes in earnings mix and decreased benefits from stock-based compensation.
For additional information, refer to Note 4 - Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
SEGMENT INFORMATION
See Note 10 - Segment Information in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for a description of our segments and related information.
The breakdown of Revenues is as follows:
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
2025 2024 % CHANGE
% CHANGE EXCLUDING CURRENCY CHANGES(1)
North America $ 5,633 $ 5,179 9 % 9 % $ 10,653 $ 10,005 6 % 7 %
Europe, Middle East & Africa 3,392 3,303 3 % -1 % 6,723 6,446 4 % 0 %
Greater China 1,423 1,711 -17 % -16 % 2,935 3,377 -13 % -13 %
Asia Pacific & Latin America 1,667 1,744 -4 % -4 % 3,157 3,206 -2 % -2 %
Global Brand Divisions(2)
9 13 -31 % -23 % 18 27 -33 % -32 %
TOTAL NIKE BRAND 12,124 11,950 1 % 1 % 23,486 23,061 2 % 1 %
Converse 300 429 -30 % -31 % 666 930 -28 % -29 %
Corporate(3)
3 (25) - - (5) (48) - -
TOTAL NIKE, INC. REVENUES $ 12,427 $ 12,354 1 % 0 % $ 24,147 $ 23,943 1 % -1 %
(1)The percent change excluding currency changes represents a non-GAAP financial measure. For additional information, see "Use of Non-GAAP Financial Measures".
(2)Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
(3)Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
The primary financial measure used to evaluate performance of our individual reportable operating segments is EBIT. For additional information on our segments, refer to Note 10 - Segment Information in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
The breakdown of EBIT is as follows:
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE 2025 2024 % CHANGE
North America $ 1,261 $ 1,371 -8 % $ 2,395 $ 2,587 -7 %
Europe, Middle East & Africa 733 831 -12 % 1,468 1,623 -10 %
Greater China 191 375 -49 % 568 877 -35 %
Asia Pacific & Latin America 389 460 -15 % 739 862 -14 %
Global Brand Divisions (1,072) (1,133) 5 % (2,264) (2,360) 4 %
TOTAL NIKE BRAND(1)
1,502 1,904 -21 % 2,906 3,589 -19 %
Converse (4) 53 -108 % 35 174 -80 %
Corporate
(508) (565) 10 % (1,047) (1,107) 5 %
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)
990 1,392 -29 % 1,894 2,656 -29 %
EBIT margin(1)
8.0 % 11.3 % 7.8 % 11.1 %
Interest (income) expense, net (9) (24) - (27) (67) -
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 999 $ 1,416 -29 % $ 1,921 $ 2,723 -29 %
(1)Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin represent non-GAAP financial measures. For additional information, see "Use of Non-GAAP Financial Measures".
NORTH AMERICA
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 3,542 $ 3,236 9 % 9 % $ 6,761 $ 6,448 5 % 5 %
Apparel 1,811 1,693 7 % 7 % 3,285 3,024 9 % 9 %
Equipment 280 250 12 % 12 % 607 533 14 % 14 %
TOTAL REVENUES $ 5,633 $ 5,179 9 % 9 % $ 10,653 $ 10,005 6 % 7 %
Revenues by:
Sales to Wholesale Customers $ 3,550 $ 2,866 24 % 24 % $ 6,286 $ 5,341 18 % 18 %
Sales through NIKE Direct 2,083 2,313 -10 % -10 % 4,367 4,664 -6 % -6 %
TOTAL REVENUES $ 5,633 $ 5,179 9 % 9 % $ 10,653 $ 10,005 6 % 7 %
Cost of Sales 3,335 2,896 15 % 6,232 5,523 13 %
Gross profit 2,298 2,283 1 % 4,421 4,482 -1 %
Gross margin 40.8 % 44.1 % -330 bps 41.5 % 44.8 % -330 bps
Demand creation expense 473 382 24 % 915 834 10 %
Operating overhead expense 565 531 6 % 1,112 1,060 5 %
Total selling and administrative expense 1,038 913 14 % 2,027 1,894 7 %
Other segment items (1) (1) - (1) 1 -
EARNINGS BEFORE INTEREST AND TAXES $ 1,261 $ 1,371 -8 % $ 2,395 $ 2,587 -7 %
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•North America revenues increased 9% on a currency-neutral basis. Wholesale revenues increased 24%, primarily driven by the impacts of our marketplace management actions in both the current and prior year, expanded distribution in the current year, as well as shipment growth to existing partners. NIKE Direct revenues decreased 10% due to declines in digital sales of 16% and declines in store sales of 2%. Comparable store sales decreased 1%.
•Footwear revenues increased 9% on a currency-neutral basis. Unit sales of footwear increased 14%, while lower ASP per pair reduced footwear revenues by approximately 5 percentage points. Lower ASP per pair was primarily due to channel mix, partially offset by product mix and strategic pricing.
•Apparel revenues increased 7% on a currency-neutral basis. Unit sales of apparel increased 3%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to product mix and lower discounts, partially offset by channel mix.
Reported EBIT decreased 8% reflecting higher reported revenues more than offset by:
•Gross margin contraction of 330 basis points, primarily due to new tariffs, partially offset by lower warehousing and logistics costs due to channel mix, and lower inventory obsolescence reserves. ASP was flat as product mix and strategic pricing were offset primarily by channel mix.
•Demand creation expense increased 24% due to higher brand marketing expense and higher sports marketing expense.
•Operating overhead expense increased 6% due to higher other administrative costs and higher wage-related expense.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•North America revenues increased 7% on a currency-neutral basis. Wholesale revenues increased 18%, primarily driven by the impacts of our marketplace management actions and expanded distribution in the current year. NIKE Direct revenues decreased 6% due to declines in digital sales of 13% and declines in store sales of 1%. Comparable store sales decreased 1%.
•Footwear revenues increased 5% on a currency-neutral basis. Unit sales of footwear increased 10%, while lower ASP per pair reduced footwear revenues by approximately 5 percentage points. Lower ASP per pair was primarily due to channel mix and higher discounts, partially offset by strategic pricing.
•Apparel revenues increased 9% on a currency-neutral basis. Unit sales of apparel increased 9%, while ASP per unit was flat as product mix and lower discounts were primarily offset by channel mix.
Reported EBIT decreased 7% reflecting higher reported revenues more than offset by the following:
•Gross margin contraction of 330 basis points, primarily due to new tariffs and lower ASP, partially offset by lower warehousing and logistics costs due to channel mix and lower inventory obsolescence reserves. Lower ASP primarily reflects channel mix and higher discounts, partially offset by strategic pricing.
•Demand creation expense increased 10% due to higher brand marketing expense and higher sports marketing expense.
•Operating overhead expense increased 5% due to higher wage-related expense and higher other administrative costs.
EUROPE, MIDDLE EAST & AFRICA
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 2,012 $ 1,982 2 % -2 % $ 4,033 $ 3,934 3 % -2 %
Apparel 1,196 1,136 5 % 1 % 2,302 2,129 8 % 3 %
Equipment 184 185 -1 % -5 % 388 383 1 % -4 %
TOTAL REVENUES $ 3,392 $ 3,303 3 % -1 % $ 6,723 $ 6,446 4 % 0 %
Revenues by:
Sales to Wholesale Customers $ 2,188 $ 2,120 3 % 0 % $ 4,449 $ 4,194 6 % 2 %
Sales through NIKE Direct 1,204 1,183 2 % -3 % 2,274 2,252 1 % -4 %
TOTAL REVENUES $ 3,392 $ 3,303 3 % -1 % $ 6,723 $ 6,446 4 % 0 %
Cost of Sales 1,925 1,788 8 % 3,825 3,483 10 %
Gross profit 1,467 1,515 -3 % 2,898 2,963 -2 %
Gross margin 43.2 % 45.9 % -270 bps 43.1 % 46.0 % -290 bps
Demand creation expense 334 313 7 % 647 603 7 %
Operating overhead expense 399 372 7 % 781 738 6 %
Total selling and administrative expense 733 685 7 % 1,428 1,341 6 %
Other segment items 1 (1) - 2 (1) -
EARNINGS BEFORE INTEREST AND TAXES $ 733 $ 831 -12 % $ 1,468 $ 1,623 -10 %
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•EMEA revenues decreased 1% on a currency-neutral basis. Wholesale revenues were flat. NIKE Direct revenues decreased 3% due to declines in digital sales of 2% and declines in store sales of 5%. Comparable store sales decreased 3%.
•Footwear revenues decreased 2% on a currency-neutral basis. Unit sales of footwear were flat, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points. Lower ASP per pair was primarily due to higher discounts, partially offset by product mix.
•Apparel revenues increased 1% on a currency-neutral basis. Unit sales of apparel increased 7%, while lower ASP per unit reduced apparel revenues by approximately 6 percentage points. Lower ASP per unit was primarily due to higher discounts and product mix.
Reported EBIT decreased 12% reflecting higher reported revenues more than offset by:
•Gross margin contraction of 270 basis points, primarily due to lower ASP, reflecting higher discounts and higher product costs, partially offset by lower warehousing and logistics costs and lower inventory obsolescence reserves.
•Demand creation expense increased 7% primarily due to higher brand marketing expense and unfavorable changes in foreign currency exchange rates.
•Operating overhead expense increased 7% primarily due to unfavorable changes in foreign currency exchange rates.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•EMEA revenues were flat on a currency-neutral basis. Wholesale revenues increased 2%. NIKE Direct revenues decreased 4% due to declines in digital sales of 7% and declines in store sales of 2%. Comparable store sales increased 1%.
•Footwear revenues decreased 2% on a currency-neutral basis. Unit sales of footwear increased 2%, while lower ASP per pair reduced footwear revenues by approximately 4 percentage points. Lower ASP per pair was primarily due to higher discounts, partially offset by product mix.
•Apparel revenues increased 3% on a currency-neutral basis. Unit sales of apparel increased 8%, while lower ASP per unit reduced apparel revenues by approximately 5 percentage points. Lower ASP per unit was primarily due to higher discounts.
Reported EBIT decreased 10% reflecting higher reported revenues more than offset by:
•Gross margin contraction of 290 basis points, primarily due to lower ASP, reflecting higher discounts and higher product costs, partially offset by lower warehousing and logistics costs and lower inventory obsolescence reserves.
•Demand creation expense increased 7% due to unfavorable changes in foreign currency exchange rates and higher sports marketing expense, partially offset by lower brand marketing expense, reflecting higher investment in key sports events in the prior year.
•Operating overhead expense increased 6% primarily due to unfavorable changes in foreign currency exchange rates.
GREATER CHINA
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 954 $ 1,203 -21 % -20 % $ 2,063 $ 2,449 -16 % -16 %
Apparel 442 472 -6 % -6 % 804 832 -3 % -3 %
Equipment 27 36 -25 % -24 % 68 96 -29 % -30 %
TOTAL REVENUES $ 1,423 $ 1,711 -17 % -16 % $ 2,935 $ 3,377 -13 % -13 %
Revenues by:
Sales to Wholesale Customers $ 767 $ 904 -15 % -15 % $ 1,660 $ 1,875 -11 % -12 %
Sales through NIKE Direct 656 807 -19 % -18 % 1,275 1,502 -15 % -15 %
TOTAL REVENUES $ 1,423 $ 1,711 -17 % -16 % $ 2,935 $ 3,377 -13 % -13 %
Cost of Sales
836 957 -13 % 1,634 1,812 -10 %
Gross profit
587 754 -22 % 1,301 1,565 -17 %
Gross margin
41.3 % 44.1 % -280 bps 44.3 % 46.3 % -200 bps
Demand creation expense
145 135 7 % 244 249 -2 %
Operating overhead expense
252 252 0 % 490 492 0 %
Total selling and administrative expense
397 387 3 % 734 741 -1 %
Other segment items
(1) (8) - (1) (53) -
EARNINGS BEFORE INTEREST AND TAXES $ 191 $ 375 -49 % $ 568 $ 877 -35 %
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•Greater China revenues decreased 16% on a currency-neutral basis. Wholesale revenues decreased 15%. NIKE Direct revenues decreased 18% due to declines in digital sales of 36% and declines in store sales of 5%. Comparable store sales decreased 7%.
•Footwear revenues decreased 20% on a currency-neutral basis. Unit sales of footwear decreased 20%, while ASP per pair was flat as channel mix was offset by lower discounts.
•Apparel revenues decreased 6% on a currency-neutral basis. Unit sales of apparel decreased 12%, while higher ASP per unit increased apparel revenues by approximately 6 percentage points. Higher ASP per unit was primarily due to product mix, lower discounts and channel mix.
Reported EBIT decreased 49% reflecting lower reported revenues and the following:
•Gross margin contraction of 280 basis points, primarily due to higher inventory obsolescence reserves and higher product costs, driven by product mix, partially offset by higher ASP.
•Demand creation expense increased 7%, primarily due to higher brand marketing expense.
•Operating overhead expense was flat as higher wage-related expense was offset by lower other administrative costs.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•Greater China revenues decreased 13% on a currency-neutral basis. Wholesale revenues decreased 12%. NIKE Direct revenues decreased 15% due to declines in digital sales of 33% and declines in store sales of 5%. Comparable store sales decreased 6%.
•Footwear revenues decreased 16% on a currency-neutral basis. Unit sales of footwear decreased 15%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to channel mix.
•Apparel revenues decreased 3% on a currency-neutral basis. Unit sales of apparel decreased 6%, while higher ASP per unit contributed approximately 3 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to product mix, partially offset by higher discounts.
Reported EBIT decreased 35% reflecting lower reported revenues and the following:
•Gross margin contraction of 200 basis points, primarily due to higher inventory obsolescence reserves and higher product costs, driven by product mix.
•Demand creation expense decreased 2%, primarily due to lower brand marketing expense, reflecting higher investment in key sports events in the prior year.
•Operating overhead expense was flat as lower other administrative costs were offset by higher wage-related expense.
ASIA PACIFIC & LATIN AMERICA
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 1,151 $ 1,234 -7 % -7 % $ 2,212 $ 2,286 -3 % -3 %
Apparel 457 437 5 % 6 % 828 785 5 % 6 %
Equipment 59 73 -19 % -18 % 117 135 -13 % -13 %
TOTAL REVENUES $ 1,667 $ 1,744 -4 % -4 % $ 3,157 $ 3,206 -2 % -2 %
Revenues by:
Sales to Wholesale Customers $ 994 $ 1,030 -3 % -3 % $ 1,943 $ 1,920 1 % 1 %
Sales through NIKE Direct 673 714 -6 % -5 % 1,214 1,286 -6 % -6 %
TOTAL REVENUES $ 1,667 $ 1,744 -4 % -4 % $ 3,157 $ 3,206 -2 % -2 %
Cost of Sales 964 977 -1 % 1,802 1,759 2 %
Gross profit 703 767 -8 % 1,355 1,447 -6 %
Gross margin 42.2 % 44.0 % -180 bps 42.9 % 45.1 % -220 bps
Demand creation expense 109 98 11 % 206 188 10 %
Operating overhead expense 206 209 -1 % 414 397 4 %
Total selling and administrative expense 315 307 3 % 620 585 6 %
Other segment items (1) - - (4) - -
EARNINGS BEFORE INTEREST AND TAXES $ 389 $ 460 -15 % $ 739 $ 862 -14 %
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•APLA revenues decreased 4% on a currency-neutral basis primarily due to lower revenues in Southeast Asia & India ("SEA&I"), Japan and Korea, partially offset by higher revenues in Pacific and Central & South America ("CASA"). Wholesale revenues decreased 3%. NIKE Direct revenues decreased 5% due to declines in digital sales of 10%, partially offset by an increase in store sales of 1%. Comparable store sales decreased 3%.
•Footwear revenues decreased 7% on a currency-neutral basis. Unit sales of footwear decreased 7%, while ASP per pair was flat as product mix and strategic pricing were offset primarily by higher discounts.
•Apparel revenues increased 6% on a currency-neutral basis. Unit sales of apparel increased 7%, while lower ASP per unit reduced apparel revenues by approximately 1 percentage point. Lower ASP per unit was primarily due to higher discounts and channel mix, partially offset by product mix and strategic pricing.
Reported EBIT decreased 15% reflecting lower reported revenues and the following:
•Gross margin contraction of approximately 180 basis points, primarily due to higher product costs and unfavorable changes in standard foreign currency exchange rates.
•Demand creation expense increased 11%, primarily due to higher sports marketing expense and higher brand marketing expense.
•Operating overhead expense decreased 1%, primarily due to lower other administrative costs, partially offset by higher wage-related expense.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•APLA revenues decreased 2% on a currency-neutral basis primarily due to lower revenues in SEA&I, Korea and Japan, partially offset by higher revenues in CASA and Pacific. Wholesale revenues increased 1%. NIKE Direct revenues decreased 6% due to declines in digital sales of 9% and declines in store sales of 2%. Comparable store sales decreased 5%.
•Footwear revenues decreased 3% on a currency-neutral basis. Unit sales of footwear decreased 2%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to higher discounts and channel mix.
•Apparel revenues increased 6% on a currency-neutral basis. Unit sales of apparel increased 8%, while lower ASP per unit reduced apparel revenues by approximately 2 percentage points. Lower ASP per unit was primarily due to higher discounts and channel mix, partially offset by product mix and strategic pricing.
Reported EBIT decreased 14% reflecting lower reported revenues and the following:
•Gross margin contraction of approximately 220 basis points, primarily due to lower ASP, unfavorable changes in standard foreign currency exchange rates and higher product costs.
•Demand creation expense increased 10%, primarily due to higher sports marketing expense and higher brand marketing expense.
•Operating overhead expense increased 4%, primarily due to higher wage-related expense.
GLOBAL BRAND DIVISIONS
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE 2025 2024 % CHANGE
Revenues $ 9 $ 13 -31 % $ 18 $ 27 -33 %
Cost of Sales 152 147 3 % 320 300 7 %
Gross profit (143) (134) -7 % (302) (273) -11 %
Demand creation expense 185 147 26 % 388 389 0 %
Operating overhead expense 744 851 -13 % 1,575 1,697 -7 %
Total selling and administrative expense 929 998 -7 % 1,963 2,086 -6 %
Other segment items - 1 - (1) 1 -
EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (1,072) $ (1,133) 5 % $ (2,264) $ (2,360) 4 %
Global Brand Divisions primarily represents costs, including product creation and design expenses, that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Global Brand Divisions' loss before interest and taxes decreased 5%, primarily due to lower Operating overhead expense, partially offset by higher Demand creation expense. Demand creation expense increased 26%, primarily due to higher brand marketing expense and higher sports marketing expense. Operating overhead expense decreased 13%, primarily due to lower wage-related expense and lower other administrative costs.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Global Brand Divisions' loss before interest and taxes decreased 4%, primarily due to lower Operating overhead expense. Demand creation expense was flat as lower brand marketing expense, reflecting higher investment in key sports events in the prior year, was offset by higher sports marketing expense. Operating overhead expense decreased 7%, primarily due to lower other administrative costs and lower wage-related expense.
CONVERSE
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2025 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 255 $ 364 -30 % -31 % $ 574 $ 800 -28 % -29 %
Apparel 15 $ 26 -42 % -41 % 27 $ 43 -37 % -38 %
Equipment 5 $ 6 -17 % -19 % 13 $ 18 -28 % -29 %
Other(1)
25 $ 33 -24 % -24 % 52 $ 69 -25 % -26 %
TOTAL REVENUES $ 300 $ 429 -30 % -31 % $ 666 $ 930 -28 % -29 %
Revenues by:
Sales to Wholesale Customers $ 143 $ 212 -33 % -34 % $ 337 $ 488 -31 % -32 %
Sales through Direct to Consumer 132 $ 184 -28 % -29 % 277 $ 373 -26 % -27 %
Other(1)
25 $ 33 -24 % -25 % 52 $ 69 -25 % -25 %
TOTAL REVENUES $ 300 $ 429 -30 % -31 % $ 666 $ 930 -28 % -29 %
Cost of Sales
176 222 -21 % 369 455 -19 %
Gross profit
124 207 -40 % 297 475 -37 %
Gross margin 41.3 % 48.3 % -700 bps 44.6 % 51.1 % -650 bps
Demand creation expense
24 43 -44 % 57 78 -27 %
Operating overhead expense
104 111 -6 % 206 224 -8 %
Total selling and administrative expense
128 154 -17 % 263 302 -13 %
Other segment items
- - - (1) (1) -
EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (4) $ 53 -108 % $ 35 $ 174 -80 %
(1)Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
•Converse revenues decreased 31% on a currency-neutral basis driven by declines in all territories. Unit sales decreased 26%, while lower ASP reduced revenues by approximately 5 percentage points. Lower ASP per unit was primarily due to higher discounts and product mix.
•Wholesale revenues decreased 34% on a currency-neutral basis, driven by declines in all territories.
•Direct to consumer revenues decreased 29% on a currency-neutral basis, reflecting reduced traffic in North America and Western Europe.
Reported EBIT decreased 108% reflecting lower reported revenues and the following:
•Gross margin contraction of approximately 700 basis points, primarily due to lower ASP, reflecting higher discounts and higher product costs.
•Demand creation expense decreased 44%, primarily due to lower brand marketing expense.
•Operating overhead expense decreased 6%, primarily due to lower other administrative costs.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
•Converse revenues decreased 29% on a currency-neutral basis driven by declines in all territories. Unit sales decreased 24%, while lower ASP reduced revenues by approximately 6 percentage points. Lower ASP per unit was primarily due to higher discounts and product mix.
•Wholesale revenues decreased 32% on a currency-neutral basis, driven by declines in all territories.
•Direct to consumer revenues decreased 27% on a currency-neutral basis, reflecting reduced traffic in North America and Western Europe.
Reported EBIT decreased 80% reflecting lower reported revenues and the following:
•Gross margin contraction of approximately 650 basis points, primarily due to lower ASP, reflecting higher discounts and higher product costs.
•Demand creation expense decreased 27%, primarily due to lower brand marketing expense.
•Operating overhead expense decreased 8%, primarily due to lower other administrative costs.
CORPORATE
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2025 2024 % CHANGE 2025 2024 % CHANGE
Revenues $ 3 $ (25) - $ (5) $ (48) -
Cost of Sales (6) (22) - (23) (35) -
Gross profit 9 (3) - 18 (13) -
Demand creation expense 3 4 -25 % 4 7 -43 %
Operating overhead expense 496 557 -11 % 1,016 1,097 -7 %
Total selling and administrative expense 499 561 -11 % 1,020 1,104 -8 %
Other segment items 18 1 - 45 (10) -
EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (508) $ (565) 10 % $ (1,047) $ (1,107) 5 %
Corporate primarily consists of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to our corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses.
Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
In addition to the foreign currency gains and losses recognized within Corporate revenues, foreign currency results in Corporate include gains and losses resulting from the difference between actual foreign currency exchange rates and standard rates used to record non-functional currency denominated product purchases within the NIKE Brand geographic operating segments and Converse; related foreign currency hedge results; conversion gains and losses arising from remeasurement of monetary assets and liabilities in non-functional currencies; and certain other foreign currency derivative instruments.
SECOND QUARTER OF FISCAL 2026 COMPARED TO SECOND QUARTER OF FISCAL 2025
Corporate's loss before interest and taxes decreased $57 million, primarily due to the following:
•a favorable change of $61 million in Operating overhead expense primarily related to lower wage-related expense and lower other administrative costs;
•a favorable change in net foreign currency gains and losses of $20 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated Gross profit; and
•an unfavorable change of $28 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net.
FIRST SIX MONTHS OF FISCAL 2026 COMPARED TO FIRST SIX MONTHS OF FISCAL 2025
Corporate's loss before interest and taxes decreased $60 million, primarily due to the following:
•a favorable change of $81 million in Operating overhead expense primarily related to lower other administrative costs and lower wage-related expense;
•a favorable change in net foreign currency gains and losses of $37 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated Gross profit; and
•an unfavorable change of $65 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net.
FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES
OVERVIEW
As a global company with significant operations outside the United States, in the normal course of business we are exposed to risk arising from changes in currency exchange rates. Our primary foreign currency exposures arise from the recording of transactions denominated in non-functional currencies and the translation of foreign currency denominated results of operations, financial position and cash flows into U.S. Dollars.
Our foreign exchange risk management program is intended to lessen both the positive and negative effects of currency fluctuations on our consolidated results of operations, financial position and cash flows. We manage global foreign exchange risk centrally on a portfolio basis to address those risks material to NIKE, Inc. Our hedging policy is designed to partially or entirely offset the impact of exchange rate changes on the underlying net exposures being hedged. Where exposures are hedged, our program has the effect of delaying the impact of exchange rate movements on our Unaudited Condensed Consolidated Financial Statements; the length of the delay is dependent upon hedge horizons. We do not hold or issue derivative instruments for trading or speculative purposes. As of and for the three and six months ended November 30, 2025, there have been no material changes to our hedging program or strategy from what was disclosed within our Annual Report.
Refer to Note 3 - Fair Value Measurements and Note 7 - Risk Management and Derivatives in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end. For additional information about our Foreign Currency Exposures and Hedging Practices, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report.
TRANSACTIONAL EXPOSURES
We conduct business in various currencies and have transactions which subject us to foreign currency risk. Our most significant transactional foreign currency exposures are:
•Product Costs - Product purchases denominated in currencies other than the functional currency of the transacting entity and factory input costs from the foreign currency adjustments program with certain factories.
•Non-Functional Currency Denominated External Sales - A portion of our NIKE Brand and Converse revenues associated with European operations are earned in currencies other than the Euro (e.g., the British Pound) but are recognized at a subsidiary that uses the Euro as its functional currency. These sales generate a foreign currency exposure.
•Other Costs - Non-functional currency denominated costs, such as endorsement contracts, also generate foreign currency risk, though to a lesser extent.
•Non-Functional Currency Denominated Monetary Assets and Liabilities - Our global subsidiaries have various monetary assets and liabilities, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies. These balance sheet items are subject to remeasurement which may create fluctuations in Other (income) expense, net within our Unaudited Condensed Consolidated Statements of Income.
MANAGING TRANSACTIONAL EXPOSURES
Transactional exposures are managed on a portfolio basis within our foreign currency risk management program. We manage these exposures by taking advantage of natural offsets and currency correlations that exist within the portfolio and may also elect to use currency forward and option contracts to hedge the remaining effect of exchange rate fluctuations on probable forecasted future cash flows, including certain product cost exposures, non-functional currency denominated external sales and other costs described above. Generally, these are accounted for as cash flow hedges.
Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement are not formally designated as hedging instruments. Accordingly, changes in fair value of these instruments are recognized within Other (income) expense, net within our Unaudited Condensed Consolidated Statements of Income and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged.
TRANSLATIONAL EXPOSURES
Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar. Fluctuations in currency exchange rates create volatility in our reported results as we are required to translate the balance sheets, operational results and cash flows of these subsidiaries into U.S. Dollars for consolidated reporting. The translation of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S. Dollars for consolidated reporting results in a cumulative translation adjustment to Accumulated other comprehensive income (loss) within Shareholders' equity. The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a benefit of approximately $123 million and $336 million for the three and six months ended November 30, 2025, respectively. The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $27 million and $81 million for the three and six months ended November 30, 2025, respectively.
MANAGING TRANSLATIONAL EXPOSURES
To minimize the impact of translating foreign currency denominated revenues and expenses into U.S. Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S. Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S. GAAP. We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments and to mitigate exposure to forecasted future cash flows of certain intercompany transactions. The combination of these foreign currency exposures and the related hedging instruments has the effect of partially offsetting the year-over-year foreign currency translation impact on net earnings. These hedges are generally accounted for as cash flow hedges.
We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net, had no impact on our Income before income taxes for the three months ended November 30, 2025, and a favorable impact of approximately $17 million on our Income before income taxes for the six months ended November 30, 2025.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW ACTIVITY
SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)
2025 2024
$ CHANGE
Cash provided (used by):
Operations
$ 801 $ 1,443 $ (642)
Investing activities
(108) (240) 132
Financing activities
(1,177) (3,070) 1,893
Effect of exchange rate changes on cash and equivalents
(6) (14) 8
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
$ (490) $ (1,881) $ 1,391
Cash provided by operations decreased $642 million. This was driven by a decrease of $580 million in Net income, adjusted for non-cash items, and a decrease of $62 million related to changes in certain working capital components and other assets. The change in working capital was primarily driven by unfavorable changes in Accounts payable and Accounts receivable. The change in Accounts payable was primarily due to lower inventory purchases and the timing of payments, and the change in Accounts receivable was primarily due to increased wholesale revenues. This was partially offset by a change in Inventories due to lower purchases partially offset by increases in product costs, inclusive of higher tariffs in North America.
Cash used by investing activities decreased $132 million, primarily driven by the net change in short-term investments (including sales, maturities and purchases), partially offset by increased additions to Property, plant and equipment.
Cash used by financing activities decreased $1,893 million, primarily driven by lower share repurchases.
During the first six months of fiscal 2026, we purchased a total of 1.8 million shares of NIKE's Class B Common Stock for $122.4 million (an average price of $67.63 per share) under the four-year, $18 billion share repurchase program approved by the Board of Directors in June 2022. As of November 30, 2025, we had repurchased 124.4 million shares at a cost of approximately $12.1 billion (an average price of $97.57 per share) under this $18 billion share repurchase program. No shares were repurchased during the quarter ended November 30, 2025. We paused repurchases under this program during the first quarter of fiscal 2026, due to lower operating cash flows in the current year. The existing program remains authorized by the Board of Directors and we may resume share repurchases in the future at any time, depending upon market conditions, our liquidity and capital needs and other factors. We continue to expect funding of any future share repurchases to come from operating cash flows and excess cash.
CAPITAL RESOURCES
On July 17, 2025, we filed a shelf registration statement (the "Shelf") with the U.S. Securities and Exchange Commission (the "SEC") which permits us to issue an unlimited amount of securities from time to time. The Shelf expires on July 17, 2028.
As of November 30, 2025, our committed credit facilities were unchanged from the information previously reported within our Annual Report. We currently have long-term debt ratings of A+ and A2 from Standard and Poor's Corporation and Moody's Investor Services, respectively. Any changes to these ratings could result in interest rate and facility fee changes. In November 2025, Moody's Investor Services downgraded our debt rating from A1 to A2. Despite the downgrade, our facility fees and interest rates remain unchanged. As of November 30, 2025, we were in full compliance with the covenants under our facilities and believe it is unlikely we will fail to meet any of the covenants in the foreseeable future. As of November 30, 2025 and May 31, 2025, no amounts were outstanding under our committed credit facilities.
Liquidity is also provided by our $3 billion commercial paper program. As of and for the three months ended November 30, 2025, we did not have any borrowings outstanding under our $3 billion program. We may issue commercial paper or other debt securities depending on general corporate needs.
To date, in fiscal 2026, we have not experienced difficulty accessing the capital or credit markets; however, future volatility may increase costs associated with issuing commercial paper or other debt instruments or affect our ability to access those markets.
As of November 30, 2025, we had Cash and equivalents and Short-term investments totaling $8.3 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S. Treasury obligations and other investment grade fixed-income securities. Our fixed-income investments are exposed to both credit and interest rate risk. All of our investments are investment grade to minimize our credit risk. While individual securities have varying durations, as of November 30, 2025, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 115 days.
We believe that existing Cash and equivalents, Short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs for the next twelve months and beyond.
There have been no significant changes to the material cash requirements previously reported.
CONTRACTUAL OBLIGATIONS
Refer to Note 11 - Commitments and Contingencies in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional information related to our bank guarantees and letters of credit.
OFF-BALANCE SHEET ARRANGEMENTS
As of November 30, 2025, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 - Summary of Significant Accounting Policies within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for recently adopted and issued accounting standards.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our Unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.
We believe the assumptions and judgments involved in the accounting estimates described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section within the Annual Report have the greatest potential impact on our Unaudited Condensed Consolidated Financial Statements, so we consider these to be our critical accounting estimates. Because of the uncertainty inherent in these matters, actual results could differ from these estimates. Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
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