How did Nike's revenue and expenses shift in Q3 2025?


Aime
Nike's revenue and expenses in Q3 2025 showed a notable decline in revenue with a slight increase in expenses, resulting in a significant drop in net income.
- Revenue Shift:
- Nike reported a 9% decrease in total revenue for Q3 2025, amounting to $11.26 billion1. This decline was observed across all regions, with a particularly significant fall in digital sales and wholesale revenues1.
- The contraction in revenue was reflected in the performance of Nike Direct, which saw a 12% reduction, and a 15% fall in Nike brand digital sales1.
- Specifically, Nike's subsidiary reported an 18% revenue drop, totaling $405 million for Q3 FY251.
- Expense Shift:
- Despite the revenue decline, Nike's selling and administrative expenses trimmed by 8% to $3.88 billion1.
- The company's gross profit fell by 16% to $4.67 billion, which was influenced by heightened discounting activity, increased reserves for inventory obsolescence, rising product costs, and shifts in the channel mix1.
- Gross margin contracted by 330 basis points to 41.5%, indicating a decrease in profitability margin1.
- Net Income Impact:
- Nike's net income took a substantial hit, dropping 32% to $794 million compared to $1.17 billion in the same period of the previous year1.
- The decline in gross margin and net income suggests that Nike is facing cost pressures and competitive pricing dynamics2.
- Other Financial Metrics:
- Nike's inventories decreased by 2% to $7.5 billion over the quarter1.
- The company's financial health is indicated by a sufficient liquidity position, as reflected by a current ratio of 2.22, which suggests the ability to meet short-term obligations3.
In conclusion, Nike experienced a challenging quarter with revenue declining by 9% and gross margins contracting, leading to a 32% drop in net income. Despite these setbacks, the company maintained its dividend payments, demonstrating long-term financial stability14.
Source:
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1.
Nike reports 9% revenue decline in Q3 of fiscal 2025
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