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

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.

1. **Revenue Shift**:
- Nike reported a 9% decrease in total revenue for Q3 2025, amounting to $11.26 billion. This decline was observed across all regions, with a particularly significant fall in digital sales and wholesale revenues.
- 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 sales.
- Specifically, Nike's subsidiary reported an 18% revenue drop, totaling $405 million for Q3 FY25.
2. **Expense Shift**:
- Despite the revenue decline, Nike's selling and administrative expenses trimmed by 8% to $3.88 billion.
- 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 mix.
- Gross margin contracted by 330 basis points to 41.5%, indicating a decrease in profitability margin.
3. **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 year.
- The decline in gross margin and net income suggests that Nike is facing cost pressures and competitive pricing dynamics.
4. **Other Financial Metrics**:
- Nike's inventories decreased by 2% to $7.5 billion over the quarter.
- 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 obligations.

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 stability.