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Nike Inc Earnings - Analysis & Highlights for Q3 2025
Overview
PositivesNegativesOutlook
- Performance business grew in Q3, led by improving brand and business momentum in training and running with new product launches, strong sell-through of innovation, and a more complete offense across price points in footwear and apparel.
- Elevate and grow the marketplace, the fourth action, is a balanced approach where the company is supporting wholesale partners to drive healthy growth and returning NIKE Direct to a premium destination.
- The company delivered bold and inspiring storytelling in key sport moments, which drove heat and energy for the brand.
- The company delivered something new to the consumer week-after-week, and that's exactly the kind of sustained pace the company needs to strengthen its business.
- The company is excited about the products that are coming for Spring 2026.
- Revenue declined by 4% in North America in Q3.
- EBIT declined by 42% on a reported basis.
- Wholesale was down 4%, largely due to declines in Greater China.
- Revenue was down by 9% on a reported basis and down by 7% on a currency-neutral basis in Q3.
- Digital traffic is expected to be down double-digits in fiscal 2026.
- Digital traffic is expected to be down double-digits in fiscal 2026 due to actions to reduce promotional days, markdown rates, and closeout liquidation.
- Nike expects other income and expense, including net interest income, to be $45 million to $55 million for Q4, and the tax rate for the full year to be in the mid-teens range.
- Nike expects classic footwear franchises to be down by more than 10 points as a percent of total footwear mix in Q4 of this fiscal year.
- Nike is confident about liquidating inventory through channels where it is used to liquidating that inventory.
- Nike expects Q4 to reflect the largest impact from Win Now actions, and headwinds to revenue and margin are expected to moderate from there.
Q&A Highlights from Nike Inc Earnings Call Q3 2025
- Analyst asked about the timeline for cleaning up classic shoe inventories in the wholesale channel.
- Elliott J. Hill, the company's Chief Operating Officer, provided a timeline for cleaning up classic shoe inventories in the wholesale channel. He stated that the company is working on rightsizing the inventory of three key franchises, including Air Force 1, Dunk, and AJ 1. The company is also focusing on driving newness in the sportswear side of the business, with products such as Vomero 5, P-6000 Shox, Superfly, Air Max Muse, and Air Max 95. The company is confident that it will be able to reduce the contribution of these franchises by 10 percentage points by the end of Q4, and plans to drive that down more in fiscal year 2026.
- Elliott J. Hill, the company's Chief Operating Officer, provided a timeline for cleaning up classic shoe inventories in the wholesale channel. He stated that the company is working on rightsizing the inventory of three key franchises, including Air Force 1, Dunk, and AJ 1. The company is also focusing on driving newness in the sportswear side of the business, with products such as Vomero 5, P-6000 Shox, Superfly, Air Max Muse, and Air Max 95. The company is confident that it will be able to reduce the contribution of these franchises by 10 percentage points by the end of Q4, and plans to drive that down more in fiscal year 2026.
- Analyst asked about the company's latest thoughts on innovation within NIKE, including the strength of its innovation team and the pipeline ahead.
- Elliott J. Hill, the company's Chief Operating Officer, provided an update on the company's innovation efforts. He stated that the company has a dedicated team working on long-term innovation, including the Nike Sport Research Lab. He also noted that the company is focused on driving newness and freshness in performance and sportswear, including footwear, apparel, and accessories. The company is confident in its innovation pipeline, which includes products such as 24/7, Vomero 5, P-6000 Shox, Superfly, Air Max Muse, and Air Max 95. The company is also working on elevating the marketplace and retail presentation, with a focus on wholesale and physical retail.
- Elliott J. Hill, the company's Chief Operating Officer, provided an update on the company's innovation efforts. He stated that the company has a dedicated team working on long-term innovation, including the Nike Sport Research Lab. He also noted that the company is focused on driving newness and freshness in performance and sportswear, including footwear, apparel, and accessories. The company is confident in its innovation pipeline, which includes products such as 24/7, Vomero 5, P-6000 Shox, Superfly, Air Max Muse, and Air Max 95. The company is also working on elevating the marketplace and retail presentation, with a focus on wholesale and physical retail.
- Analyst asked about the company's plans to balance promotions and exciting storytelling while clearing out excess inventory.
- Elliott J. Hill explained that the company is returning products from wholesale partners and liquidating them through value stores and digital channels. They are also working to reset running and other product lines with full-price presentations and user experiences. The company is managing expenses tightly while accelerating investment in demand creation, with a focus on storytelling and impact. They will continue to do this while managing expenses tightly and investing in sales organizations and key city teams.
- Elliott J. Hill explained that the company is returning products from wholesale partners and liquidating them through value stores and digital channels. They are also working to reset running and other product lines with full-price presentations and user experiences. The company is managing expenses tightly while accelerating investment in demand creation, with a focus on storytelling and impact. They will continue to do this while managing expenses tightly and investing in sales organizations and key city teams.
- Analyst asked about the impact of Win Now actions on the company's P&L and revenue.
- Matt Friend explained that the company expects Q4 to reflect the largest impact from Win Now actions, with headwinds to revenue and margin expected to moderate. The company is committed to providing guidance and financial updates every 90 days, and they have already started executing against their priorities. They are confident that they will continue to be liquidating inventory through channels they are used to, and they will provide greater visibility as they get into fiscal 2026.
- Matt Friend explained that the company expects Q4 to reflect the largest impact from Win Now actions, with headwinds to revenue and margin expected to moderate. The company is committed to providing guidance and financial updates every 90 days, and they have already started executing against their priorities. They are confident that they will continue to be liquidating inventory through channels they are used to, and they will provide greater visibility as they get into fiscal 2026.
- Analyst asked about Nike's biggest learnings from returning to the wholesale channel and any surprises compared to historical operations.
- Elliott J. Hill explained that the company had been too siloed in its approach to direct and wholesale channels, and that it had made two moves to integrate the two channels by putting in place two new leaders who work hand-in-hand to ensure alignment. He also mentioned that the company had gotten out of a rhythm of working closely with wholesale partners and is now working to rebuild those relationships.
- Elliott J. Hill explained that the company had been too siloed in its approach to direct and wholesale channels, and that it had made two moves to integrate the two channels by putting in place two new leaders who work hand-in-hand to ensure alignment. He also mentioned that the company had gotten out of a rhythm of working closely with wholesale partners and is now working to rebuild those relationships.
- Analyst asked about wholesale discounts as a headwind for Nike.
- Matthew Friend explained that the profit pool in the wholesale channel has been volatile in recent years due to supply chain disruptions and other factors, and that Nike has had to navigate through many things to manage profitability. He mentioned that the company lowered wholesale discount rates in the past to offset other headwinds, but is now investing in commercial terms to be competitive and profitable for both Nike and its partners.
- Matthew Friend explained that the profit pool in the wholesale channel has been volatile in recent years due to supply chain disruptions and other factors, and that Nike has had to navigate through many things to manage profitability. He mentioned that the company lowered wholesale discount rates in the past to offset other headwinds, but is now investing in commercial terms to be competitive and profitable for both Nike and its partners.
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