NIKE, Inc. (NKE) Q4 2025 Earnings Summary

Executive Summary

• Q4 FY2025 revenue was $11.10B, down 12% YoY; gross margin fell 440 bps to 40.3%; diluted EPS was $0.14 . Versus consensus, NIKE beat both revenue ($10.72B*) and EPS ($0.123*), though absolute results were weak YoY .*
• NIKE Direct fell 14% (Digital -26%; stores +2%) while Wholesale declined 9%; Converse revenue was $357M (-26%) .
• Management unveiled a “sport offense” realignment to accelerate Win Now actions; wholesale order book for holiday is up in NA/EMEA/APLA, partially offset by China .
• Q1 FY2026 guidance: revenue down mid-single digits; gross margin down ~350–425 bps (incl. ~100 bps tariff impact); SG&A up low-single digits; OI&E $0–$10M; FY26 tax rate 19–20% .
• New U.S. tariff headwinds estimated at ~$1B gross incremental cost; net FY2026 GM impact ~75 bps, with larger impact in H1; U.S. footwear sourcing from China to fall to high-single digits by end FY2026 .

What Went Well and What Went Wrong

What Went Well

• Wholesale momentum: “Our holiday order book is up versus the prior year, with growth in North America, EMEA, and APLA partially offset by Greater China” .
• Product signals: Running grew high-single digits; Vomero 18 became a $100M+ franchise in ~90 days with strong sell-through; A’ja 1 launch sold out in 3 minutes on Nike Digital .
• Marketplace actions: NIKE Digital markdown rates improved and share of full-price demand increased in NA and EMEA; inventory cleanup tracking to a healthy market by end of H1 FY2026 .

What Went Wrong

• Top-line and margin pressure: Q4 revenue down 12% YoY; gross margin down 440 bps from 44.7% to 40.3% due to higher discounts and channel mix .
• Classics drag: Near 40% reduction in classic franchises created ~$1B Q4 revenue headwind; digital traffic down double digits as the channel is repositioned to full price .
• Greater China: Q4 revenue -20% with declines across sportswear and Jordan; inventory reset deeper than other geos; traffic remains challenged .

Financial Results

Quarterly P&L and Margins (oldest → newest)

Actual vs Wall Street Consensus (S&P Global)

• Estimates marked with asterisk; Values retrieved from S&P Global.*

Segment and Geography Breakdown (Q4 FY2025 vs Q4 FY2024)

KPIs (Q4 FY2025)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO on strategy: “As we enter a new fiscal year… aligning our teams to lead with sport through what we are calling the sport offense… accelerate our Win Now actions to reposition our business for future growth.”
• CFO on Q4 impact: “The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here.”
• CFO on tariffs: “With the new tariff rates… we estimate a gross incremental cost increase to Nike of approximately $1 billion… net FY2026 impact ~75 bps to gross margin; ~100 bps in Q1.”
• CEO on product momentum: “Running grew high single digits… Vomero 18… already become a $100 million-plus franchise… A’ja 1 sold out in three minutes on Nike Digital.”

Q&A Highlights

• Inventory cleanup timeline: “We remain on track for a healthy and clean marketplace by the end of the first half of 2026.”
• Tariff mitigation: ~$1B gross cost; mix shift of U.S. footwear sourcing from China (~16% → high-single digits by end FY2026); surgical U.S. price increases; partner mitigation; corporate cost evaluation .
• Gross margin cadence: Pressure in H1 FY2026 due to win now actions and tariffs; moderation in H2 .
• Wholesale and new distribution: Holiday order book up; Amazon partnership goes live in Q1 but “not a material needle mover” initially .
• China: Monobrand marketplace reset; local concepts, geo express lane for China-specific product; recovery will take time .

Estimates Context

• Q4 FY2025 results beat consensus on both revenue and EPS despite YoY declines: Revenue $11.10B vs $10.72B*; EPS $0.14 vs $0.123* .*
• NIKE also beat in Q3 and Q2 on both revenue and EPS relative to consensus: Q3 revenue $11.27B vs $11.03B*, EPS $0.54 vs $0.291* ; Q2 revenue $12.35B vs $12.11B*, EPS $0.78 vs $0.625* .*
• FY2025 actual revenue $46.31B vs consensus $45.91B*; EPS $2.16 vs $2.139* .*
• FY2026 consensus implies modest top-line growth ($46.77B*) and lower EPS ($1.65*) amid tariff and mix headwinds; near-term estimate revisions likely to reflect Q1 GM pressure and continued classics reductions .*
• Estimates marked with asterisk; Values retrieved from S&P Global.*

Key Takeaways for Investors

• Near-term setup: Despite three consecutive consensus beats, fundamentals remain pressured (Q4 revenue -12% YoY, GM -440 bps), with Q1 FY2026 guided down and GM hit from tariffs; expect cautious sentiment near term .
• Structural actions: Sport offense and Win Now are accelerating product newness and wholesale momentum; holiday order book improvement is a tangible positive indicator .
• Mix transition: Classic franchise reductions (~$1B Q4 revenue headwind) and digital repositioning to full-price will pressure volumes, but should improve margin quality over time .
• Tariff risk management: ~$1B gross cost to be mitigated through sourcing shifts, partner arrangements, and surgical pricing; net FY2026 GM impact ~75 bps, heavier in H1 .
• Geography lens: NA/EMEA show clearer progress; China requires longer-duration reset; allocation and local concepts critical to reaccelerate .
• Product momentum: Running, women’s basketball, and sport-led assortments are leading; sustained execution on pipeline is key to rebalancing mix and restoring growth .
• Trading implications: Watch for sequential stabilization in revenue trend, GM trajectory in H2 FY2026, wholesale order flow, and tariff mitigation pace; any signs of China traction or stronger full-price digital recovery could be stock-positive .