Nike’s Fiscal Fourth Quarter Better Than Feared

Image: Nike’s shares have been pummeled of late.

By Brian Nelson, CFA

On June 26, Nike (NKE) reported better than expected fourth quarter fiscal 2025 results with revenue and GAAP earnings per share exceeding the consensus forecasts. Fiscal fourth quarter revenues were $11.1 billion, down 12% on a reported basis and 11% on a currency-neutral basis. Nike Direct revenues were down 14% on a reported and currency-neutral basis in the quarter, while wholesale revenues fell 9% on a reported and currency-neutral basis in the period. Quarterly revenues for Converse fell 26%. Gross margin declined 440 basis points in the fiscal fourth quarter, to 40.3%, while diluted earnings per share fell 86% in the quarter, to $0.14.

Management had the following to say about the results:

While our financial results are in-line with our expectations, they are not where we want them to be. Moving forward, we expect our business to improve as a result of the progress we’re making through our Win Now actions. As we enter a new fiscal year, we are turning the page and the next step is aligning our teams to lead with sport through what we are calling the sport offense. This will accelerate our Win Now actions to reposition our business for future growth.

The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here. I am confident in our ability to navigate through this current dynamic and uncertain environment by focusing on what we can control and executing our Win Now actions.

Nike ended the fourth quarter of fiscal 2025 with inventories of $7.5 billion, flat compared to the prior year. Cash and equivalents and short-term investments were $9.2 billion, down approximately $2.4 billion from the year-ago period, as operating cash flow was more than offset by share buybacks, dividends, bond repayment and capital expenditures. In the fiscal fourth quarter, the company returned approximately $0.8 billion to shareholders, including dividends of $591 million and share repurchases of $202 million. Though Nike has a strong track record of increasing dividends for the past 23 consecutive years, its business remains under pressure, and we don’t include shares in any newsletter portfolio. The company’s equity yields 2.2% at the time of this writing.

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