NIKE (NKE) Financials

NIKE, Inc. has demonstrated relatively stable operating revenues over the last several years with seasonal fluctuations consistent with its retail business model.

Positive Trends:

• Operating Revenue showed general growth from approximately $12.2 billion in Q4 2022 to $11.1 billion in Q4 2025, with some quarters exceeding $12 billion, indicating resilience despite market volatility.
• Gross profit margins have remained robust, with gross profits around $4.5 billion to $5.6 billion in recent quarters, underlining NIKE's effective cost management.
• Net Income has been strong historically, with values above $1 billion in many quarters, highlighting continued profitability.
• Operating Expenses as a percentage of revenues have been controlled, with selling, general, and administrative expense and marketing expenses scaling in proportion to revenues.
• Cash flow from operating activities remained healthy, with quarterly inflows mostly exceeding $0.4 billion and peaking above $2 billion in some quarters, supporting operational strength and ongoing investments.
• NIKE has consistently returned value to shareholders via dividends and share repurchases, paying quarterly dividends around $0.3 to $0.4 per share and repurchasing common equity up to $1.99 billion in Q4 2025.
• The Balance Sheet shows strong liquidity with cash and equivalents consistently above $6.1 billion and total equity increasing modestly to about $15.8 billion, demonstrating financial stability.

Neutral Observations:

• There is some volatility in quarterly net income, including a significant drop in Q4 2025 to $211 million from $794 million in Q3 2025, likely driven by higher operating costs or other factors.
• The company's long-term debt remains substantial, ranging from $7.9 billion to $9.9 billion in recent quarters, but this level is typical for a large multinational and is managed alongside equity of ~ $15 billion.
• Variations in cash flows from investing and financing activities occur, reflecting ongoing investments in property, plant, equipment, and strategic investments, as well as debt repayment and issuance activities.

Negative Factors or Risks:

• Net income in Q4 2025 showed a steep decline to $211 million compared to prior quarters, suggesting margin pressures or exceptional expenses that warrant monitoring.
• Net cash from financing activities was strongly negative in recent quarters (e.g., -$1.64 billion in Q4 2025), indicating high repayment of debt and stock buybacks, which could pressure liquidity if operating cash flows weaken.
• Operating income in Q4 2025 was substantially lower ($321 million) compared to previous quarters exceeding $700 million, reflecting potential operational challenges.
• The company’s total liabilities have increased in several quarters, reaching over $23 billion, meaning leverage may be rising which could increase risk if earnings soften.
• Inventory levels have fluctuated and remained high (around $7.5 billion to $9.6 billion), which could imply potential risks of excess stock or supply chain inefficiencies.

Summary: NIKE continues to demonstrate strong revenue and profitability trends overall with solid cash flow generation and shareholder returns. However, recent quarterly declines in net income and operating income, elevated liabilities, and outflows from financing activities highlight some areas of caution. Investors should watch upcoming earnings reports for signs of margin recovery and effective cost control to confirm the company’s stable performance trajectory.