What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-03 compared with 2024-10-07 · 283 added, 160 removed, 325 unchanged (58% of the section changed)

6 unchanged sentences

Our strategy is to achieve sustainable, profitable long-term revenue growth by creating innovative, "must-have" products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.

We are focused on growing the entire marketplace by increasing investment to elevate and differentiate our brand experience within our wholesale partners while also continuing to invest in our NIKE Direct operations.

We have completed the implementation of a new Enterprise Resource Planning ("ERP") Platform in our Greater China and North America geographies as part of a global rollout integrating wholesale and NIKE Direct operations and enhancing supply chain and finance capabilities.

As a result, beginning with the first quarter of fiscal 2025, we have removed the non-GAAP financial measure of wholesale equivalent revenues.

There is no change to our reported revenues or gross margin.

We will continue to invest in the global rollout of the ERP Platform in our remaining geographies to serve our consumers at speed and scale.

Under the leadership of our new Chief Executive Officer, Elliott Hill, we are focused on leading with sport, building a complete product portfolio, creating stories to inspire and emotionally connect with consumers, repositioning NIKE Brand Digital as a full-price platform and increasing investment with our wholesale partners.

QUARTERLY FINANCIAL HIGHLIGHTS

Revenues for the first quarter of fiscal 2025 were $11.6 billion compared to $12.9 billion for the first quarter of fiscal 2024

• NIKE Direct revenues were $4.7 billion for the first quarter of fiscal 2025 compared to $5.4 billion for the first quarter of fiscal 2024, and represented approximately 42% of total NIKE Brand revenues

• NIKE Brand wholesale revenues were $6.4 billion for the first quarter of fiscal 2025 compared to $7.0 billion for the first quarter of fiscal 2024

• Gross margin for the first quarter of fiscal 2025 increased 120 basis points to 45.4%, primarily due to lower NIKE Brand product costs, lower warehousing and logistics costs, and benefits from strategic pricing actions from the prior year

• Inventories as of August 31, 2024, were $8.3 billion, an increase of 10% compared to May 31, 2024, primarily driven by an increase in units

• We returned approximately $1.8 billion to our shareholders in the first quarter of fiscal 2025 through share repurchases and dividends

CURRENT ECONOMIC CONDITIONS AND OTHER FACTORS IMPACTING OUR BUSINESS

The operating environment could remain volatile in fiscal 2025 as the risk remains that the factors discussed below, among others, could have a material adverse impact on our future revenue growth as well as overall profitability.

• Consumer Spending:

During the first quarter of fiscal 2025, consumers continued to spend more cautiously as macroeconomic and geopolitical conditions remain uncertain.

We will continue to closely monitor these conditions and their impacts on consumer spending behavior.

• Product Portfolio Management:

We are reducing the supply of certain footwear products as we scale new and innovative products across the marketplace and rebalance our footwear portfolio.

This had a negative impact on our revenues in the first quarter of fiscal 2025.

Revenues for the second quarter of fiscal 2025 were $12.4 billion compared to $13.4 billion for the second quarter of fiscal 2024

• NIKE Direct revenues were $5.0 billion for the second quarter of fiscal 2025 compared to $5.7 billion for the second quarter of fiscal 2024, and represented approximately 42% of total NIKE Brand revenues

• NIKE Brand wholesale revenues were $6.9 billion for the second quarter of fiscal 2025 compared to $7.1 billion for the second quarter of fiscal 2024

• Gross margin for the second quarter of fiscal 2025 decreased 100 basis points to 43.6%, primarily due to higher discounts and changes in channel mix, partially offset by lower product input costs as well as lower warehousing and logistics costs

• Inventories as of November 30, 2024, were $8.0 billion, an increase of 6% compared to May 31, 2024, primarily driven by an increase in units

• We returned approximately $1.6 billion to our shareholders in the second quarter of fiscal 2025 through share repurchases and dividends

FACTORS IMPACTING OUR BUSINESS

Our results for the second quarter and six months ended November 30, 2024, reflect lower wholesale shipments, increased sales-related reserves, a decrease in traffic and elevated promotional activity across NIKE Direct which resulted in a negative impact on our Revenues and overall profitability.

We are taking actions across the following areas:

• Product Management:

Reducing the supply of certain footwear products in the marketplace as we shift to new and innovative products and rebalance the mix of our footwear portfolio.

• Marketplace Management:

We are creating a more balanced channel mix as we move product from our NIKE Direct operations to our wholesale partners to ensure our products are in the path of the consumer.

In the first quarter of fiscal 2025, we experienced a decline in traffic across NIKE Brand Digital and our retail stores which negatively impacted our revenues.

• Foreign Currency Impacts:

As a global company with significant operations outside the United States, we are exposed to risk arising from changes in foreign currency exchange rates.

For additional information, refer to "Foreign Currency Exposures and Hedging Practices".

Repositioning NIKE Brand Digital as a full-price platform and reinvesting in wholesale distribution.

This includes liquidating inventory through increased markdowns across NIKE Direct, and higher sales-related returns and discounts with our wholesale partners to reduce inventory and create capacity for new product.

• Brand Management:

Increasing investment in demand creation including brand marketing and sports marketing to support key product launches and sports moments.

As we continue to take actions to reposition our business over the next several quarters, we expect a negative impact on our Revenues and gross margin as well as higher Demand creation expense.

However, we believe these actions will reposition our business to drive long-term shareholder value.

USE OF NON-GAAP FINANCIAL MEASURES

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Total NIKE, Inc.

EBIT for the three months ended August 31, 2024 and August 31, 2023 are as follows:

THREE MONTHS ENDED AUGUST 31,

EBIT for the three and six months ended November 30, 2024 and 2023 are as follows:

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 2024 2023

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EBIT divided by total NIKE, Inc.

Our EBIT margin calculation for the three months ended August 31, 2024 and August 31, 2023 are as follows:

THREE MONTHS ENDED AUGUST 31,

Our EBIT margin calculation for the three and six months ended November 30, 2024 and November 30, 2023 are as follows:

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 2024 2023

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RESULTS OF OPERATIONS

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions, except per share data) 2024 2023 % CHANGE

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions, except per share data) 2024 2023 % CHANGE 2024 2023 % CHANGE

Revenues $ 12,354 $ 13,388 -8 % $ 23,943 $ 26,327 -9 %

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CONSOLIDATED OPERATING RESULTS

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1)

NIKE Brand Revenues by:

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Corporate (3)

(25) (3) — — (48) (5) — —

TOTAL NIKE, INC.

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(3) Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

Revenues for the first quarter of fiscal 2025 were $11.6 billion compared to $12.9 billion for the first quarter of fiscal 2024.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

Revenues for the second quarter of fiscal 2025 were $12.4 billion compared to $13.4 billion for the second quarter of fiscal 2024.

On a currency-neutral basis, NIKE, Inc.

revenues decreased 9%, as lower revenues in North America, Europe, Middle East & Africa ("EMEA") and Converse reduced NIKE, Inc.

Revenues decreased 9%, primarily due to lower revenues in North America, Europe, Middle East & Africa ("EMEA"), Greater China and Converse which each reduced NIKE, Inc.

Revenues by approximately 3, 3, 2 and 1 percentage points, respectively.

1 unchanged sentence

Revenues, decreased 7% on a reported basis and 8% on a currency-neutral basis.

The decrease on a currency-neutral basis, was due to lower revenues in Men's, Women's, the Jordan Brand and Kids'.

The decrease on a currency-neutral basis was due to lower revenues in the Jordan Brand, Men's and Women's.

• NIKE Brand footwear revenues decreased 12% on a currency-neutral basis.

Unit sales of footwear decreased 10%, while average selling price ("ASP") per pair was flat as strategic pricing actions were offset by changes in channel mix and higher discounts.

Unit sales of footwear decreased 7%, while lower average selling price ("ASP") per pair reduced footwear revenues by approximately 5 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix.

• NIKE Brand apparel revenues decreased 2% on a currency-neutral basis.

Unit sales of apparel decreased 12%, while higher ASP per unit contributed approximately 3 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to lower discounts and strategic pricing actions.

• NIKE Brand wholesale revenues decreased 8% and 7% compared to the first quarter of fiscal 2024, on a reported and currency-neutral basis, respectively.

The decrease on a currency-neutral basis was driven by lower revenues in EMEA, North America and Asia Pacific & Latin America ("APLA"), partially offset by higher revenues in Greater China.

• NIKE Direct revenues were $4.7 billion in the first quarter of fiscal 2025, compared to $5.4 billion for the first quarter of fiscal 2024.

NIKE Brand Digital sales were $2.3 billion for the first quarter of fiscal 2025 compared to $2.9 billion for the first quarter of fiscal 2024.

On a currency-neutral basis, NIKE Direct revenues decreased 12%, primarily due to NIKE Brand Digital sales declines of 20%.

Comparable store sales were flat compared to the first quarter of fiscal 2024.

Unit sales of apparel were flat, while lower ASP per unit reduced apparel revenues by approximately 2 percentage points.

Lower ASP per unit was primarily due to changes in channel mix and higher discounts, partially offset by strategic pricing actions.

• NIKE Brand wholesale revenues decreased 3% on a reported basis and 4% on a currency-neutral basis.

The decrease on a currency-neutral basis was driven by lower revenues in Greater China, EMEA, North America and Asia Pacific & Latin America ("APLA").

• NIKE Direct revenues were $5.0 billion in the second quarter of fiscal 2025, compared to $5.7 billion for the second quarter of fiscal 2024.

NIKE Brand Digital sales were $2.8 billion for the second quarter of fiscal 2025 compared to $3.5 billion for the second quarter of fiscal 2024.

On a currency-neutral basis, NIKE Direct revenues decreased 14%, primarily due to NIKE Brand Digital sales declines of 21% and comparable store sales declines of 2% compared to the second quarter of fiscal 2024.

For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales".

THREE MONTHS ENDED AUGUST 31,

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

Revenues were $23.9 billion for the first six months of fiscal 2025 compared to $26.3 billion for the first six months of fiscal 2024.

On a currency-neutral basis, NIKE, Inc.

Revenues decreased 9%, primarily due to lower revenues in North America, EMEA, Greater China and Converse which each reduced NIKE, Inc.

Revenues by 4, 3, 1 and 1 percentage points, respectively.

• NIKE Brand revenues, which represented over 90% of NIKE, Inc.

Revenues, decreased 9% on a reported basis and 9% on a currency-neutral basis.

The decrease on a currency-neutral basis was due to lower revenues in Men's, the Jordan Brand, Women's and Kids'.

• NIKE Brand footwear revenues decreased 11% on a currency-neutral basis.

Unit sales of footwear decreased 9%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix, partially offset by strategic pricing actions.

• NIKE Brand apparel revenues decreased 6% on a currency-neutral basis.

Unit sales of apparel decreased 6%,while ASP per unit was flat, as strategic pricing actions and lower discounts were offset by changes in channel mix.

• NIKE Brand wholesale revenues decreased 5% on a reported and currency-neutral basis.

The decrease on a currency-neutral basis was driven by lower revenues in EMEA, North America, Greater China and APLA.

• NIKE Direct revenues were $9.7 billion for the first six months of fiscal 2025, compared to $11.1 billion for the first six months of fiscal 2024.

NIKE Brand Digital sales were $5.1 billion for the first six months of fiscal 2025 compared to $6.4 billion for the first six months of fiscal 2024.

On a currency-neutral basis, NIKE Direct revenues decreased 13%, primarily due to NIKE Brand Digital sales declines of 20% and comparable store sales declines of 1% compared to the first six months of fiscal 2024.

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE

2024 2023 % CHANGE 2024 2023 % CHANGE

Gross profit $ 5,389 $ 5,971 -10 % $ 10,646 $ 11,691 -9 %

Gross margin 45.4 % 44.2 % 120 bps

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

For the first quarter of fiscal 2025, our consolidated gross margin was 120 basis points higher than the prior year due to:

• Lower NIKE Brand product costs (increasing gross margin approximately 120 basis points), primarily due to lower ocean freight rates and lower product input costs;

Gross margin 43.6 % 44.6 % (100) bps 44.5 % 44.4 % 10 bps

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

For the second quarter of fiscal 2025, our consolidated gross margin was 100 basis points lower than the prior year due to:

• Lower NIKE Brand ASP (decreasing gross margin approximately 330 basis points), primarily due to higher discounts, product mix and changes in channel mix, partially offset by benefits from strategic pricing actions;

• Higher other costs (decreasing gross margin approximately 70 basis points), in part due to higher inventory obsolescence reserves;

• Lower gross margin from Converse (decreasing gross margin approximately 20 basis points).

This was partially offset by:

• Lower NIKE Brand product costs (increasing gross margin approximately 260 basis points), primarily due to product mix and lower product input costs;

• Lower warehousing and logistics costs (increasing gross margin approximately 50 basis points);

• Higher NIKE Brand ASP (increasing gross margin approximately 40 basis points), primarily due to benefits from strategic pricing actions from the prior year, partially offset by changes in channel mix.

• Favorable changes in foreign currency exchange rates, net of hedges (increasing gross margin approximately 20 basis points).

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

For the first six months of fiscal 2025, our consolidated gross margin was 10 basis points higher than the prior year due to:

• Lower NIKE Brand product costs (increasing gross margin approximately 190 basis points), primarily due to product mix;

• Lower warehousing and logistics costs (increasing gross margin approximately 50 basis points).

This was partially offset by:

• Lower NIKE Brand ASP (decreasing gross margin approximately 150 basis points), primarily due to changes in channel mix, higher discounts and product mix, partially offset by benefits from strategic pricing actions;

• Higher other costs (decreasing gross margin approximately 60 basis points), in part due to higher inventory obsolescence reserves.

TOTAL SELLING AND ADMINISTRATIVE EXPENSE

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE

2024 2023 % CHANGE 2024 2023 % CHANGE

Demand creation expense (1)

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Total selling and administrative expense $ 4,005 $ 4,146 -3 % $ 8,053 $ 8,262 -3 %

% of revenues 34.9 % 31.8 % 310 bps

% of revenues 32.4 % 31.0 % 140 bps 33.6 % 31.4 % 220 bps

(1) Demand creation expense consists of brand marketing expense, including advertising and promotion costs such as production and media costs, digital marketing expense, brand events and retail brand presentation costs, and sports marketing expense, including expenses related to endorsement contracts, complimentary product and sports marketing events.

(2) Operating overhead expense consists primarily of wage and benefit-related expenses and other administrative expenses, such as research and development costs, bad debt expense, rent, depreciation and amortization and costs related to professional services, certain technology investments, meetings and travel.

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

Demand creation expense increased 1% primarily due to an increase in sports marketing expense offset by a decrease in brand marketing expense.

Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.

Operating overhead expense decreased 5% due to lower wage-related expenses and lower other administrative costs.

Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

Demand creation expense increased 8% primarily due to an increase in brand marketing expense, reflecting investment in key sports events.

Changes in foreign currency exchange rates did not have a material impact on Demand creation expense.

Operating overhead expense decreased 7% primarily due to lower wage-related expenses and lower other administrative costs.

Operating overhead expense decreased 6% due to lower wage-related expenses and lower other administrative costs.

Changes in foreign currency exchange rates did not have a material impact on Operating overhead expense.

OTHER (INCOME) EXPENSE, NET

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 2024 2023

Other (income) expense, net $ (8) $ (75) $ (63) $ (85)

Other (income) expense, net comprises foreign currency conversion gains and losses from the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, as well as unusual or non-operating transactions outside the normal course of business.

For the first quarter of fiscal 2025, Other (income) expense, net increased from $10 million to $55 million of other income, net, primarily due to a net favorable change in foreign currency conversion gains and losses, including hedges.

We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had an unfavorable impact of $12 million on our Income before income taxes for the first quarter of fiscal 2025.

THREE MONTHS ENDED AUGUST 31,

2024 2023 % CHANGE

Effective tax rate 19.6 % 12.0 % 760 bps

Our effective tax rate was 19.6% for the first quarter of fiscal 2025, compared to 12.0% for the first quarter of fiscal 2024, primarily due to a one-time benefit in the first quarter of fiscal 2024 provided by the delay of the effective date of certain U.S.

foreign tax credit regulations.

For the second quarter of fiscal 2025, Other (income) expense, net decreased from $75 million of other income, net, in the prior year to $8 million of other income, net, in the current year, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges.

For the first six months of fiscal 2025, Other (income) expense, net decreased from $85 million of other income, net, in the prior year to $63 million of other income, net, in the current year, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges.

We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had an unfavorable impact of $23 million and $35 million on our Income before income taxes for the second quarter and first six months of fiscal 2025, respectively.

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

2024 2023 % CHANGE 2024 2023 % CHANGE

Effective tax rate 17.9 % 17.9 % — bps 18.7 % 15.2 % 350 bps

Our effective tax rate was 17.9% for the second quarter of fiscal 2025, compared to 17.9% for the second quarter of fiscal 2024.

Our effective tax rate was 18.7% for the first six months of fiscal 2025, compared to 15.2% for the first six months of fiscal 2024, primarily due to one-time benefits in the first six months of fiscal 2024 provided by the delay of the effective date of certain U.S.

foreign tax credit regulations and a reduction in accrued withholding taxes on undistributed foreign earnings.

On December 10, 2024, the U.S.

Department of Treasury published final regulations related to foreign currency gains and losses that are effective for us beginning June 1, 2025.

These regulations require computation of a pre-transition foreign currency gain or loss to be included in the determination of future taxable income or loss.

We are currently evaluating the regulations and expect to recognize a one-time, non-cash deferred tax benefit related to pre-transition foreign currency losses in the third quarter of fiscal 2025.

We will continue to evaluate the impacts of these regulations on our financial statements and refine our estimates in subsequent periods.

For additional information, refer to Note 4 — Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

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The breakdown of Revenues is as follows:

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1)

North America $ 5,179 $ 5,625 -8 % -8 % $ 10,005 $ 11,048 -9 % -9 %

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Corporate (3)

(25) (3) — — (48) (5) — —

TOTAL NIKE, INC.

7 unchanged sentences

The breakdown of EBIT is as follows:

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE

2024 2023 % CHANGE 2024 2023 % CHANGE

North America $ 1,371 $ 1,526 -10 % $ 2,587 $ 2,960 -13 %

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NORTH AMERICA

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 3,236 $ 3,757 -14 % -14 % $ 6,448 $ 7,490 -14 % -14 %

6 unchanged sentences

EARNINGS BEFORE INTEREST AND TAXES $ 1,371 $ 1,526 -10 % $ 2,587 $ 2,960 -13 %

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

• North America revenues decreased 11% on a currency-neutral basis due to lower revenues in Men's, Women's, the Jordan Brand and Kids'.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

• North America revenues decreased 8% on a currency-neutral basis, primarily due to lower revenues in the Jordan Brand and Women's, partially offset by higher revenues in Kids'.

Wholesale revenues decreased 1%.

NIKE Direct revenues decreased 11%, primarily due to digital sales declines of 15%, partially offset by comparable store sales growth of 1%.

NIKE Direct revenues decreased 15%, primarily due to digital sales declines of 22% and comparable store sales declines of 3%.

• Footwear revenues decreased 14% on a currency-neutral basis.

Unit sales of footwear decreased 15%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.

Higher ASP per pair was primarily due to strategic pricing actions, partially offset by higher discounts.

Unit sales of footwear decreased 6%, while lower ASP per pair reduced footwear revenues by approximately 8 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix.

• Apparel revenues increased 1% on a currency-neutral basis.

Unit sales of apparel increased 11%, while lower ASP per unit reduced apparel revenues by approximately 10 percentage points.

Lower ASP per unit was primarily due to changes in channel mix and higher discounts.

Reported EBIT decreased 10% reflecting lower revenues and the following:

• Gross margin was flat primarily due to lower ASP, reflecting product mix, changes in channel mix and higher discounts, as well as higher other costs, in part due to inventory obsolescence reserves.

These were offset by lower product costs, reflecting product mix and lower product input costs, as well as lower warehousing and logistics costs.

• Selling and administrative expense decrease of 5% driven by lower operating overhead expense and lower demand creation expense.

The decrease in operating overhead expense was due to lower wage-related expenses and lower other administrative costs.

The decrease in demand creation expense was due to lower brand marketing expense, partially offset by higher sports marketing expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

• North America revenues decreased 9% on a currency-neutral basis, primarily due to lower revenues in the Jordan Brand, Men's and Women's.

Wholesale revenues decreased 6%.

NIKE Direct revenues decreased 13%, primarily due to digital sales declines of 19% and comparable store sales declines of 1%.

• Footwear revenues decreased 14% on a currency-neutral basis.

Unit sales of footwear decreased 10%, while lower ASP per pair reduced footwear revenues by approximately 4 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix, partially offset by strategic pricing actions.

• Apparel revenues decreased 4% on a currency-neutral basis.

Unit sales of apparel decreased 12%, while higher ASP per unit contributed approximately 2 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to lower discounts and strategic pricing actions.

Unit sales of apparel decreased 1%, while lower ASP per unit reduced apparel revenues by approximately 3 percentage points.

Lower ASP per unit was primarily due to changes in channel mix and higher discounts, partially offset by strategic pricing actions.

Reported EBIT decreased 13% reflecting lower revenues and the following:

• Gross margin expansion of 180 basis points primarily due to lower product costs, as well as lower warehousing and logistics costs.

• Selling and administrative expense increase of 4% driven by higher demand creation expense, partially offset by lower operating overhead expense.

• Gross margin expansion of 80 basis points primarily due to lower product costs, reflecting product mix and lower product input costs, as well as lower warehousing and logistics costs.

This was partially offset by lower ASP, reflecting product mix, changes in channel mix and higher discounts, and higher other costs, in part due to higher inventory obsolescence reserves.

• Selling and administrative expense was flat, as higher demand creation expense was offset by lower operating overhead expense.

The increase in demand creation expense was primarily due to higher brand marketing expense, reflecting investment in key sports events.

The decrease in operating overhead expense was primarily due to lower wage-related expenses and other administrative costs.

The decrease in operating overhead expense was due to lower wage-related expenses and lower other administrative costs.

EUROPE, MIDDLE EAST & AFRICA

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 1,982 $ 2,186 -9 % -12 % $ 3,934 $ 4,446 -12 % -12 %

6 unchanged sentences

EARNINGS BEFORE INTEREST AND TAXES $ 831 $ 927 -10 % $ 1,623 $ 1,857 -13 %

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

• EMEA revenues decreased 12% on a currency-neutral basis due to lower revenues in Men's, Women's, the Jordan Brand and Kids'.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

• EMEA revenues decreased 10% on a currency-neutral basis due to lower revenues in Men's, the Jordan Brand, Women's and Kids'.

Wholesale revenues decreased 4%.

1 unchanged sentence

• Footwear revenues decreased 12% on a currency-neutral basis.

Unit sales of footwear decreased 13%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.

Higher ASP per pair was primarily due to strategic pricing actions, partially offset by changes in channel mix and higher discounts.

Unit sales of footwear decreased 11%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point.

Lower ASP per pair was primarily due to changes in channel mix and higher discounts, partially offset by strategic pricing actions.

• Apparel revenues decreased 8% on a currency-neutral basis.

Unit sales of apparel decreased 10%, while higher ASP per unit contributed approximately 2 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to strategic pricing actions and lower discounts, partially offset by changes in channel mix.

Reported EBIT decreased 10% reflecting lower revenues and the following:

• Gross margin expansion of 100 basis points primarily due to favorable changes in standard foreign currency exchange rates, as well as lower warehousing and logistics costs.

This was partially offset by lower ASP, primarily due to changes in channel mix, partially offset by strategic pricing actions, and higher other costs, in part due to higher inventory obsolescence reserves.

• Selling and administrative expense increase of 1% driven by higher demand creation expense, partially offset by lower operating overhead expense.

The increase in demand creation expense was due to higher sports marketing expense and unfavorable changes in foreign currency exchange rates, partially offset by lower brand marketing expense.

The decrease in operating overhead expense was due to lower wage-related expenses and lower other administrative costs, partially offset by unfavorable changes in foreign currency exchange rates.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

• EMEA revenues decreased 11% on a currency-neutral basis due to lower revenues in Men's, the Jordan Brand, Women's and Kids'.

Wholesale revenues decreased 8%.

NIKE Direct revenues decreased 17%, due to digital sales declines of 29%, partially offset by comparable store sales growth of 2% and the addition of new stores.

• Footwear revenues decreased 12% on a currency-neutral basis.

Unit sales of footwear decreased 12%, while ASP per pair was flat, as changes in channel mix and higher discounts were offset by strategic pricing actions.

• Apparel revenues decreased 10% on a currency-neutral basis.

Unit sales of apparel decreased 11%, while higher ASP per unit contributed approximately 1 percentage point of apparel revenue growth.

Higher ASP per unit was primarily due to lower discounts.

Higher ASP per unit was primarily due to lower discounts and strategic pricing actions, partially offset by changes in channel mix.

Reported EBIT decreased 13% reflecting lower revenues and the following:

• Gross margin expansion of 190 basis points primarily due to lower product costs, reflecting lower ocean freight rates, and lower warehousing and logistics costs, partially offset by unfavorable changes in standard foreign currency exchange rates.

• Selling and administrative expense decrease of 2% driven by lower operating overhead expense, partially offset by higher demand creation expense.

The decrease in operating overhead expense was primarily due to lower wage-related expense, lower other administrative costs and favorable changes in foreign currency exchange rates.

The increase in demand creation expense was primarily due to higher brand marketing expense, reflecting investment in key sports events, partially offset by lower sports marketing expense and favorable changes in foreign currency exchange rates.

• Gross margin expansion of 140 basis points primarily due to lower product costs, reflecting lower ocean freight rates, as well as lower warehousing and logistics costs.

This was partially offset by lower ASP, reflecting changes in channel mix, partially offset by strategic pricing actions.

• Selling and administrative expense was flat, as lower operating overhead expense was offset by higher demand creation expense.

The decrease in operating overhead expense was due to lower wage-related expenses and lower other administrative costs, partially offset by unfavorable changes in foreign currency exchange rates.

The increase in demand creation expense was due to higher brand marketing expense, reflecting investment in key sports events, and unfavorable changes in foreign currency exchange rates, partially offset by lower sports marketing expense.

GREATER CHINA

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 1,203 $ 1,361 -12 % -14 % $ 2,449 $ 2,648 -8 % -8 %

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EARNINGS BEFORE INTEREST AND TAXES $ 375 $ 514 -27 % $ 877 $ 1,039 -16 %

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

• Greater China revenues decreased 3% on a currency-neutral basis, primarily due to lower revenues in the Jordan Brand.

Wholesale revenues increased 10%.

NIKE Direct revenues decreased 16% due to digital sales declines of 34% and comparable store sales declines of 8%, partially offset by growth in non-comparable store sales.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

• Greater China revenues decreased 11% on a currency-neutral basis primarily due to lower revenues in Men's, the Jordan Brand and Women's.

Wholesale revenues decreased 15%.

NIKE Direct revenues decreased 7% due to comparable store sales declines of 8%, declines in non-comparable store sales and digital sales declines of 4%.

• Footwear revenues decreased 14% on a currency-neutral basis.

Unit sales of footwear decreased 1%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point.

Lower ASP per pair was primarily due to changes in channel mix and higher discounts, partially offset by strategic pricing actions.

Unit sales of footwear decreased 9%, while lower ASP per pair reduced footwear revenues by approximately 5 percentage points.

Lower ASP per pair was primarily due to higher discounts, partially offset by strategic pricing actions.

• Apparel revenues decreased 3% on a currency-neutral basis.

2 unchanged sentences

Reported EBIT decreased 27% reflecting lower revenues and the following:

• Gross margin contraction of approximately 170 basis points, largely due to unfavorable changes in standard foreign currency exchange rates, higher product costs and higher other costs, in part due to higher inventory obsolescence reserves.

This was partially offset by higher ASP, primarily due to strategic pricing actions, partially offset by changes in channel mix.

• Selling and administrative expense decrease of 5% primarily due to lower operating overhead expense, partially offset by higher demand creation expense.

Operating overhead expense decreased due to lower other administrative costs, lower wage-related expenses and favorable changes in foreign currency exchange rates.

Demand creation expense increased due to higher brand marketing expense, reflecting investment in key sports events.

• Gross margin contraction of approximately 490 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates, lower ASP, reflecting higher discounts and product mix, partially offset by strategic pricing actions, and higher other costs, primarily due to higher inventory obsolescence reserves.

This was partially offset by lower product costs, primarily due to product mix.

• Selling and administrative expense decrease of 6% due to lower operating overhead expense and lower demand creation expense.

Operating overhead expense decreased primarily due to lower other administrative costs, partially offset by unfavorable changes in foreign currency exchange rates.

Demand creation expense decreased primarily due to lower brand marketing expense, partially offset by unfavorable changes in foreign currency exchange rates.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

• Greater China revenues decreased 7% on a currency-neutral basis primarily due to lower revenues in the Jordan Brand, Men's and Women's.

Wholesale revenues decreased 3%.

NIKE Direct revenues decreased 11% due to digital sales declines of 19% and comparable store sales declines of 8%.

• Footwear revenues decreased 8% on a currency-neutral basis.

Unit sales of footwear decreased 5%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix, partially offset by strategic pricing actions.

• Apparel revenues decreased 6% on a currency-neutral basis.

Unit sales of apparel decreased 12%, while higher ASP per unit contributed approximately 6 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to strategic pricing actions.

Reported EBIT decreased 16% reflecting lower revenues and the following:

• Gross margin contraction of approximately 330 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates and higher other costs, primarily due to higher inventory obsolescence reserves.

• Selling and administrative expense decrease of 5% due to lower operating overhead expense and lower demand creation expense.

Operating overhead expense decreased primarily due to lower other administrative costs, partially offset by unfavorable changes in foreign currency exchange rates.

Demand creation expense decreased primarily due to lower brand marketing expense, partially offset by unfavorable changes in foreign currency exchange rates.

ASIA PACIFIC & LATIN AMERICA

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions) 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 1,234 $ 1,303 -5 % -4 % $ 2,286 $ 2,444 -6 % -3 %

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EARNINGS BEFORE INTEREST AND TAXES $ 460 $ 521 -12 % $ 862 $ 935 -8 %

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

• APLA revenues decreased 2% on a currency-neutral basis due to lower revenues in Korea, Pacific, Central and South America ("CASA") and Japan, partially offset by higher revenues in Mexico.

APLA revenues decreased due to lower revenues in Men's, the Jordan Brand and Women's, partially offset by higher revenues in Kids'.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

• APLA revenues decreased 2% on a currency-neutral basis due to lower revenues in Korea, Central and South America ("CASA") and Southeast Asia and India.

APLA revenues decreased primarily due to lower revenues in Men's and the Jordan Brand.

Wholesale revenues decreased 1%.

NIKE Direct revenues decreased 4% due to digital sales declines of 8%, partially offset by the addition of new stores.

Comparable store sales were flat.

• Footwear revenues decreased 4% on a currency-neutral basis.

Unit sales of footwear decreased 2%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points.

Lower ASP per pair was primarily due to higher discounts and changes in channel mix.

• Apparel revenues were flat on a currency-neutral basis.

Unit sales of apparel decreased 3%, while higher ASP per unit contributed approximately 3 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to strategic pricing actions and lower discounts, partially offset by changes in channel mix.

Reported EBIT decreased 12% reflecting lower revenues and the following:

• Gross margin contraction of approximately 120 basis points primarily due to lower ASP, reflecting changes in channel mix and higher discounts, partially offset by strategic pricing actions, and higher warehousing and logistics costs.

• Selling and administrative expense increase of 4% due to higher operating overhead expense and higher demand creation expense.

Operating overhead expense increased primarily due to higher wage-related expenses and higher other administrative costs.

Demand creation expense increased primarily due to higher brand marketing expense and higher sports marketing expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

• APLA revenues decreased 2% on a currency-neutral basis due to lower revenues in Korea and CASA, partially offset by higher revenues in Mexico.

APLA revenues decreased primarily due to lower revenues in Men's and the Jordan Brand.

Wholesale revenues decreased 1%.

NIKE Direct revenues decreased 4% due to digital sales declines of 11%, partially offset by comparable store sales growth of 4% and the addition of new stores.

• Footwear revenues decreased 3% on a currency-neutral basis.

Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.

Higher ASP per pair was primarily due to strategic pricing actions, partially offset by higher discounts and changes in channel mix.

Unit sales of footwear decreased 3%, while ASP per pair was flat, as higher discounts and changes in channel mix were offset by strategic pricing actions.

• Apparel revenues decreased 1% on a currency-neutral basis.

2 unchanged sentences

Reported EBIT decreased 8% reflecting lower revenues and the following:

• Gross margin expansion of approximately 20 basis points primarily due to higher ASP, due to strategic pricing actions, partially offset by higher discounts and changes in channel mix.

This was partially offset by higher product costs, primarily due to higher product input costs.

• Selling and administrative expense decrease of 11% due to lower demand creation expense and lower operating overhead expense.

Demand creation expense decreased primarily due to lower brand marketing expense, lower sports marketing expense and favorable changes in foreign currency exchange rates.

Operating overhead expense decreased primarily due to favorable changes in foreign currency exchange rates and lower wage-related expenses.

• Gross margin contraction of approximately 60 basis points primarily due to higher warehousing and logistics costs.

This was partially offset by higher ASP, primarily due to strategic pricing actions, partially offset by higher discounts and changes in channel mix.

• Selling and administrative expense decrease of 4% primarily due to lower demand creation expense.

Demand creation expense decreased primarily due to lower brand marketing expense and lower sports marketing expense.

Operating overhead expense was flat as favorable changes in foreign currency exchange rates were offset by higher wage-related expenses and higher other administrative costs.

GLOBAL BRAND DIVISIONS

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Revenues $ 13 $ 12 8 % -2 % $ 27 $ 25 8 % 9 %

2 unchanged sentences

Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

Global Brand Divisions' loss before interest and taxes increased 2% in part due to higher demand creation expense, partially offset by lower operating overhead expense.

The increase in demand creation expense was primarily due to increased brand marketing expense, reflecting investment in key sports events and sports marketing expense.

Lower operating overhead expense was primarily due to lower wage-related expenses.

THREE MONTHS ENDED AUGUST 31,

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

Global Brand Divisions' loss before interest and taxes decreased 3% due to lower operating overhead expense, partially offset by higher demand creation expense.

The decrease in operating overhead expense was due to lower wage-related expenses and lower other administrative costs.

Higher demand creation expense was due to increased sports marketing expense and brand marketing expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

Global Brand Divisions' loss before interest and taxes decreased 1% due to lower operating overhead expense, partially offset by higher demand creation expense.

The decrease in operating overhead expense was primarily due to lower wage-related expenses.

Higher demand creation expense was due to increased brand marketing expense and sports marketing expense.

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2024 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 364 $ 442 -18 % -18 % $ 800 $ 964 -17 % -17 %

9 unchanged sentences

(1) Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights.

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

• Converse revenues decreased 18% on a currency-neutral basis driven by revenue declines in all territories.

Unit sales decreased 11%, driven primarily by a decrease in wholesale, while ASP decreased 3% reflecting higher discounts in direct to consumer.

• Wholesale revenues decreased 16% on a currency-neutral basis, as declines in Western Europe and Asia were partially offset by growth in North America.

Unit sales decreased 12%, while ASP decreased 6% reflecting higher discounts in direct to consumer.

• Wholesale revenues decreased 18% on a currency-neutral basis, as declines in Asia and Western Europe were partially offset by growth in North America.

• Direct to consumer revenues decreased 18% on a currency-neutral basis due to reduced traffic in all territories and lower ASP due to higher discounts.

Reported EBIT decreased 54% reflecting lower revenues and the following:

• Gross margin contraction of approximately 50 basis points primarily due to lower ASP, higher logistics costs and unfavorable changes in standard foreign currency exchange rates.

This was partially offset by lower product costs, lower other costs and growth in licensee revenues.

• Gross margin contraction of approximately 380 basis points primarily due to lower ASP, higher logistics costs and higher other costs, primarily due to inventory obsolescence reserves.

This was partially offset by lower product costs.

• Selling and administrative expense decrease of 1% primarily due to lower operating overhead expense, partially offset by higher demand creation expense.

Operating overhead expense decreased primarily due to lower other administrative costs.

Demand creation expense increased due to higher brand marketing expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

• Converse revenues decreased 16% on a currency-neutral basis driven by revenue declines in all territories.

Unit sales decreased 13%, while ASP decreased 3% reflecting higher discounts in direct to consumer.

• Wholesale revenues decreased 17% on a currency-neutral basis, as declines in Asia and Western Europe were partially offset by growth in North America.

• Direct to consumer revenues decreased 17% on a currency-neutral basis due to reduced traffic in all territories and lower ASP due to higher discounts.

Reported EBIT decreased 38% reflecting lower revenues and the following:

• Gross margin contraction of approximately 200 basis points primarily due to lower ASP, higher logistics costs and unfavorable changes in standard foreign currency exchange rates, partially offset by lower product costs and growth in licensee revenues.

• Selling and administrative expense decrease of 2% primarily due to lower operating overhead expense, partially offset by higher demand creation expense.

Operating overhead expense decreased primarily due to lower wage-related expenses and lower other administrative costs.

Demand creation expense increased due to higher brand marketing expense.

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2024 2023 % CHANGE

2024 2023 % CHANGE 2024 2023 % CHANGE

Revenues $ (25) $ (3) — $ (48) $ (5) —

9 unchanged sentences

and certain other foreign currency derivative instruments.

FIRST QUARTER OF FISCAL 2025 COMPARED TO FIRST QUARTER OF FISCAL 2024

Corporate's loss before interest and taxes decreased $109 million for the first quarter of fiscal 2025, primarily due to the following:

• a favorable change of $63 million primarily related to lower wage-related expenses, reported as a component of consolidated Operating overhead expense;

• a favorable change of $28 million primarily related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net;

• a favorable change of $18 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses;

these results are reported as a component of consolidated gross margin.

SECOND QUARTER OF FISCAL 2025 COMPARED TO SECOND QUARTER OF FISCAL 2024

Corporate's loss before interest and taxes increased $30 million for the second quarter of fiscal 2025, primarily due to the following:

• an unfavorable change of $61 million primarily related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net;

• an unfavorable change of $47 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses, reported as a component of consolidated gross margin;

• a favorable change of $69 million primarily related to lower wage-related expenses and lower other administrative costs, reported as a component of consolidated Operating overhead expense.

FIRST SIX MONTHS OF FISCAL 2025 COMPARED TO FIRST SIX MONTHS OF FISCAL 2024

Corporate's loss before interest and taxes decreased $79 million for the first six months of fiscal 2025, primarily due to the following:

• a favorable change of $130 million primarily related to lower wage-related expenses and lower other administrative costs, reported as a component of consolidated Operating overhead expense;

• an unfavorable change of $33 million primarily related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net;

• an unfavorable change of $29 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses, reported as a component of consolidated gross margin.

FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES

7 unchanged sentences

We do not hold or issue derivative instruments for trading or speculative purposes.

As of and for the three months ended August 31, 2024, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (the "Annual Report").

As of and for the three and six months ended November 30, 2024, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (the "Annual Report").

Refer to Note 3 — Fair Value Measurements and Note 7 — Risk Management and Derivatives in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end.

23 unchanged sentences

Dollars for consolidated reporting results in a cumulative translation adjustment to Accumulated other comprehensive income (loss) within Shareholders' equity.

The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $159 million for the three months ended August 31, 2024.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a detriment of approximately $40 million for the three months ended August 31, 2024.

The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a benefit of approximately $127 million and a detriment of approximately $32 million for the three and six months ended November 30, 2024, respectively.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $37 million and a detriment of approximately $3 million for the three and six months ended November 30, 2024, respectively.

MANAGING TRANSLATIONAL EXPOSURES

11 unchanged sentences

Dollar denominated available-for-sale investments are accounted for as cash flow hedges.

We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net had an unfavorable impact of approximately $12 million on our Income before income taxes for the three months ended August 31, 2024.

We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net had an unfavorable impact of approximately $23 million and $35 million on our Income before income taxes for the three and six months ended November 30, 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW ACTIVITY

Cash provided (used) by operations was an inflow of $394 million for the first three months of fiscal 2025 compared to an outflow of $66 million for the first three months of fiscal 2024.

Net income, adjusted for non-cash items, generated $1,358 million of operating cash inflow for the first three months of fiscal 2025, compared to $1,757 million for the first three months of fiscal 2024.

The net change in certain working capital components and other assets and liabilities resulted in a decrease to Cash provided (used) by operations of $964 million for the first three months of fiscal 2025 compared to a decrease of $1,823 million for the first three months of fiscal 2024.

This net change was primarily impacted by favorable changes to Accounts payable due to the timing of payments, partially offset by unfavorable changes in Inventories due to increased inventory purchases.

Cash provided (used) by investing activities was an outflow of $166 million for the first three months of fiscal 2025, compared to an inflow of $418 million for the first three months of fiscal 2024, primarily driven by the net change in short-term investments (including sales, maturities and purchases).

For the first three months of fiscal 2025, the net change in short-term investments resulted in a cash outflow of $46 million compared to a cash inflow of $672 million for the first three months of fiscal 2024.

Cash provided (used) by financing activities was an outflow of $1,622 million for the first three months of fiscal 2025 compared to an outflow $1,599 million for the first three months of fiscal 2024.

The increased outflow was driven by higher share repurchases of $1,184 million in the first three months of fiscal 2025 compared to $1,133 million in the first three months of fiscal 2024, and higher dividend payments of $558 million in the first three months of fiscal 2025 compared to $524 million in the first three months of fiscal 2024.

During the first three months of fiscal 2025, we repurchased a total of 14.8 million shares of NIKE's Class B Common Stock for $1,193 million (an average price of $80.60 per share) under the four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022.

As of August 31, 2024, we have repurchased 99.7 million shares at a cost of approximately $10.2 billion (an average price of $102.78 per share) under this $18 billion share repurchase program.

We continue to expect funding of share repurchases will come from operating cash flows.

Cash provided (used) by operations was an inflow of $1,443 million for the first six months of fiscal 2025 compared to an inflow of $2,751 million for the first six months of fiscal 2024.

Net income, adjusted for non-cash items, generated $2,824 million of operating cash inflow for the first six months of fiscal 2025, compared to $3,613 million for the first six months of fiscal 2024.

The net change in certain working capital components and other assets and liabilities resulted in a decrease to cash provided by operations of $1,381 million for the first six months of fiscal 2025 compared to a decrease of $862 million for the first six months of fiscal 2024.

This net change was primarily impacted by unfavorable changes to Inventories due to lower sales in the current period and reduced inventory purchases in the prior year.

Cash provided (used) by investing activities was an outflow of $240 million for the first six months of fiscal 2025, compared to an inflow of $875 million for the first six months of fiscal 2024, primarily driven by the net change in short-term investments (including sales, maturities and purchases).

For the first six months of fiscal 2025, the net change in short-term investments resulted in a cash outflow of $1 million compared to a cash inflow of $1,343 million for the first six months of fiscal 2024, primarily reflecting higher maturities in the prior period.

Cash provided (used) by financing activities was an outflow of $3,070 million for the first six months of fiscal 2025 compared to an outflow $3,151 million for the first six months of fiscal 2024.

The decreased outflow was primarily due to lower share repurchases of $2,280 million in the first six months of fiscal 2025 compared to $2,331 million in the first six months of fiscal 2024, offset by higher dividend payments of $1,115 million in the first six months of fiscal 2025 compared to $1,047 million in the first six months of fiscal 2024.

During the first six months of fiscal 2025, we repurchased a total of 27.9 million shares of NIKE's Class B Common Stock for $2,254 million (an average price of $80.83 per share) under the four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022.

As of November 30, 2024, we have repurchased 112.8 million shares at a cost of approximately $11.3 billion (an average price of $100.26 per share) under this $18 billion share repurchase program.

We continue to expect funding of share repurchases will come from operating cash flows, excess cash and/or proceeds from debt.

The timing and the amount of share repurchases will be dictated by our capital needs and stock market conditions.

3 unchanged sentences

The Shelf expires on July 21, 2025.

As of August 31, 2024, our committed credit facilities were unchanged from the information previously reported within the Annual Report.

As of November 30, 2024, our committed credit facilities were unchanged from the information previously reported within the Annual Report.

We currently have long-term debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively.

Any changes to these ratings could result in interest rate and facility fee changes.

As of August 31, 2024, we were in full compliance with the covenants under our facilities and believe it is unlikely we will fail to meet any of the covenants in the foreseeable future.

As of August 31, 2024 and May 31, 2024, no amounts were outstanding under our committed credit facilities.

As of November 30, 2024, we were in full compliance with the covenants under our facilities and believe it is unlikely we will fail to meet any of the covenants in the foreseeable future.

As of November 30, 2024 and May 31, 2024, no amounts were outstanding under our committed credit facilities.

Liquidity is also provided by our $3 billion commercial paper program.

As of and for the three months ended August 31, 2024, we did not have any borrowings outstanding under our $3 billion program.

As of and for the three months ended November 30, 2024, we did not have any borrowings outstanding under our $3 billion program.

We may issue commercial paper or other debt securities depending on general corporate needs.

1 unchanged sentence

however, future volatility may increase costs associated with issuing commercial paper or other debt instruments or affect our ability to access those markets.

As of August 31, 2024, we had Cash and equivalents and Short-term investments totaling $10.3 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S.

As of November 30, 2024, we had Cash and equivalents and Short-term investments totaling $9.8 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S.

Treasury obligations and other investment grade fixed-income securities.

1 unchanged sentence

All of our investments are investment grade to minimize our credit risk.

While individual securities have varying durations, as of August 31, 2024, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 85 days.

While individual securities have varying durations, as of November 30, 2024, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 99 days.

We believe that existing Cash and equivalents, Short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.

There have been no significant changes to the material cash requirements reported within the Annual Report.

CONTRACTUAL OBLIGATIONS

As a result of renewals of, and additions to, outstanding endorsement contracts, including associated marketing commitments, cash payments due under these contracts have increased from what was reported within our Annual Report.

Obligations under these endorsement contracts as of November 30, 2024, and significant contracts entered into through the date of this report, were $15.9 billion, with $1.9 billion payable within 12 months.

Other than the changes reported above, there have been no significant changes to the material cash requirements reported within our Annual Report.

OFF-BALANCE SHEET ARRANGEMENTS

As of August 31, 2024, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.

As of November 30, 2024, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.

NEW ACCOUNTING PRONOUNCEMENTS

3 unchanged sentences

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

We believe the assumptions and judgments involved in the accounting estimates described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Annual Report have the greatest potential impact on our financial statements, so we consider these to be our critical accounting estimates.

We believe the assumptions and judgments involved in the accounting estimates described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section within the Annual Report have the greatest potential impact on our financial statements, so we consider these to be our critical accounting estimates.

Actual results could differ from these estimates.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis