What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-07-17 compared with 2024-07-25 · 292 added, 222 removed, 453 unchanged (53% of the section changed)

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We are the largest seller of athletic footwear and apparel in the world.

We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.

Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories businesses.

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 continuing to invest in our NIKE Direct operations while also increasing investment to elevate and differentiate our brand experience within our wholesale partners.

In addition, in the third quarter of fiscal 2024, we announced an enterprise-wide initiative to prioritize investment to fuel future growth including taking steps to streamline the organization.

This resulted in a net reduction of our global workforce and we expect to reinvest a majority of the future annual wage savings from these actions to support this initiative.

We also continue to invest in a global Enterprise Resource Planning Platform, data and analytics, demand sensing, insight gathering and other areas to create an end-to end technology foundation to serve our consumer with speed and scale.

We sell our products through two distribution channels:

NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital"), and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.

Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories.

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

FISCAL 2025 FINANCIAL HIGHLIGHTS

Revenues for fiscal 2025 were $46.3 billion compared to $51.4 billion for fiscal 2024

• NIKE Direct revenues grew 1% from $21.3 billion in fiscal 2023 to $21.5 billion in fiscal 2024, and represented approximately 44% of total NIKE Brand revenues for fiscal 2024

• NIKE Brand wholesale revenues increased 1% on a reported basis and 2% on a currency-neutral basis

• Gross margin increased 110 basis points to 44.6%, primarily due to strategic pricing actions and lower ocean freight rates and logistics costs, partially offset by higher product input costs, lower margin in NIKE Direct and unfavorable changes in net foreign currency exchange rates

• Income before income taxes included a restructuring charge of $443 million related to the streamlining of our organization, primarily associated with employee severance costs and accelerated stock-based compensation expense.

For more information, refer to Note 19 — Restructuring within the accompanying Notes to the Consolidated Financial Statements.

• Inventories as of May 31, 2024 were $7.5 billion, a decrease of 11% compared to the prior year, primarily due to a decrease in units

• NIKE Direct revenues declined 13% from $21.5 billion in fiscal 2024 to $18.8 billion in fiscal 2025, and represented approximately 42% of total NIKE Brand revenues for fiscal 2025

• NIKE Brand wholesale revenues decreased 7% on a reported basis and 6% on a currency-neutral basis

• Gross margin decreased 190 basis points to 42.7%, primarily due to higher discounts, changes in channel mix and higher inventory obsolescence reserves, partially offset by lower product costs

• Inventories as of May 31, 2025 were $7.5 billion, flat compared to the prior year

• We returned $5.3 billion to our shareholders in fiscal 2025 through share repurchases and dividends

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ROIC is considered a non-GAAP financial measure, see "Use of Non-GAAP Financial Measures" for additional information.

Our results for fiscal 2025 reflected a decrease in traffic across NIKE Direct and our actions to reduce supply of certain footwear products in the marketplace through increased markdowns across NIKE Direct and discounts and higher sales returns with our wholesale partners, which negatively impacted our Revenues and gross margin.

For discussion related to the results of operations and changes in financial condition for fiscal 2024 compared to fiscal 2023 refer to Part II, Item 7.

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2025 FORM 10-K 29

CURRENT ECONOMIC CONDITIONS AND OTHER FACTORS IMPACTING OUR BUSINESS

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

• Consumer Spending:

In fiscal 2024, consumers continued to spend more cautiously as the global economy remains uncertain and promotional activity remained high across our industry.

We will continue to closely monitor macroeconomic and geopolitical conditions, including potential impacts of inflation and higher interest rates on consumer spending behavior.

• Cost Inflationary Pressures:

Inflationary pressures, including higher product input costs, continued to negatively impact our gross margin with more pronounced impacts in the first nine months of fiscal 2024.

These negative impacts were more than offset by the strategic pricing actions we have taken through fiscal 2024, as well as improvements in ocean freight rates and logistics costs we started to realize at the beginning of the second quarter of fiscal 2024.

• Supply Chain Conditions:

During fiscal 2024 and as of May 31, 2024, our inventory levels were healthy, reflecting our proactive actions taken to manage our inventory supply.

• 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".

• Product Lifecycle Management:

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

This had a negative impact on our revenues, specifically NIKE Brand Digital revenues in the fourth quarter of fiscal 2024.

FACTORS IMPACTING OUR BUSINESS

We are navigating through several external factors that create uncertainty and volatility in the operating environment including, but not limited to, geopolitical dynamics, tax regulation, fluctuating foreign exchange rates and new tariffs.

As a result of the new tariffs, we expect to incur a material gross incremental increase to Cost of sales.

Over the next several quarters, we are taking actions to mitigate the impact of the new tariffs, however for fiscal 2026, we expect a negative impact on gross margin.

We will continue to monitor changes to the import and export policies of the U.S.

and other countries that could require us to change the way in which we do business.

These factors, and any changes to these factors, among others, could have a material adverse impact on consumer behavior and on our future Revenues and overall profitability.

Despite these factors, we are focused on driving distinction within key sports, building a complete product portfolio, creating stories to inspire and emotionally connect with consumers, and elevating and growing the entire marketplace as we continue to take 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:

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 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.

These actions have had, and in the future could have, a negative impact on our Revenues and gross margin as well as higher Demand creation expense.

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

For more information refer to Item 1A Risk Factors, within Part 1, Item 1, Business.

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EARNINGS BEFORE INTEREST AND TAXES

$ 3,778 $ 6,539 $ 6,195

EBIT Margin :

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Revenues $ 46,309 $ 51,362 $ 51,217

EBIT Margin 12.7% 12.1% 14.7%

8.2% 12.7% 12.1%

2025 FORM 10-K 30

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Income tax adjustment (1)

(976) (1,130)

Earnings before interest and after taxes $ 3,133 $ 5,563

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Currency-neutral revenues are calculated using actual exchange rates in use during the comparative prior year period in place of the exchange rates in use during the current period.

Wholesale equivalent revenues :

References to wholesale equivalent revenues are intended to provide context as to the total size of our NIKE Brand market footprint if we had no NIKE Direct operations.

NIKE Brand wholesale equivalent revenues consist of (1) sales to external wholesale customers and (2) internal sales from our wholesale operations to our NIKE Direct operations, which are charged at prices comparable to those charged to external wholesale customers.

Beginning in fiscal 2025, with the continued rollout of a new Enterprise Resource Planning Platform, the Company will replace wholesale equivalent revenues and gross margin drivers with a comparable U.S.

COMPARABLE STORE SALES

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TOTAL NIKE BRAND REVENUES

$ 44,714 $ 49,322 -9 % -9 % $ 48,763 1 % 1 %

Converse 1,692 2,082 -19 % -18 % 2,427 -14 % -15 %

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TOTAL NIKE BRAND REVENUES $ 44,714 $ 49,322 -9 % -9 % $ 48,763 1 % 1 %

NIKE Brand Revenues on a Wholesale Equivalent Basis (1) :

Sales to Wholesale Customers $ 27,758 $ 27,397 1 % 2 % $ 25,608 7 % 14 %

Sales from our Wholesale Operations to NIKE Direct Operations 13,009 12,730 2 % 2 % 10,543 21 % 27 %

TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,767 $ 40,127 2 % 2 % $ 36,151 11 % 18 %

NIKE Brand Wholesale Equivalent Revenues by:

Supplemental NIKE Brand Revenue Details:

NIKE Brand Revenues by:

Men's $ 23,216 $ 24,785 -6 % -6 % $ 24,445 1 % 2 %

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(1,234) (594) -108 % -106 % (363) -64 % -67 %

TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES $ 40,767 $ 40,127 2 % 2 % $ 36,151 11 % 18 %

(1) The percent change excluding currency changes and the presentation of wholesale equivalent revenues represent non-GAAP financial measures.

Global Brand Divisions (2)

48 45 7 % 10 % 58 -22 % -25 %

TOTAL NIKE BRAND REVENUES

$ 44,714 $ 49,322 -9 % -9 % $ 48,763 1 % 1 %

(1) The percent change excluding currency changes represents a non-GAAP financial measure.

For additional information, see "Use of Non-GAAP Financial Measures".

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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.

(4) Beginning in fiscal 2025, with the continued rollout of a new Enterprise Resource Planning Platform, we have removed the non-GAAP financial measure of wholesale equivalent revenues.

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

Prior year amounts have been recast to conform to fiscal 2025 presentation.

(5) Others include products not allocated to Men's, Women's, Kids' and Jordan Brand, as well as certain adjustments that are not allocated to products designated by consumer.

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FISCAL 2025 COMPARED TO FISCAL 2024

Revenues for fiscal 2024 were $51.4 billion compared to $51.2 billion for fiscal 2023.

On a currency-neutral basis, NIKE, Inc.

Revenues increased 1%, as higher revenues in Greater China and Asia Pacific & Latin America ("APLA"), which each increased NIKE, Inc.

Revenues by 1 percentage point, were partially offset by lower revenues in Converse, which reduced NIKE, Inc.

Revenues by approximately 1 percentage point.

Revenues were $46.3 billion in fiscal 2025 compared to $51.4 billion for fiscal 2024, which decreased 10% and 9% on a reported and currency-neutral basis, respectively.

On a currency-neutral basis, the decrease was primarily due to lower revenues in North America, Europe, Middle East & Africa ("EMEA") and Greater China which each decreased NIKE, Inc.

Revenues by 4, 3 and 2 percentage points, respectively.

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

Revenues, increased 1% on both a reported and currency-neutral basis.

The increase, on a currency-neutral basis, was primarily due to higher revenues in the Jordan Brand and Men's.

• NIKE Brand footwear revenues increased 1% on a currency-neutral basis, primarily due to higher revenues in the Jordan Brand, Men's and Women's.

Unit sales of footwear decreased 2%, while higher average selling price ("ASP") per pair contributed approximately 3 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP, net of discounts, on a wholesale equivalent basis, and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• NIKE Brand apparel revenues were flat on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, offset by higher revenues in Kids'.

Unit sales of apparel decreased 9%, while higher ASP per unit contributed approximately 9 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price, off-price and NIKE Direct ASPs.

• NIKE Brand wholesale revenues increased 1% on a reported basis and 2% on a currency-neutral basis, compared to fiscal 2023.

Higher revenues in Greater China and APLA were partially offset by lower revenues in North America.

• NIKE Direct revenues increased 1% to $21.5 billion in fiscal 2024 compared to $21.3 billion in fiscal 2023.

On a currency-neutral basis, NIKE Direct revenues increased 1%, primarily driven by comparable store sales growth of 3% and the addition of new stores, partially offset by declines in NIKE Brand Digital sales of 3%, reflecting reduced digital traffic.

Revenues, decreased 9% on both a reported and 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 8%, while lower average selling price ("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.

• NIKE Brand apparel revenues decreased 5% on a currency-neutral basis.

Unit sales of apparel decreased 5%, while ASP per unit was flat as strategic pricing actions were offset by changes in channel mix and higher discounts.

• NIKE Brand wholesale revenues decreased 7% on a reported basis and 6% on a currency-neutral basis, compared to fiscal 2024.

The decrease, on a currency-neutral basis, was driven by lower revenues across all geographies.

• NIKE Direct revenues were $18.8 billion in fiscal 2025 compared to $21.5 billion in fiscal 2024.

On a currency-neutral basis, NIKE Direct revenues decreased 12% due to declines in NIKE Brand Digital sales of 20% from $12.1 billion in fiscal 2024 to $9.6 billion in fiscal 2025, while NIKE store sales were flat.

Comparable store sales decreased 1%.

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

NIKE Brand Digital sales were $12.1 billion for fiscal 2024 compared to $12.4 billion for fiscal 2023.

Within NIKE Direct revenues, there were certain reclassifications made between NIKE-owned retail stores and NIKE Brand Digital in the prior period to conform to current period presentation.

The reclassifications did not have a material impact on our Consolidated Financial Statements.

2025 FORM 10-K 34

FISCAL 2025 COMPARED TO FISCAL 2024

For fiscal 2024, our consolidated gross profit increased 3% to $22,887 million compared to $22,292 million for fiscal 2023.

Gross margin increased 110 basis points to 44.6% for fiscal 2024 compared to 43.5% for fiscal 2023 due to the following:

The increase in gross margin for fiscal 2024 was primarily due to:

• Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 200 basis points), primarily due to strategic pricing actions;

• Lower NIKE Brand product costs, on a wholesale equivalent basis (increasing gross margin approximately 10 basis points), primarily due to lower ocean freight rates and logistics costs largely offset by higher product input costs;

• Lower other costs (increasing gross margin approximately 10 basis points).

This was partially offset by:

For fiscal 2025, our consolidated gross profit decreased 14% to $19,790 million compared to $22,887 million for fiscal 2024.

Gross margin decreased 190 basis points to 42.7% for fiscal 2025 compared to 44.6% for fiscal 2024 due to the following:

• Lower NIKE Brand ASP (decreasing gross margin approximately 180 basis points), primarily due to higher discounts and changes in channel mix, partially offset by strategic pricing actions;

• Higher other costs (decreasing gross margin approximately 90 basis points), including higher inventory obsolescence reserves;

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

• Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 10 basis points).

• Lower margin in our NIKE Direct business (decreasing gross margin approximately 40 basis points);

• Lower off-price margin, on a wholesale equivalent basis (decreasing gross margin approximately 20 basis points);

• Restructuring charges (decreasing gross margin approximately 10 basis points).

This was partially offset by:

• Lower NIKE Brand product costs (increasing gross margin approximately 80 basis points);

• Lower warehousing and logistics costs (increasing gross margin approximately 20 basis points);

• Restructuring charges in the prior year (increasing gross margin approximately 10 basis points).

TOTAL SELLING AND ADMINISTRATIVE EXPENSE

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Operating overhead expense (2)

11,399 12,291 -7 % 12,317 0 %

Total selling and administrative expense $ 16,088 $ 16,576 -3 % $ 16,377 1 %

% of revenues 34.7 % 32.3 % 240 bps 32.0 % 30 bps

(1) Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary product, television, digital and print advertising and media costs, brand events and retail brand presentation.

(1) Demand creation expense consists of brand marketing expense and sports marketing expense.

Brand marketing expense includes advertising and promotion costs such as production and media costs, digital marketing expense, brand events and retail brand presentation costs.

Sports marketing expense includes 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.

FISCAL 2025 COMPARED TO FISCAL 2024

Demand creation expense increased 6% for fiscal 2024, primarily due to higher advertising and marketing expense, digital marketing and sports marketing expense.

Demand creation expense increased 9%, due to higher brand marketing expense, reflecting investment in key sports events, and higher sports marketing expense.

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

Operating overhead expense was flat, as lower wage-related expenses and lower technology spend were offset by restructuring charges.

Operating overhead expense decreased 7%, due to restructuring charges in the prior year, 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.

For more information related to our organizational realignment and related costs, refer to Note 19 — Restructuring within the accompanying Notes to the Consolidated Financial Statements.

2025 FORM 10-K 35

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FISCAL 2025 COMPARED TO FISCAL 2024

Other (income) expense, net decreased from $280 million of other income, net in fiscal 2023 to $228 million in the current fiscal year, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges, as well as net favorable settlements of legal matters in the prior year.

These items were partially offset by the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor.

For more information related to the sale of our entities in Argentina and Uruguay to a third-party distributor, see Note 18 — Divestitures within the accompanying Notes to the Consolidated Financial Statements.

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 on our Income before income taxes of $68 million for fiscal 2024.

Other (income) expense, net decreased from $228 million of other income, net, to $76 million of other income, net, primarily due to a net unfavorable change in foreign currency conversion gains and losses, including hedges.

FISCAL 2025 FISCAL 2024 % CHANGE FISCAL 2023 % CHANGE

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FISCAL 2025 COMPARED TO FISCAL 2024

Our effective tax rate was 14.9% for fiscal 2024, compared to 18.2% for fiscal 2023, primarily due to changes in earnings mix and one-time items including the benefit provided by the delay of the effective date of certain U.S.

foreign tax credit regulations in the first quarter of fiscal 2024.

The OECD and the Inclusive Framework has put forth Pillar Two proposals that ensure a minimal level of taxation.

Several countries in which we operate, including several European Union member states, have adopted domestic legislation to implement the Inclusive Framework's global corporate minimum tax rate of fifteen percent which will be effective for NIKE beginning June 1, 2024.

Other countries are also actively considering changes to their tax laws to adopt certain parts of the Inclusive Framework's proposals.

Based on our current analysis of Pillar Two provisions, we do not expect these tax law changes to have a material impact on our Consolidated Financial Statements;

however, we will continue to evaluate their impact as additional information becomes available.

Our effective tax rate was 17.1% for fiscal 2025, compared to 14.9% for fiscal 2024, primarily due to changes in earnings mix, decreased benefits from stock-based compensation and non-recurring one-time benefits in fiscal 2024 including the impact of the delay of the effective date of certain U.S.

foreign tax credit regulations.

These impacts were partially offset by a one-time, non-cash deferred tax benefit in fiscal 2025 provided by US tax regulations related to foreign currency gains and losses.

On July 4, 2025, the U.S.

government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S.

corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act.

Certain provisions are effective for NIKE beginning fiscal 2026.

We are evaluating the future impact of these tax law changes on our financial statements.

2025 FORM 10-K 36

OPERATING SEGMENTS

As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, our operating segments are evidence of the structure of the Company's internal organization.

The NIKE Brand segments are defined by geographic regions for operations participating in NIKE Brand sales activity.

SEGMENT INFORMATION

See Note 15 — Segment Information in the accompanying Notes to the Consolidated Financial Statements for a description of our segments and related information.

The breakdown of Revenues is as follows:

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For additional information, see "Use of Non-GAAP Financial Measures".

(2) For additional information on the transition of our NIKE Brand businesses within our Central and South America ("CASA") territory to a third-party distributor, see Note 18 — Divestitures of the Notes to Consolidated Financial Statements.

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

The primary financial measure used by the Company to evaluate performance is Earnings Before Interest and Taxes ("EBIT").

As discussed in Note 15 — Operating Segments and Related Information in the accompanying Notes to the Consolidated Financial Statements, certain corporate costs are not included in EBIT.

The primary financial measure used by the Company to evaluate performance of its segments is EBIT.

For additional information on our segments, refer to Note 15 — Segment Information in the accompanying Notes to the Consolidated Financial Statements.

The breakdown of EBIT is as follows:

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TOTAL REVENUES $ 19,572 $ 21,396 -9 % -8 % $ 21,608 -1 % -1 %

Cost of Sales

11,056 11,899 -7 % 12,497 -5 %

8,516 9,497 -10 % 9,111 4 %

43.5% 44.4% -90 bps 42.2% 220 bps

Demand creation expense

1,633 1,495 9 % 1,455 3 %

Operating overhead expense

2,150 2,189 -2 % 2,207 -1 %

Total selling and administrative expense

3,783 3,684 3 % 3,662 1 %

Other segment items

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EARNINGS BEFORE INTEREST AND TAXES $ 4,735 $ 5,822 -19 % $ 5,454 7 %

FISCAL 2025 COMPARED TO FISCAL 2024

• North America revenues decreased 1% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, partially offset by higher revenues in the Jordan Brand.

Wholesale revenues decreased 2%, primarily reflecting liquidation of excess inventory in the prior year.

NIKE Direct revenues increased 1%, primarily driven by the addition of new stores, partially offset by a decline in digital sales of 1%.

Comparable store sales for fiscal 2024 were flat.

• Footwear revenues decreased 2% on a currency-neutral basis due to lower revenues in Men's, Kids' and Women's, partially offset by higher revenues in the Jordan Brand.

Unit sales of footwear decreased 7%, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• Apparel revenues were flat on a currency-neutral basis due to lower revenues in Men's, Women's and the Jordan Brand, offset by higher revenues in Kids'.

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

Higher ASP per unit was primarily due to higher full-price ASP.

Reported EBIT increased 7% reflecting lower revenues and the following:

• Gross margin expansion of 220 basis points primarily due to higher full-price ASP, net of discounts, largely due to strategic pricing actions and lower discounts, as well as lower product costs.

Lower product costs were primarily due to lower ocean freight rates and logistics costs, partially offset by higher product input costs.

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

The increase in demand creation expense was primarily due to higher digital marketing and sports marketing expense.

Operating overhead expense decreased primarily due to lower wage-related expenses, partially offset by higher other administrative costs.

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

Wholesale revenues decreased 5%.

NIKE Direct revenues decreased 12% due to declines in digital sales of 19% and store sales of 1%.

Comparable store sales decreased 1%.

• Footwear revenues decreased 13% on a currency-neutral basis.

Unit sales of footwear decreased 10%, 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 product mix.

• Apparel revenues decreased 2% on a currency-neutral basis.

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

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

Reported EBIT decreased 19% reflecting lower revenues and the following:

• Gross margin contraction of 90 basis points primarily due to lower ASP and higher inventory obsolescence reserves, partially offset by lower product costs.

Lower ASP primarily reflects higher discounts and changes in channel mix.

• Demand creation expense increased 9% primarily due to higher brand marketing expense, reflecting investment in key sports events.

• Operating overhead expense decreased 2% due to lower wage-related expenses and lower other administrative costs.

2025 FORM 10-K 38

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TOTAL REVENUES $ 12,257 $ 13,607 -10 % -10 % $ 13,418 1 % 0 %

Cost of Sales 6,967 7,589 -8 % 7,340 3 %

5,290 6,018 -12 % 6,078 -1 %

Gross margin 43.2% 44.2% -100 bps 45.3% -110 bps

Demand creation expense 1,222 1,114 10 % 1,050 6 %

Operating overhead expense 1,479 1,517 -3 % 1,500 1 %

Total selling and administrative expense 2,701 2,631 3 % 2,550 3 %

Other segment items

14 (1) — (3) —

EARNINGS BEFORE INTEREST AND TAXES $ 2,575 $ 3,388 -24 % $ 3,531 -4 %

FISCAL 2025 COMPARED TO FISCAL 2024

• EMEA revenues were flat on a currency-neutral basis, primarily due to lower revenues in Women's and Kids', offset by higher revenues in Men's.

Wholesale revenues were flat.

NIKE Direct revenues were flat as a decline in digital sales of 5% was offset by comparable store sales growth of 7% and the addition of new stores.

• Footwear revenues increased 1% on a currency-neutral basis, primarily due to higher revenues in Men's, partially offset by lower revenues in Kids'.

Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• Apparel revenues decreased 6% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's.

Unit sales of apparel decreased 17%, while higher ASP per unit contributed approximately 11 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price and NIKE Direct ASPs.

Reported EBIT decreased 4% reflecting higher revenues and the following:

• Gross margin contraction of 110 basis points largely due to unfavorable changes in standard foreign currency exchange rates, partially offset by higher full-price ASP, net of discounts, primarily due to strategic pricing actions, as well as lower other costs and lower product costs, reflecting lower ocean freight rates and logistics costs.

• Selling and administrative expense increase of 3% due to higher demand creation and operating overhead expense.

Demand creation expense increased primarily due to higher advertising and marketing expense, unfavorable changes in foreign exchange rates and higher sports marketing expense.

Operating overhead expense increased primarily due to unfavorable changes in foreign currency exchange rates.

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

Wholesale revenues decreased 6%.

NIKE Direct revenues decreased 16% due to a decline in digital sales of 30%, partially offset by an increase in store sales of 5%.

Comparable store sales increased 5%.

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

Unit sales of footwear decreased 8%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points.

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

• Apparel revenues decreased 9% on a currency-neutral basis.

Unit sales of apparel decreased 6%, 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, product mix and higher discounts.

Reported EBIT decreased 24% reflecting lower revenues and the following:

• Gross margin contraction of 100 basis points primarily due to lower ASP, partially offset by lower warehousing, logistics and product costs.

Lower ASP primarily reflects changes in channel mix and higher discounts, partially offset by strategic pricing actions.

• Demand creation expense increased 10% primarily due to higher brand marketing expense, reflecting investment in key sports events, and higher sports marketing expense.

• Operating overhead expense decreased 3% primarily due to lower wage-related expenses.

2025 FORM 10-K 39

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TOTAL REVENUES $ 6,586 $ 7,545 -13 % -12 % $ 7,248 4 % 8 %

Cost of Sales 3,558 3,761 -5 % 3,552 6 %

3,028 3,784 -20 % 3,696 2 %

Gross margin 46.0% 50.2% -420 bps 51.0% -80 bps

Demand creation expense 529 519 2 % 499 4 %

Operating overhead expense 973 1,019 -5 % 1,012 1 %

Total selling and administrative expense 1,502 1,538 -2 % 1,511 2 %

Other segment items

(76) (63) — (98) —

EARNINGS BEFORE INTEREST AND TAXES $ 1,602 $ 2,309 -31 % $ 2,283 1 %

FISCAL 2025 COMPARED TO FISCAL 2024

• Greater China revenues increased 8% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.

Wholesale revenues increased 15%.

NIKE Direct revenues increased 1%, driven by comparable store sales growth of 1% and the addition of new stores, partially offset by a decline in digital sales of 8%.

• Footwear revenues increased 6% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.

Unit sales of footwear increased 8%, while lower ASP per pair reduced footwear revenues by approximately 2 percentage points.

Lower ASP per pair was primarily due to lower NIKE Direct ASP, partially offset by higher full-price ASP.

• Apparel revenues increased 14% on a currency-neutral basis, primarily due to higher revenues in Men's and Women's.

Unit sales of apparel increased 7%, while higher ASP per unit contributed approximately 7 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher NIKE Direct, full-price and off-price ASPs as well as a higher mix of full-price sales.

Reported EBIT increased 1% reflecting higher revenues and the following:

• Gross margin contraction of approximately 80 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates, partially offset by higher full-price ASP, net of discounts, and lower other costs.

The higher full-price ASP, net of discounts, was largely due to strategic pricing actions, partially offset by product mix.

• Selling and administrative expense increase of 2% due to higher demand creation and operating overhead expense.

Demand creation expense increased primarily due to higher advertising and marketing expense and retail brand presentation expense, partially offset by favorable changes in foreign currency exchange rates.

Operating overhead expense increased primarily due to higher other administrative costs, partially offset by favorable changes in foreign currency exchange rates.

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

Wholesale revenues decreased 13%.

NIKE Direct revenues decreased 12% due to declines in digital sales of 22% and store sales of 6%.

Comparable store sales decreased 7%.

• Footwear revenues decreased 13% on a currency-neutral basis.

Unit sales of footwear decreased 11%, 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.

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

Unit sales of apparel decreased 17%, while higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth.

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

Reported EBIT decreased 31% reflecting lower revenues and the following:

• Gross margin contraction of approximately 420 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates and higher inventory obsolescence reserves, partially offset by higher ASP.

Higher ASP primarily reflects strategic pricing actions, partially offset by higher discounts.

• Demand creation expense increased 2% primarily due to higher sports marketing expense and higher brand marketing expense.

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

2025 FORM 10-K 40

9 unchanged sentences

TOTAL REVENUES $ 6,251 $ 6,729 -7 % -3 % $ 6,431 5 % 5 %

Cost of Sales 3,502 3,639 -4 % 3,337 9 %

2,749 3,090 -11 % 3,094 0 %

Gross margin 44.0% 45.9% -190 bps 48.1% -220 bps

Demand creation expense 421 407 3 % 373 9 %

Operating overhead expense 804 801 0 % 789 2 %

Total selling and administrative expense 1,225 1,208 1 % 1,162 4 %

Other segment items

(3) (3) — — —

EARNINGS BEFORE INTEREST AND TAXES $ 1,527 $ 1,885 -19 % $ 1,932 -2 %

We completed the sale of our entity in Chile and our entities in Argentina and Uruguay to third-party distributors in the first and second quarters of fiscal 2023, respectively.

The impacts of closing these transactions are included within Corporate and are not reflected in the APLA operating segment results.

This completed the transition of our NIKE Brand businesses within our CASA marketplace, which now reflects a full distributor operating model.

For more information see Note 18 — Divestitures within the accompanying Notes to the Consolidated Financial Statements.

FISCAL 2025 COMPARED TO FISCAL 2024

• APLA revenues increased 5% on a currency-neutral basis primarily due to higher revenues in Southeast Asia & India, Mexico and Japan.

Within our CASA territory, the transition of our Chile, Argentina and Uruguay entities to a third-party distributor operating model did not have a material impact on APLA revenues.

Revenues increased due to overall growth in Men's, Women's, the Jordan Brand and Kids'.

Wholesale revenues increased 6%.

NIKE Direct revenues increased 4%, driven by comparable store sales growth of 10% and the addition of new stores, partially offset by a decline in digital sales of 2%.

• Footwear revenues increased 7% on a currency-neutral basis due to higher revenues in Men's, Women's, the Jordan Brand and Kids'.

Unit sales of footwear increased 6%, while higher ASP per pair contributed approximately 1 percentage point of footwear revenue growth.

Higher ASP per pair was primarily due to higher full-price ASP, off-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

• Apparel revenues decreased 2% on a currency-neutral basis, primarily due to lower revenues in Men's and Women's, partially offset by higher revenues in the Jordan Brand.

• Asia Pacific & Latin America ("APLA") revenues decreased 3% on a currency-neutral basis primarily due to lower revenues in Southeast Asia & India and Korea, partially offset by higher revenues in Mexico.

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

Wholesale revenues decreased 3%.

NIKE Direct revenues decreased 3% due to a decline in digital sales of 9%, partially offset by an increase in store sales of 4%.

Comparable store sales increased 1%.

• 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 decreased 1% on a currency-neutral basis.

Unit sales of apparel decreased 3%, while higher ASP per unit contributed approximately 2 percentage points of apparel revenue growth.

Higher ASP per unit was primarily due to higher full-price ASP, off-price ASP and a higher mix of NIKE Direct sales, partially offset by lower NIKE Direct ASP.

Reported EBIT decreased 2% reflecting higher revenues and the following:

• Gross margin contraction of approximately 220 basis points primarily due to unfavorable changes in standard foreign currency exchange rates, lower margin in NIKE Direct and higher product costs, reflecting higher product input costs and product mix.

This was partially offset by higher full-price ASP, net of discounts, primarily due to product mix and strategic pricing actions.

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

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

Operating overhead expense increased primarily due to higher other administrative costs.

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

Reported EBIT decreased 19% reflecting lower revenues and the following:

• Gross margin contraction of approximately 190 basis points primarily due to unfavorable changes in standard foreign currency exchange rates, lower ASP and higher warehousing and logistics costs.

Lower ASP reflects product mix, higher discounts and changes in channel mix, partially offset by strategic pricing actions.

• Demand creation expense increased 3%, due to higher brand marketing expense and higher sports marketing expense, partially offset by favorable changes in foreign currency exchange rates.

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

2025 FORM 10-K 41

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(Dollars in millions)

FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Revenues $ 45 $ 58 -22 % -25 % $ 102 -43 % -43 %

FISCAL 2025 FISCAL 2024 % CHANGE FISCAL 2023 % CHANGE

$ 48 $ 45 7 % $ 58 -22 %

Cost of Sales 634 602 5 % 516 17 %

(586) (557) -5 % (458) -22 %

Demand creation expense 716 596 20 % 511 17 %

Operating overhead expense 3,401 3,534 -4 % 3,881 -9 %

Total selling and administrative expense 4,117 4,130 0 % 4,392 -6 %

Other segment items

(4) 33 — (9) —

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

Global Brand Divisions primarily represent demand creation and operating overhead expense, including product creation and design expenses that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology.

$ (4,699) $ (4,720) 0 % $ (4,841) 2 %

Global Brand Divisions primarily represents costs, including product creation and design expenses, that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology.

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

FISCAL 2025 COMPARED TO FISCAL 2024

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

Lower operating overhead expense was primarily due to lower wage-related expenses, technology spend and other administrative costs.

The increase in demand creation expense was primarily due to higher advertising and marketing expense as well as digital marketing.

(Dollars in millions)

FISCAL 2024 FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2022 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Global Brand Divisions' loss before interest and taxes was flat primarily due to lower Operating overhead expense, offset by higher Demand creation expense.

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

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

(Dollars in millions) FISCAL 2025 FISCAL 2024 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES FISCAL 2023 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES

Footwear $ 1,457 $ 1,800 -19 % -19 % $ 2,155 -16 % -17 %

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TOTAL REVENUES

$ 1,692 $ 2,082 -19 % -18 % $ 2,427 -14 % -15 %

Sales to Wholesale Customers

$ 875 $ 1,098 -20 % -20 % $ 1,299 -15 % -16 %

Sales through Direct to Consumer 694 832 -17 % -17 % 974 -15 % -14 %

1 unchanged sentence

TOTAL REVENUES

$ 1,692 $ 2,082 -19 % -18 % $ 2,427 -14 % -15 %

Cost of sales

868 989 -12 % 1,121 -12 %

824 1,093 -25 % 1,306 -16 %

48.7% 52.5% -380 bps 53.8% -130 bps

Demand Creation Expense

156 140 11 % 138 1 %

Operating overhead expense

430 485 -11 % 499 -3 %

Total selling and administrative expense

586 625 -6 % 637 -2 %

Other segment items

(2) (6) — (7) —

EARNINGS BEFORE INTEREST AND TAXES $ 240 $ 474 -49 % $ 676 -30 %

1 unchanged sentence

We do not own the Converse trademarks in Japan and accordingly do not earn revenues in Japan.

2025 FORM 10-K 42

FISCAL 2025 COMPARED TO FISCAL 2024

• Converse revenues decreased 15% on a currency-neutral basis primarily due to declines in North America and Western Europe.

Combined unit sales within the wholesale and direct to consumer channels decreased 12%, driven primarily by a decrease in wholesale, while ASP decreased 3%, primarily driven by increased promotional activity in direct to consumer.

• Wholesale revenues decreased 16% on a currency-neutral basis, driven by declines in all geographies.

• Direct to consumer revenues decreased 14% on a currency-neutral basis as declines in North America and Western Europe, driven by reduced traffic, were partially offset by growth in Asia.

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

Unit sales decreased 12%, while lower ASP reduced revenues by approximately 6 percentage points.

Lower ASP per unit primarily reflects higher discounts in direct to consumer.

• Wholesale revenues decreased 20% on a currency-neutral basis, as declines in Western Europe and Asia 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 49% reflecting lower revenues and the following:

• Gross margin contraction of approximately 130 basis points due to unfavorable changes in standard foreign currency exchange rates, lower full-price ASP, net of discounts, higher other costs and lower margin in direct to consumer, partially offset by lower ocean freight rates.

• Selling and administrative expense decrease of 2% due to lower operating overhead expense, primarily as a result of lower wage-related expenses.

2024 FORM 10-K 43

• Gross margin contraction of approximately 380 basis points due to lower ASP and higher warehousing and logistics costs, partially offset by lower product costs.

Lower ASP primarily reflects higher discounts.

• Demand creation expense increased 11% primarily due to higher brand marketing expense.

• Operating overhead expense decreased 11% primarily due to lower wage-related expenses and lower other administrative costs.

(Dollars in millions)

FISCAL 2025 FISCAL 2024 % CHANGE FISCAL 2023 % CHANGE

Revenues $ (42) $ 27 — $ (72) —

$ (97) $ (42) — $ 27 —

Cost of Sales (66) (4) — 562 —

(31) (38) — (535) —

Demand creation expense 12 14 -14 % 34 -59 %

Operating overhead expense 2,162 2,746 -21 % 2,429 13 %

Total selling and administrative expense 2,174 2,760 -21 % 2,463 12 %

Other segment items

(3) (179) — (158) —

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

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.

The Corporate loss before interest and taxes primarily consists of unallocated general and administrative expenses, including expenses associated with centrally managed departments;

$ (2,202) $ (2,619) 16 % $ (2,840) 8 %

Corporate primarily consists of unallocated general and administrative expenses, including expenses associated with centrally managed departments;

depreciation and amortization related to our corporate headquarters;

1 unchanged sentence

and certain foreign currency gains and losses.

In addition to the foreign currency gains and losses recognized in Corporate revenues, foreign currency results in Corporate include gains and losses resulting from the difference between actual foreign currency exchange rates and standard rates used to record non-functional currency denominated product purchases within the NIKE Brand geographic operating segments and Converse;

3 unchanged sentences

FISCAL 2025 COMPARED TO FISCAL 2024

Corporate's loss before interest and taxes decreased $221 million during fiscal 2024, primarily due to the following:

• a favorable change in net foreign currency gains and losses of $588 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;

Corporate's loss before interest and taxes decreased $417 million, primarily due to the following:

• a favorable change of $443 million related to restructuring charges in the prior year, $379 million reported as a component of consolidated Operating overhead expense and $64 million reported as a component of consolidated Gross profit;

• a favorable change of $205 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 $92 million 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 in net foreign currency gains and losses of $88 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 profit.

• a favorable change of $80 million primarily related to lower wage-related expenses, partially offset by higher professional services, reported as a component of consolidated Operating overhead expense;

• a favorable change of $27 million primarily related to the loss recognized in the prior year upon completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, partially offset by the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, as well as net favorable settlements of legal matters in the prior year, reported as a component of consolidated Other (income) expense, net;

• an unfavorable change of $443 million related to restructuring charges, $379 million reported as a component of consolidated Operating overhead expense and $64 million reported as a component of consolidated Cost of sales.

2025 FORM 10-K 43

FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES

9 unchanged sentences

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

2024 FORM 10-K 44

Refer to Note 4 — Fair Value Measurements and Note 12 — Risk Management and Derivatives in the accompanying Notes to the Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end.

26 unchanged sentences

• Other Costs — Non-functional currency denominated costs, such as endorsement contracts, also generate foreign currency risk, though to a lesser extent.

2025 FORM 10-K 44

• Non-Functional Currency Denominated Monetary Assets and Liabilities — Our global subsidiaries have various assets and liabilities, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies.

6 unchanged sentences

Accordingly, changes in fair value of these instruments are recognized in Other (income) expense, net and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged.

2024 FORM 10-K 45

TRANSLATIONAL EXPOSURES

9 unchanged sentences

The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $419 million for the year ended May 31, 2025.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $48 million for the year ended May 31, 2024.

The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a detriment of approximately $97 million for the year ended May 31, 2025.

MANAGING TRANSLATIONAL EXPOSURES

20 unchanged sentences

There were no cash flows from net investment hedge settlements for the years ended May 31, 2025, 2024 and 2023.

2025 FORM 10-K 45

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW ACTIVITY

Cash provided (used) by operations was an inflow of $7,429 million for fiscal 2024, compared to $5,841 million for fiscal 2023.

Net income, adjusted for non-cash items, generated $6,713 million of operating cash inflow for fiscal 2024, compared to $6,354 million for fiscal 2023.

The net change in working capital and other assets and liabilities resulted in an increase to Cash provided (used) by operations of $716 million for fiscal 2024 compared to a decrease of $513 million for fiscal 2023.

For fiscal 2024, the favorable net change in working capital compared to the prior year was primarily impacted by favorable changes to Inventories due to reduced inventory purchases and improved lead times, partially offset by unfavorable changes to Accounts receivable due to the timing of wholesale shipments.

Cash provided (used) by investing activities was an inflow of $894 million for fiscal 2024, compared to an inflow of $564 million for fiscal 2023, primarily driven by the net change in short-term investments (including sales, maturities and purchases).

For fiscal 2024, the net change in short-term investments resulted in a cash inflow of $1,721 million compared to a cash inflow of $1,481 million for fiscal 2023.

Cash provided (used) by financing activities was an outflow of $5,888 million for fiscal 2024 compared to an outflow of $7,447 million for fiscal 2023.

The decreased outflow in fiscal 2024 was driven by lower share repurchases of $4,250 million for fiscal 2024 compared to $5,480 million for fiscal 2023, partially offset by higher dividend payments of $2,169 million for fiscal 2024 compared to $2,012 million for fiscal 2023.

2024 FORM 10-K 46

(Dollars in millions)

FISCAL 2025 FISCAL 2024 $ CHANGE

Cash provided (used by):

Operating activities

$ 3,698 $ 7,429 $ (3,731)

Investing activities

(275) 894 (1,169)

Financing activities

(5,820) (5,888) 68

Effect of exchange rate changes on cash and equivalents

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS

$ (2,396) $ 2,419 $ (4,815)

Cash provided by operating activities decreased $3,731 million.

This was driven by a decrease of $2,228 million in Net income, adjusted for non-cash items, and changes in certain working capital components and other assets and liabilities, which decreased $1,503 million.

The change in working capital was impacted by changes to Inventories, primarily due to reduced inventory purchases in the prior year as well as unfavorable changes in standard foreign currency exchange rates in the current year.

Cash used by investing activities increased $1,169 million, from an inflow in fiscal 2024 to an outflow in fiscal 2025, primarily driven by the net change in short-term investments (including sales, maturities and purchases).

Cash used by financing activities decreased $68 million, primarily driven by lower share repurchases, largely offset by a $1.0 billion bond repayment and slightly higher dividend payments.

In fiscal 2025, we purchased a total of 37.6 million shares of NIKE's Class B Common Stock for $3.0 billion (an average price of $78.50 per share) under the four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022.

As of May 31, 2025, we had repurchased 122.6 million shares at a cost of approximately $12.0 billion (an average price of $98.00 per share) under this program.

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

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

We have moderated, and intend to continue moderating, share repurchases.

The timing and the amount of share repurchases will be dictated by our liquidity, capital needs and operating cash flows.

We continue to expect funding of share repurchases from operating cash flows and excess cash.

CAPITAL RESOURCES

1 unchanged sentence

Securities and Exchange Commission (the "SEC") which permits us to issue an unlimited amount of debt securities from time to time.

The Shelf expires on July 21, 2025.

On March 11, 2022, we entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $2 billion of borrowings, with the option to increase borrowings up to $3 billion in total with lender approval.

The facility matures on March 11, 2027, with options to extend the maturity date up to an additional two years.

Refer to Note 5 — Short-Term Borrowings and Credit Lines for additional information.

The Shelf expires on July 21, 2025, and we plan to file a new shelf registration with the SEC in July 2025.

On March 7, 2025, we entered into a 364-day committed credit facility agreement with a syndicate of banks which provides for up to $1 billion of borrowings, with the option to increase borrowings up to $1.5 billion in total with lender approval.

2 unchanged sentences

Refer to Note 5 — Short-Term Borrowings and Credit Lines for additional information.

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

As it relates to our committed credit facilities entered into on March 11, 2022 and March 8, 2024, if our long-term debt ratings were to decline, the facility fees and interest rates would increase.

On March 7, 2025, we entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $2 billion of borrowings, with the option to increase borrowings up to $3 billion in total with lender approval.

The facility matures on March 7, 2030, with options to extend the maturity date up to an additional two years.

This facility replaces the prior $2 billion five-year credit facility agreement entered into on March 11, 2022, which would have matured on March 11, 2027.

Refer to Note 5 — Short-Term Borrowings and Credit Lines for additional information.

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

As it relates to our committed credit facilities entered into on March 7, 2025, if our long-term debt ratings were to decline, the facility fees and interest rates would increase.

Conversely, if our long-term debt ratings were to improve, the facility fees and interest rates would decrease.

In July 2025, Standard and Poor's Corporation downgraded our debt rating from AA- to A+, and, as a result, our facility fees and interest rates will increase compared to what they were prior to the downgrade.

Refer to Note 5 — Short-Term Borrowings and Credit Lines for additional information.

Changes in our long-term debt ratings would not trigger acceleration of maturity of any then-outstanding borrowings or any future borrowings under the committed credit facilities.

3 unchanged sentences

As of May 31, 2025, we were in full compliance with each of these covenants, and we believe it is unlikely we will fail to meet any of these covenants in the foreseeable future.

2025 FORM 10-K 46

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

8 unchanged sentences

While individual securities have varying durations, as of May 31, 2025, the weighted-average days to maturity of our cash equivalents and short-term investments portfolio was 96 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.

Our material cash requirements as of May 31, 2025, were as follows:

1 unchanged sentence

• Operating Leases — Refer to Note 17 — Leases in the accompanying Notes to the Consolidated Financial Statements for additional information.

2024 FORM 10-K 47

• Endorsement Contracts — As of May 31, 2024, we had endorsement contract obligations of $10.6 billion, with $1.7 billion payable within 12 months, representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.

• Endorsement Contracts — As of May 31, 2025, we had endorsement contract obligations, including associated marketing commitments, of $16.2 billion, with $1.6 billion payable within 12 months, primarily representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.

Actual payments under some contracts may be higher than these amounts as these contracts provide for bonuses to be paid to the endorsers based upon athletic achievements and/or royalties on product sales in future periods.

7 unchanged sentences

• Other Purchase Obligations — As of May 31, 2025, we had $3.1 billion of other purchase obligations, with $1.9 billion payable within the next 12 months.

Other purchase obligations primarily include technology investments, construction, service and marketing commitments, including marketing commitments associated with endorsement contracts, made in the ordinary course of business.

Other purchase obligations primarily include technology investments, construction, service and marketing commitments made in the ordinary course of business.

The amounts represent the minimum payments required by legally binding contracts and agreements that specify all significant terms, and may include open purchase orders for non-product purchases.

As of May 31, 2025, we had approximately $260 million in estimated future income tax obligations payable within 12 months related to expected resolution with the Internal Revenue Service of certain U.S.

federal income tax matters for fiscal years 2017 through 2019 related to transfer pricing adjustments, research and development credits and other items.

As a part of the transition tax related to the Tax Cuts and Jobs Act, as of May 31, 2025, we had $268 million in estimated future cash payments payable within the next 12 months.

These amounts represent the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which are reflected net of foreign tax credits we utilized.

In addition to the above, we have long-term obligations for uncertain tax positions and various post-retirement benefits for which we are not able to reasonably estimate when cash payments will occur.

Refer to Note 7 — Income Taxes and Note 11 — Benefit Plans in the accompanying Notes to the Consolidated Financial Statements for additional information related to uncertain tax positions and post-retirement benefits, respectively.

As a part of the transition tax related to the Tax Cuts and Jobs Act, as of May 31, 2024, we had $483 million in estimated future cash payments, with $215 million payable within the next 12 months.

These amounts represent the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which are reflected net of foreign tax credits we utilized.

Refer to Note 16 — Commitments and Contingencies in the accompanying Notes to the Consolidated Financial Statements for additional information related to our off-balance sheet arrangements, bank guarantees and letters of credit.

2025 FORM 10-K 47

OFF-BALANCE SHEET ARRANGEMENTS

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Based on our historical experience and the estimated probability of future loss, we have determined that the fair value of such indemnification is not material to our financial position or results of operations.

NEW ACCOUNTING PRONOUNCEMENTS

Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Consolidated Financial Statements for recently adopted and issued accounting standards.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Consolidated Financial Statements for recently adopted and issued accounting pronouncements.

CRITICAL ACCOUNTING ESTIMATES

Our previous discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.

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.

Note 1 — Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of our Consolidated Financial Statements.

The preparation of our Consolidated Financial Statements in accordance with U.S.

GAAP 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 below have the greatest potential impact on our Consolidated Financial Statements, so we consider these to be our critical accounting estimates.

Management has reviewed and discussed these critical accounting estimates with the Audit & Finance Committee of the Board of Directors.

2024 FORM 10-K 48

Because of the uncertainty inherent in these matters, actual results could differ from the estimates we use in the preparation of our Consolidated Financial Statements.

Within the context of these critical accounting estimates, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

During fiscal 2025, we have not made any material changes to the accounting methodologies used to develop the estimates discussed below.

For a description of our significant accounting policies and methods used in the preparation of our Consolidated Financial Statements, refer to Note 1 — Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements.

SALES-RELATED RESERVES

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Provisions for post-invoice sales discounts consist of both contractual programs and discretionary discounts that are expected to be granted at a later date.

Estimates of discretionary authorized returns, discounts and claims are based on (1) historical rates, (2) specific identification of outstanding returns not yet received from customers and outstanding discounts and claims and (3) estimated returns, discounts and claims expected but not yet finalized with customers.

Actual returns, discounts and claims in any future period are inherently uncertain and may differ from estimates recorded.

If actual or expected future returns, discounts or claims were significantly different than reserves established, a reduction or increase to net revenues would be recorded in the period in which such determination was made.

For fiscal 2025, any variances between actual and expected sales-related reserves were not material to reported Revenues.

Refer to Note 14 — Revenues in the accompanying Notes to the Consolidated Financial Statements for additional information.

INVENTORY RESERVES

We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand and market conditions.

We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand, market conditions, existing inventory levels, sales trends and historical experience with similar products.

If we estimate the net realizable value of our inventory is less than the cost of the inventory, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value.

This reserve is recorded as a charge to Cost of sales.

If changes in market conditions result in reductions to the estimated net realizable value of our inventory below our previous estimate, we would increase our reserve in the period in which we made such a determination.

Refer to Inventory Valuation within Note 1 — Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements for additional information.

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HEDGE ACCOUNTING FOR DERIVATIVES

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In most cases, this results in gains and losses on hedge derivatives being released from Accumulated other comprehensive income (loss) into Net income sometime after the maturity of the derivative.

One of the criteria for this accounting treatment is that the notional value of these derivative contracts should not be in excess of the designated amount of anticipated transactions.

One of the criteria for this accounting treatment is that the designated notional value of these derivative contracts should not be in excess of the amount of anticipated transactions.

By their very nature, our estimates of anticipated transactions may fluctuate over time and may ultimately vary from actual transactions.

When the designated amount of anticipated or actual transactions decline below hedged levels, or if it is no longer probable a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, we reclassify the cumulative change in fair value of the over-hedged portion of the related hedge contract from Accumulated other comprehensive income (loss) to Other (income) expense, net during the quarter in which the decrease occurs.

When the amount of anticipated or actual transactions decline below designated hedged levels and it is no longer probable the forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, we reclassify the cumulative change in fair value of the over-hedged portion of the related hedge contract from Accumulated other comprehensive income (loss) to Other (income) expense, net during the quarter in which the decrease occurs.

In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction that are outside our control or influence.

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On a quarterly basis, we evaluate the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity.

Changes in our assessment may result in the recognition of a tax benefit or an

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additional charge to the tax provision in the period our assessment changes.

Changes in our assessment may result in the recognition of a tax benefit or an additional charge to the tax provision in the period our assessment changes.

We recognize interest and penalties related to income tax matters in Income tax expense.

10 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-K

Item 7. Management’s Discussion and Analysis