NIKE, Inc. 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW NIKE designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide. We are the largest seller of athletic footwear and apparel in the world. 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. QUARTERLY FINANCIAL HIGHLIGHTS • NIKE, Inc. Revenues were $11.3 billion for the third quarter of fiscal 2026, flat on a reported basis and down 3% on a currency-neutral basis. • NIKE Brand wholesale revenues were $6.5 billion for the third quarter of fiscal 2026 compared to $6.2 billion for the third quarter of fiscal 2025. The increase on a currency-neutral basis was driven by higher revenues in North America and Asia Pacific & Latin America ("APLA"), partially offset by lower revenues in Greater China and Europe, Middle East & Africa ("EMEA"). • NIKE Direct revenues were $4.5 billion for the third quarter of fiscal 2026 compared to $4.7 billion for the third quarter of fiscal 2025, primarily driven by a decrease in traffic. • Gross margin for the third quarter of fiscal 2026 decreased 130 basis points to 40.2% primarily due to higher tariffs in North America. • Inventories as of February 28, 2026, were $7.5 billion, flat compared to May 31, 2025, primarily reflecting an increase in units, offset by product mix. • We returned approximately $609 million to our shareholders in the third quarter of fiscal 2026 through dividends. 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 currency exchange rates and evolving tariff policies. 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. For a discussion of these factors and other risks, refer to Risk Factors in Item 1A of Part 1 within our Annual Report on Form 10-K for the fiscal year ended May 31, 2025 (the "Annual Report"). 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: Accelerating product innovation and reducing the supply of certain footwear products in the marketplace to 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. We are also making investments to elevate the presentation of our brands in physical retail. • Brand Management: Increasing investment in demand creation, including brand marketing and sports marketing, to support key product launches and sports moments. 25 Table of Contents Our reportable operating segments are at different stages of progress and we expect to complete these actions by the end of December 2026. The timing of financial impacts has and will continue to vary by segment. North America has made the most progress against these actions, while Greater China and Converse will take more time. In Greater China, a trend of declining store traffic, elevated promotional activity and higher levels of inventory across the marketplace are negatively impacting revenues and overall profitability, while Converse is in the midst of a strategic reset of the brand and marketplace. We expect negative impacts from Greater China to continue throughout fiscal 2027. While these product, marketplace and brand management actions taken across our portfolio have had, and in the future may have, a negative impact on our Revenues and overall profitability, we believe they will reignite brand momentum and reposition our business to drive long-term shareholder value. We have also been evaluating opportunities to operate more efficiently and profitably through realigning costs across our supply chain and technology to serve an integrated marketplace. For the three and nine months ended February 28, 2026, we recognized pre-tax charges of $230 million and $304 million, respectively, primarily associated with employee severance costs. We continue to evaluate opportunities and may take additional actions which could lead to additional charges in future quarters. For more information, refer to Note 13 — Severance and Other Employee Costs within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. OTHER MATTERS On February 20, 2026, the U.S. Supreme Court ruled that U.S. tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") on goods imported into the U.S. were unauthorized. Total IEEPA tariffs paid as of the date of this report is approximately $1.0 billion. The ruling did not address potential refunds, and therefore the ultimate availability, timing and amount of any potential refunds of these tariffs is highly uncertain. As such, we have determined that potential recovery of any funds is not probable. We will continue to monitor changes to the import and export policies of the U.S. and other countries that could impact our financial position, results of operations and cash flows. USE OF NON-GAAP FINANCIAL MEASURES Throughout this Quarterly Report on Form 10-Q, we discuss non-GAAP financial measures, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). References to these measures should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. Management uses these non-GAAP measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. Earnings Before Interest and Taxes ("EBIT") and EBIT margin: Calculated as Net income before Interest (income) expense, net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income and total NIKE, Inc. EBIT divided by total NIKE, Inc. Revenues, respectively. Total NIKE, Inc. EBIT and our EBIT margin calculations for the three and nine months ended February 28, 2026 and February 28, 2025 are as follows: THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 2026 2025 Net income $ 520 $ 794 $ 2,039 $ 3,008 Add: Income tax expense 130 50 532 559 Add: Interest (income) expense, net (15) (18) (42) (85) EBIT $ 635 $ 826 $ 2,529 $ 3,482 Total NIKE, Inc. Revenues 11,279 11,269 35,426 35,212 Net income margin 4.6 % 7.0 % 5.8 % 8.5 % EBIT margin 5.6 % 7.3 % 7.1 % 9.9 % Currency-neutral revenues: Currency-neutral revenues enhance visibility to underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. 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. 26 Table of Contents COMPARABLE STORE SALES Comparable store sales: This key metric, which excludes NIKE Brand Digital sales, comprises revenues from NIKE-owned in-line and factory stores for which all three of the following requirements have been met: (1) the store has been open at least one year, (2) square footage has not changed by more than 15% within the past year and (3) the store has not been permanently repositioned within the past year. Comparable store sales represents a performance metric that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions. The method of calculating comparable store sales varies across the retail industry. As a result, our calculation of this metric may not be comparable to similarly titled metrics used by other companies. 27 Table of Contents RESULTS OF OPERATIONS THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions, except per share data) 2026 2025 % CHANGE 2026 2025 % CHANGE Revenues $ 11,279 $ 11,269 0 % $ 35,426 $ 35,212 1 % Cost of sales 6,749 6,594 2 % 20,908 19,891 5 % Gross profit 4,530 4,675 -3 % 14,518 15,321 -5 % Gross margin 40.2 % 41.5 % 41.0 % 43.5 % Demand creation expense 1,090 1,088 0 % 3,551 3,436 3 % Operating overhead expense 2,887 2,799 3 % 8,481 8,504 0 % Total selling and administrative expense 3,977 3,887 2 % 12,032 11,940 1 % % of revenues 35.3 % 34.5 % 34.0 % 33.9 % Interest (income) expense, net (15) (18) — (42) (85) — Other (income) expense, net (82) (38) — (43) (101) — Income before income taxes 650 844 -23 % 2,571 3,567 -28 % Income tax expense 130 50 160 % 532 559 -5 % Effective tax rate 20.0 % 5.9 % 20.7 % 15.7 % NET INCOME $ 520 $ 794 -35 % $ 2,039 $ 3,008 -32 % Diluted earnings per common share $ 0.35 $ 0.54 -35 % $ 1.38 $ 2.02 -32 % CONSOLIDATED OPERATING RESULTS REVENUES THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) NIKE, Inc. Revenues: NIKE Brand Revenues by: Footwear $ 7,353 $ 7,208 2 % -1 % $ 22,422 $ 22,325 0 % -1 % Apparel 3,184 3,193 0 % -4 % 10,403 9,963 4 % 2 % Equipment 468 477 -2 % -6 % 1,648 1,624 1 % -1 % Global Brand Divisions (2) 7 12 -42 % -37 % 25 39 -36 % -34 % TOTAL NIKE BRAND REVENUES 11,012 10,890 1 % -2 % 34,498 33,951 2 % 0 % Converse 264 405 -35 % -37 % 930 1,335 -30 % -32 % Corporate (3) 3 (26) — — (2) (74) — — TOTAL NIKE, INC. REVENUES $ 11,279 $ 11,269 0 % -3 % $ 35,426 $ 35,212 1 % -1 % Supplemental NIKE Brand Revenues Details: NIKE Brand Revenues by: Sales to Wholesale Customers $ 6,466 $ 6,155 5 % 1 % $ 20,804 $ 19,485 7 % 5 % Sales through NIKE Direct 4,539 4,723 -4 % -7 % 13,669 14,427 -5 % -7 % Global Brand Divisions (2) 7 12 -42 % -37 % 25 39 -36 % -34 % TOTAL NIKE BRAND REVENUES $ 11,012 $ 10,890 1 % -2 % $ 34,498 $ 33,951 2 % 0 % (1) The percent change excluding currency changes represents a non-GAAP financial measure. For additional information, see "Use of Non-GAAP Financial Measures". (2) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. (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. 28 Table of Contents THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • NIKE, Inc. Revenues for the third quarter of fiscal 2026 were $11.3 billion, flat on a reported basis. On a currency-neutral basis, NIKE, Inc. Revenues decreased 3%, primarily due to lower revenues in EMEA, Greater China and Converse, which reduced NIKE, Inc. Revenues by approximately 2, 1, and 1 percentage points, respectively. Higher revenues in North America increased NIKE, Inc. Revenues by approximately 1 percentage point. • NIKE Brand revenues increased 1% on a reported basis and decreased 2% on a currency-neutral basis. • NIKE Brand footwear revenues decreased 1% on a currency-neutral basis. Unit sales of footwear decreased 2%, while higher average selling price ("ASP") per pair contributed approximately 1 percentage point of footwear revenue growth. Higher ASP per pair was primarily due to product mix and strategic pricing, partially offset by channel mix. • NIKE Brand apparel revenues decreased 4% on a currency-neutral basis. Unit sales of apparel decreased 3%, while lower ASP per unit reduced apparel revenues by approximately 1 percentage point. Lower ASP per unit was primarily due to higher discounts, partially offset by product mix and strategic pricing. • NIKE Brand wholesale revenues were $6.5 billion for the third quarter of fiscal 2026, up 5% on a reported basis and up 1% on a currency-neutral basis. The increase on a currency-neutral basis was driven by higher revenues in North America and APLA, partially offset by lower revenues in Greater China and EMEA. • NIKE Direct revenues were $4.5 billion for the third quarter of fiscal 2026, down 4% on a reported basis and down 7% on a currency-neutral basis, due to declines in NIKE Brand Digital sales of 9% and declines in NIKE store sales of 5%. NIKE Brand Digital sales were $2.3 billion for the third quarter of fiscal 2026 compared to $2.5 billion for the third quarter of fiscal 2025, with declines primarily due to reduced traffic. Comparable store sales decreased 5%. For additional information regarding comparable store sales, including the definition, see "Comparable Store Sales". FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • NIKE, Inc. Revenues for the first nine months of fiscal 2026 were $35.4 billion, up 1% on a reported basis. On a currency-neutral basis, NIKE, Inc. Revenues decreased 1%, primarily due to lower revenues in Greater China and Converse, which reduced NIKE, Inc. Revenues by approximately 2 and 1 percentage points, respectively. Higher revenues in North America increased NIKE, Inc. Revenues by approximately 2 percentage points. • NIKE Brand revenues increased 2% on a reported basis and were flat on a currency-neutral basis. • NIKE Brand footwear revenues decreased 1% on a currency-neutral basis. Unit sales of footwear were flat, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to channel mix and higher discounts, partially offset by product mix and strategic pricing. • NIKE Brand apparel revenues increased 2% on a currency-neutral basis. Unit sales of apparel increased 3%, while lower ASP per unit reduced apparel revenues by approximately 1 percentage point. Lower ASP per unit was primarily due to higher discounts and channel mix, partially offset by product mix. • NIKE Brand wholesale revenues were $20.8 billion for the first nine months of fiscal 2026, up 7% on a reported basis and up 5% on a currency-neutral basis. The increase on a currency-neutral basis was driven by higher revenues in North America and APLA, partially offset by lower revenues in Greater China. • NIKE Direct revenues were $13.7 billion for the first nine months of fiscal 2026, down 5% on a reported basis and down 7% on a currency-neutral basis, due to declines in NIKE Brand Digital sales of 12% and declines in NIKE store sales of 3%. NIKE Brand Digital sales were $6.8 billion for the first nine months of fiscal 2026 compared to $7.6 billion for the first nine months of fiscal 2025, with declines primarily due to reduced traffic. Comparable store sales decreased 3%. 29 Table of Contents GROSS MARGIN THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE 2026 2025 % CHANGE Gross profit $ 4,530 $ 4,675 -3 % $ 14,518 $ 15,321 -5 % Gross margin 40.2 % 41.5 % -130 bps 41.0 % 43.5 % -250 bps THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Consolidated gross margin was 130 basis points lower than the prior year due to: • Higher NIKE Brand product costs (decreasing gross margin approximately 270 basis points), primarily due to higher tariffs in North America; and • Lower gross margin from Converse (decreasing gross margin approximately 30 basis points). This was partially offset by: • Higher NIKE Brand ASP (increasing gross margin approximately 80 basis points), primarily due to strategic pricing and product mix; • Lower other costs (increasing gross margin approximately 60 basis points), primarily due to lower inventory obsolescence reserves; • Lower warehousing and logistics costs (increasing gross margin approximately 20 basis points); and • Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 10 basis points). FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Consolidated gross margin was 250 basis points lower than the prior year due to: • Higher NIKE Brand product costs (decreasing gross margin approximately 240 basis points), primarily due to higher tariffs in North America; • Lower NIKE Brand ASP (decreasing gross margin approximately 80 basis points), primarily due to channel mix and higher discounts, partially offset by strategic pricing; and • Lower gross margin from Converse (decreasing gross margin approximately 30 basis points). This was partially offset by: • Lower warehousing and logistics costs (increasing gross margin approximately 40 basis points), primarily due to channel mix; • Favorable changes in net foreign currency exchange rates, including hedges (increasing gross margin approximately 30 basis points); and • Lower other costs (increasing gross margin approximately 30 basis points), primarily due to lower inventory obsolescence reserves. TOTAL SELLING AND ADMINISTRATIVE EXPENSE THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE 2026 2025 % CHANGE Demand creation expense (1) $ 1,090 $ 1,088 0 % $ 3,551 $ 3,436 3 % Operating overhead expense (2) 2,887 2,799 3 % 8,481 8,504 0 % Total selling and administrative expense $ 3,977 $ 3,887 2 % $ 12,032 $ 11,940 1 % % of revenues 35.3 % 34.5 % 80 bps 34.0 % 33.9 % 10 bps (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 costs, 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. 30 Table of Contents THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Demand creation expense was flat as higher sports marketing expense and unfavorable changes in foreign currency exchange rates were offset by lower brand marketing expense. Changes in foreign currency exchange rates increased Demand creation expense by approximately 3 percentage points. Operating overhead expense increased 3% due to higher wage-related expense, driven by employee severance costs, and unfavorable changes in foreign currency exchange rates, partially offset by lower other administrative costs. Changes in foreign currency exchange rates increased Operating overhead expense by approximately 2 percentage points. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Demand creation expense increased 3% due to higher sports marketing expense and unfavorable changes in foreign currency exchange rates, partially offset by lower brand marketing expense, reflecting higher investment in key sports events in the prior year. Changes in foreign currency exchange rates increased Demand creation expense by approximately 2 percentage points. Operating overhead expense was flat as lower other administrative costs were offset by higher wage-related expense, driven by employee severance costs, and unfavorable changes in foreign currency exchange rates. Changes in foreign currency exchange rates increased Operating overhead expense by approximately 1 percentage point. OTHER (INCOME) EXPENSE, NET THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 2026 2025 Other (income) expense, net $ (82) $ (38) $ (43) $ (101) 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. THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Other (income) expense, net increased from $38 million of other income, net, to $82 million of other income, net, primarily due to settlements of legal matters, partially offset by an unfavorable net change in foreign currency conversion gains and losses, including hedges. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Other (income) expense, net decreased from $101 million of other income, net, to $43 million of other income, net, primarily due to an unfavorable net change in foreign currency conversion gains and losses, including hedges, partially offset by settlements of legal matters. INCOME TAXES THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, 2026 2025 % CHANGE 2026 2025 % CHANGE Effective tax rate 20.0 % 5.9 % 1,410 bps 20.7 % 15.7 % 500 bps THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Our effective tax rate increased from 5.9% to 20.0%, primarily due to a prior year one-time, non-cash deferred tax benefit provided by U.S. tax regulations related to foreign currency gains and losses. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Our effective tax rate increased from 15.7% to 20.7%, primarily due to a prior year one-time, non-cash deferred tax benefit provided by U.S. tax regulations related to foreign currency gains and losses. For additional information, refer to Note 5 — Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. 31 Table of Contents SEGMENT INFORMATION See Note 11 — Segment Information in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for a description of our segments and related information. The breakdown of Revenues is as follows: THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES (1) North America $ 5,026 $ 4,864 3 % 3 % $ 15,679 $ 14,869 5 % 5 % Europe, Middle East & Africa 2,874 2,811 2 % -7 % 9,597 9,257 4 % -2 % Greater China 1,615 1,733 -7 % -10 % 4,550 5,110 -11 % -12 % Asia Pacific & Latin America 1,490 1,470 1 % -2 % 4,647 4,676 -1 % -2 % Global Brand Divisions (2) 7 12 -42 % -37 % 25 39 -36 % -34 % TOTAL NIKE BRAND 11,012 10,890 1 % -2 % 34,498 33,951 2 % 0 % Converse 264 405 -35 % -37 % 930 1,335 -30 % -32 % Corporate (3) 3 (26) — — (2) (74) — — TOTAL NIKE, INC. REVENUES $ 11,279 $ 11,269 0 % -3 % $ 35,426 $ 35,212 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". (2) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. (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. The primary financial measure used to evaluate performance of our individual reportable operating segments is EBIT. For additional information on our segments, refer to Note 11 — Segment Information in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. The breakdown of EBIT is as follows: THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE 2026 2025 % CHANGE North America $ 981 $ 1,103 -11 % $ 3,376 $ 3,690 -9 % Europe, Middle East & Africa 515 480 7 % 1,983 2,103 -6 % Greater China 467 421 11 % 1,035 1,298 -20 % Asia Pacific & Latin America 332 346 -4 % 1,071 1,208 -11 % Global Brand Divisions (1,209) (1,093) -11 % (3,473) (3,453) -1 % TOTAL NIKE BRAND (1) 1,086 1,257 -14 % 3,992 4,846 -18 % Converse (40) 39 -203 % (5) 213 -102 % Corporate (411) (470) 13 % (1,458) (1,577) 8 % TOTAL NIKE, INC. EBIT (1) 635 826 -23 % 2,529 3,482 -27 % Interest (income) expense, net (15) (18) — (42) (85) — Income tax expense 130 50 160 % 532 559 -5 % NET INCOME $ 520 $ 794 -35 % $ 2,039 $ 3,008 -32 % Total NIKE, Inc. Revenues $ 11,279 $ 11,269 0 % $ 35,426 $ 35,212 1 % Net income margin 4.6 % 7.0 % 5.8 % 8.5 % EBIT margin (1) 5.6 % 7.3 % 7.1 % 9.9 % (1) Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin represent non-GAAP financial measures. For additional information, see "Use of Non-GAAP Financial Measures". 32 Table of Contents NORTH AMERICA THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 3,326 $ 3,132 6 % 6 % $ 10,087 $ 9,580 5 % 5 % Apparel 1,480 1,510 -2 % -2 % 4,765 4,534 5 % 5 % Equipment 220 222 -1 % -1 % 827 755 10 % 10 % TOTAL REVENUES $ 5,026 $ 4,864 3 % 3 % $ 15,679 $ 14,869 5 % 5 % Revenues by: Sales to Wholesale Customers $ 2,768 $ 2,499 11 % 11 % $ 9,054 $ 7,840 15 % 15 % Sales through NIKE Direct 2,258 2,365 -5 % -5 % 6,625 7,029 -6 % -6 % TOTAL REVENUES $ 5,026 $ 4,864 3 % 3 % $ 15,679 $ 14,869 5 % 5 % Cost of sales 3,036 2,766 10 % 9,268 8,289 12 % Gross profit 1,990 2,098 -5 % 6,411 6,580 -3 % Gross margin 39.6 % 43.1 % -350 bps 40.9 % 44.3 % -340 bps Demand creation expense 416 401 4 % 1,331 1,235 8 % Operating overhead expense 593 596 -1 % 1,705 1,656 3 % Total selling and administrative expense 1,009 997 1 % 3,036 2,891 5 % Other segment items — (2) — (1) (1) — EARNINGS BEFORE INTEREST AND TAXES $ 981 $ 1,103 -11 % $ 3,376 $ 3,690 -9 % THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • North America revenues increased 3% on a currency-neutral basis. Wholesale revenues increased 11%, primarily driven by the impacts of our marketplace management actions in both the current and prior year and expanded distribution in the current year. NIKE Direct revenues decreased 5% due to declines in digital sales of 7% and declines in store sales of 1%. Comparable store sales decreased 1%. • Footwear revenues increased 6% on a currency-neutral basis. Unit sales of footwear increased 4%, while higher ASP per pair contributed approximately 2 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to product mix and strategic pricing, partially offset by channel 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, partially offset by product mix and strategic pricing. Reported EBIT decreased 11% reflecting higher reported revenues more than offset by: • Gross margin contraction of 350 basis points, primarily due to higher tariffs, partially offset by higher ASP and lower inventory obsolescence reserves. Higher ASP primarily reflects strategic pricing and product mix, partially offset by channel mix. • Demand creation expense increased 4% due to higher sports marketing expense, partially offset by lower brand marketing expense. • Operating overhead expense decreased 1% due to lower other administrative costs, partially offset by higher wage-related expense. 33 Table of Contents FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • North America revenues increased 5% on a currency-neutral basis. Wholesale revenues increased 15%, primarily driven by expanded distribution in the current year and the impacts of our marketplace management actions in both the current and prior year. NIKE Direct revenues decreased 6% due to declines in digital sales of 11% and declines in store sales of 1%. Comparable store sales decreased 1%. • Footwear revenues increased 5% on a currency-neutral basis. Unit sales of footwear increased 8%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to channel mix, partially offset by product mix and strategic pricing. • Apparel revenues increased 5% on a currency-neutral basis. Unit sales of apparel increased 5%, while ASP per unit was flat as channel mix and higher discounts were offset primarily by product mix. Reported EBIT decreased 9% reflecting higher reported revenues more than offset by the following: • Gross margin contraction of 340 basis points, primarily due to higher tariffs and lower ASP, partially offset by lower warehousing and logistics costs due to channel mix and lower inventory obsolescence reserves. Lower ASP primarily reflects channel mix, partially offset by strategic pricing. • Demand creation expense increased 8% due to higher sports marketing expense and higher brand marketing expense. • Operating overhead expense increased 3% due to higher wage-related expense, partially offset by lower other administrative costs. EUROPE, MIDDLE EAST & AFRICA THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 1,789 $ 1,742 3 % -7 % $ 5,822 $ 5,676 3 % -3 % Apparel 926 913 1 % -8 % 3,228 3,042 6 % 0 % Equipment 159 156 2 % -8 % 547 539 1 % -5 % TOTAL REVENUES $ 2,874 $ 2,811 2 % -7 % $ 9,597 $ 9,257 4 % -2 % Revenues by: Sales to Wholesale Customers $ 1,919 $ 1,817 6 % -4 % $ 6,368 $ 6,011 6 % 0 % Sales through NIKE Direct 955 994 -4 % -13 % 3,229 3,246 -1 % -7 % TOTAL REVENUES $ 2,874 $ 2,811 2 % -7 % $ 9,597 $ 9,257 4 % -2 % Cost of sales 1,705 1,696 1 % 5,530 5,179 7 % Gross profit 1,169 1,115 5 % 4,067 4,078 0 % Gross margin 40.7 % 39.7 % 100 bps 42.4 % 44.1 % -170 bps Demand creation expense 296 267 11 % 943 870 8 % Operating overhead expense 360 353 2 % 1,141 1,091 5 % Total selling and administrative expense 656 620 6 % 2,084 1,961 6 % Other segment items (2) 15 — — 14 — EARNINGS BEFORE INTEREST AND TAXES $ 515 $ 480 7 % $ 1,983 $ 2,103 -6 % 34 Table of Contents THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • EMEA revenues decreased 7% on a currency-neutral basis. Wholesale revenues decreased 4%. NIKE Direct revenues decreased 13% due to declines in digital sales of 6% and declines in store sales of 20%. Comparable store sales decreased 19%. • Footwear revenues decreased 7% on a currency-neutral basis. Unit sales of footwear decreased 4%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to higher discounts, partially offset by product mix. • Apparel revenues decreased 8% on a currency-neutral basis. Unit sales of apparel decreased 8%, while ASP per unit was flat as higher discounts were offset primarily by channel mix. Reported EBIT increased 7% reflecting higher reported revenues and the following: • Gross margin expansion of 100 basis points, primarily due to higher other product costs in the prior year, partially offset by higher discounts and unfavorable changes in standard foreign currency exchange rates. • Demand creation expense increased 11%, primarily due to unfavorable changes in foreign currency exchange rates and higher sports marketing expense. • Operating overhead expense increased 2% due to unfavorable changes in foreign currency exchange rates, partially offset by lower other administrative costs. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • EMEA revenues decreased 2% on a currency-neutral basis. Wholesale revenues were flat. NIKE Direct revenues decreased 7% due to declines in digital sales of 6% and declines in store sales of 7%. Comparable store sales decreased 6%. • Footwear revenues decreased 3% on a currency-neutral basis. Unit sales of footwear were flat, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points. Lower ASP per pair was primarily due to higher discounts, partially offset by product mix. • Apparel revenues were flat on a currency-neutral basis. Unit sales of apparel increased 3%, while lower ASP per unit reduced apparel revenues by approximately 3 percentage points. Lower ASP per unit was primarily due to higher discounts. Reported EBIT decreased 6% reflecting higher reported revenues more than offset by: • Gross margin contraction of 170 basis points, primarily due to lower ASP, reflecting higher discounts, and unfavorable changes in standard foreign currency exchange rates, partially offset by lower warehousing and logistics costs. • Demand creation expense increased 8% due to unfavorable changes in foreign currency exchange rates and higher sports marketing expense, partially offset by lower brand marketing expense, reflecting higher investment in key sports events in the prior year. • Operating overhead expense increased 5%, primarily due to unfavorable changes in foreign currency exchange rates, partially offset by lower other administrative costs. 35 Table of Contents GREATER CHINA THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 1,187 $ 1,282 -7 % -10 % $ 3,250 $ 3,731 -13 % -14 % Apparel 397 412 -4 % -7 % 1,201 1,244 -3 % -5 % Equipment 31 39 -21 % -22 % 99 135 -27 % -27 % TOTAL REVENUES $ 1,615 $ 1,733 -7 % -10 % $ 4,550 $ 5,110 -11 % -12 % Revenues by: Sales to Wholesale Customers $ 888 $ 995 -11 % -13 % $ 2,548 $ 2,870 -11 % -12 % Sales through NIKE Direct 727 738 -1 % -5 % 2,002 2,240 -11 % -12 % TOTAL REVENUES $ 1,615 $ 1,733 -7 % -10 % $ 4,550 $ 5,110 -11 % -12 % Cost of sales 839 953 -12 % 2,473 2,765 -11 % Gross profit 776 780 -1 % 2,077 2,345 -11 % Gross margin 48.0 % 45.0 % 300 bps 45.6 % 45.9 % -30 bps Demand creation expense 97 123 -21 % 341 372 -8 % Operating overhead expense 235 235 0 % 725 727 0 % Total selling and administrative expense 332 358 -7 % 1,066 1,099 -3 % Other segment items (23) 1 — (24) (52) — EARNINGS BEFORE INTEREST AND TAXES $ 467 $ 421 11 % $ 1,035 $ 1,298 -20 % THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • Greater China revenues decreased 10% on a currency-neutral basis. Wholesale revenues decreased 13%. NIKE Direct revenues decreased 5% due to declines in digital sales of 21%, partially offset by an increase in store sales of 1%. Comparable store sales decreased 1%. • Footwear revenues decreased 10% on a currency-neutral basis. Unit sales of footwear decreased 10%, while ASP per pair was flat as lower discounts were offset primarily by product mix and channel mix. • Apparel revenues decreased 7% on a currency-neutral basis. Unit sales of apparel decreased 9%, while higher ASP per unit increased apparel revenues by approximately 2 percentage points. Higher ASP per unit was primarily due to product mix and lower discounts. Reported EBIT increased 11% reflecting lower reported revenues more than offset by: • Gross margin expansion of 300 basis points, primarily due to lower inventory obsolescence reserves. • Demand creation expense decreased 21%, primarily due to lower brand marketing expense. • Operating overhead expense was flat as lower other administrative costs were offset primarily by unfavorable changes in foreign currency exchange rates. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • Greater China revenues decreased 12% on a currency-neutral basis. Wholesale revenues decreased 12%. NIKE Direct revenues decreased 12% due to declines in digital sales of 29% and declines in store sales of 3%. Comparable store sales decreased 4%. • Footwear revenues decreased 14% on a currency-neutral basis. Unit sales of footwear decreased 13%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to channel mix and product mix, partially offset by lower discounts. • Apparel revenues decreased 5% on a currency-neutral basis. Unit sales of apparel decreased 7%, while higher ASP per unit contributed approximately 2 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to product mix. 36 Table of Contents Reported EBIT decreased 20% reflecting lower reported revenues and the following: • Gross margin contraction of 30 basis points, primarily due to higher product costs, driven by product mix, partially offset by lower inventory obsolescence reserves. • Demand creation expense decreased 8%, primarily due to lower brand marketing expense. • Operating overhead expense was flat as lower other administrative costs were offset by higher wage-related expense and unfavorable changes in foreign currency exchange rates. ASIA PACIFIC & LATIN AMERICA THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 1,051 $ 1,052 0 % -3 % $ 3,263 $ 3,338 -2 % -3 % Apparel 381 358 6 % 4 % 1,209 1,143 6 % 5 % Equipment 58 60 -3 % -7 % 175 195 -10 % -11 % TOTAL REVENUES $ 1,490 $ 1,470 1 % -2 % $ 4,647 $ 4,676 -1 % -2 % Revenues by: Sales to Wholesale Customers $ 891 $ 844 6 % 3 % $ 2,834 $ 2,764 3 % 2 % Sales through NIKE Direct 599 626 -4 % -8 % 1,813 1,912 -5 % -6 % TOTAL REVENUES $ 1,490 $ 1,470 1 % -2 % $ 4,647 $ 4,676 -1 % -2 % Cost of sales 870 829 5 % 2,672 2,588 3 % Gross profit 620 641 -3 % 1,975 2,088 -5 % Gross margin 41.6 % 43.6 % -200 bps 42.5 % 44.7 % -220 bps Demand creation expense 91 97 -6 % 297 285 4 % Operating overhead expense 200 200 0 % 614 597 3 % Total selling and administrative expense 291 297 -2 % 911 882 3 % Other segment items (3) (2) — (7) (2) — EARNINGS BEFORE INTEREST AND TAXES $ 332 $ 346 -4 % $ 1,071 $ 1,208 -11 % 37 Table of Contents THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • APLA revenues decreased 2% on a currency-neutral basis primarily due to lower revenues in Japan and Korea, partially offset by higher revenues in Pacific. Wholesale revenues increased 3%. NIKE Direct revenues decreased 8% due to declines in digital sales of 12% and declines in store sales of 3%. Comparable store sales decreased 5%. • Footwear revenues decreased 3% on a currency-neutral basis. Unit sales of footwear decreased 3%, while ASP per pair was flat as product mix and strategic pricing were offset by channel mix and higher discounts. • Apparel revenues increased 4% on a currency-neutral basis. Unit sales of apparel increased 4%, while ASP per unit was flat as higher discounts and channel mix were offset by product mix and strategic pricing. Reported EBIT decreased 4% reflecting higher reported revenues more than offset by: • Gross margin contraction of approximately 200 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates. • Demand creation expense decreased 6%, primarily due to lower brand marketing expense, partially offset by unfavorable changes in foreign currency exchange rates. • Operating overhead expense was flat as unfavorable changes in foreign currency exchange rates were offset by lower other administrative costs and lower wage-related expense. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • APLA revenues decreased 2% on a currency-neutral basis primarily due to lower revenues in Southeast Asia & India, Japan and Korea, partially offset by higher revenues in Central & South America and Pacific. Wholesale revenues increased 2%. NIKE Direct revenues decreased 6% due to declines in digital sales of 10% and declines in store sales of 2%. Comparable store sales decreased 5%. • Footwear revenues decreased 3% on a currency-neutral basis. Unit sales of footwear decreased 2%, while lower ASP per pair reduced footwear revenues by approximately 1 percentage point. Lower ASP per pair was primarily due to higher discounts and channel mix. • Apparel revenues increased 5% on a currency-neutral basis. Unit sales of apparel increased 7%, while lower ASP per unit reduced apparel revenues by approximately 2 percentage points. Lower ASP per unit was primarily due to higher discounts and channel mix, partially offset by product mix and strategic pricing. Reported EBIT decreased 11% reflecting lower reported revenues and the following: • Gross margin contraction of approximately 220 basis points, primarily due to unfavorable changes in standard foreign currency exchange rates and lower ASP. • Demand creation expense increased 4%, primarily due to higher sports marketing expense, partially offset by lower brand marketing expense. • Operating overhead expense increased 3%, primarily due to higher wage-related expense and unfavorable changes in foreign currency exchange rates. GLOBAL BRAND DIVISIONS THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE 2026 2025 % CHANGE Revenues $ 7 $ 12 -42 % $ 25 $ 39 -36 % Cost of sales 160 148 8 % 480 448 7 % Gross profit (loss) (153) (136) -13 % (455) (409) -11 % Demand creation expense 170 158 8 % 558 547 2 % Operating overhead expense 886 802 10 % 2,461 2,499 -2 % Total selling and administrative expense 1,056 960 10 % 3,019 3,046 -1 % Other segment items — (3) — (1) (2) — EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (1,209) $ (1,093) -11 % $ (3,473) $ (3,453) -1 % 38 Table of Contents 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. THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Global Brand Divisions' loss before interest and taxes increased 11%, primarily due to higher Operating overhead expense. Operating overhead expense increased 10%, primarily due to higher wage-related expense, driven by employee severance costs, partially offset by lower other administrative costs. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Global Brand Divisions' loss before interest and taxes increased 1%, primarily due to higher Cost of sales, partially offset by lower Operating overhead expense. Cost of sales increased 7% primarily due to higher wage-related expense. Operating overhead expense decreased 2%, primarily due to lower other administrative costs, partially offset by higher wage-related expense, driven by employee severance costs. CONVERSE THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2026 2025 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES Revenues by: Footwear $ 231 $ 349 -34 % -37 % $ 805 $ 1,149 -30 % -32 % Apparel 12 22 -45 % -45 % 39 65 -40 % -40 % Equipment 4 7 -43 % -41 % 17 25 -32 % -32 % Other (1) 17 27 -37 % -38 % 69 96 -28 % -28 % TOTAL REVENUES $ 264 $ 405 -35 % -37 % $ 930 $ 1,335 -30 % -32 % Revenues by: Sales to Wholesale Customers $ 142 $ 208 -32 % -35 % $ 480 $ 695 -31 % -33 % Sales through Direct to Consumer 105 170 -38 % -41 % 381 544 -30 % -31 % Other (1) 17 27 -37 % -38 % 69 96 -28 % -27 % TOTAL REVENUES $ 264 $ 405 -35 % -37 % $ 930 $ 1,335 -30 % -32 % Cost of sales 167 217 -23 % 536 672 -20 % Gross profit 97 188 -48 % 394 663 -41 % Gross margin 36.7 % 46.4 % -970 bps 42.4 % 49.7 % -730 bps Demand creation expense 17 40 -58 % 74 118 -37 % Operating overhead expense 120 108 11 % 326 332 -2 % Total selling and administrative expense 137 148 -7 % 400 450 -11 % Other segment items — 1 — (1) — — EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (40) $ 39 -203 % $ (5) $ 213 -102 % (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. THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 • Converse revenues decreased 37% on a currency-neutral basis driven by declines in all territories. Unit sales decreased 37%, while ASP was flat. • Wholesale revenues decreased 35% on a currency-neutral basis, driven by declines in all territories. • Direct to consumer revenues decreased 41% on a currency-neutral basis, reflecting reduced traffic in all territories. 39 Reported EBIT decreased 203% reflecting lower reported revenues and the following: • Gross margin contraction of approximately 970 basis points, primarily due to the brand and marketplace reset costs, including employee severance costs and higher inventory obsolescence reserves. • Demand creation expense decreased 58%, primarily due to lower brand marketing expense. • Operating overhead expense increased 11%, primarily due to higher wage-related expense, driven by employee severance costs, partially offset by lower other administrative costs. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 • Converse revenues decreased 32% on a currency-neutral basis driven by declines in all territories. Unit sales decreased 28%, while lower ASP reduced revenues by approximately 4 percentage points. Lower ASP per unit was primarily due to higher discounts and product mix. • Wholesale revenues decreased 33% on a currency-neutral basis, driven by declines in all territories. • Direct to consumer revenues decreased 31% on a currency-neutral basis, reflecting reduced traffic in all territories. Reported EBIT decreased 102% reflecting lower reported revenues and the following: • Gross margin contraction of approximately 730 basis points, primarily due to lower ASP, as well as the brand and marketplace reset costs, including employee severance costs and higher inventory obsolescence reserves. • Demand creation expense decreased 37%, primarily due to lower brand marketing expense. • Operating overhead expense decreased 2%, primarily due to lower other administrative costs, partially offset by higher wage-related expense, driven by employee severance costs. CORPORATE THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 % CHANGE 2026 2025 % CHANGE Revenues $ 3 $ (26) — $ (2) $ (74) — Cost of sales (28) (15) — (51) (50) — Gross profit (loss) 31 (11) — 49 (24) — Demand creation expense 3 2 50 % 7 9 -22 % Operating overhead expense 493 505 -2 % 1,509 1,602 -6 % Total selling and administrative expense 496 507 -2 % 1,516 1,611 -6 % Other segment items (54) (48) — (9) (58) — EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ (411) $ (470) 13 % $ (1,458) $ (1,577) 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; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses. 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. In addition to the foreign currency gains and losses recognized within 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; related foreign currency hedge results; conversion gains and losses arising from remeasurement of monetary assets and liabilities in non-functional currencies; and certain other foreign currency derivative instruments. 40 Table of Contents THIRD QUARTER OF FISCAL 2026 COMPARED TO THIRD QUARTER OF FISCAL 2025 Corporate's loss before interest and taxes decreased $59 million, primarily due to the following: • a favorable change in net foreign currency gains and losses of $57 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 $12 million in Operating overhead expense, primarily related to lower other administrative costs, partially offset by higher wage-related expense; and • a favorable change of $5 million primarily related to settlements of legal matters, mostly offset by 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. FIRST NINE MONTHS OF FISCAL 2026 COMPARED TO FIRST NINE MONTHS OF FISCAL 2025 Corporate's loss before interest and taxes decreased $119 million, primarily due to the following: • a favorable change in net foreign currency gains and losses of $94 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 $93 million in Operating overhead expense, primarily related to lower other administrative costs; and • an unfavorable change of $50 million primarily related to remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, partially offset by settlements of legal matters, reported as a component of consolidated Other (income) expense, net. 41 Table of Contents FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES OVERVIEW As a global company with significant operations outside the United States, in the normal course of business we are exposed to risk arising from changes in currency exchange rates. Our primary foreign currency exposures arise from the recording of transactions denominated in non-functional currencies and the translation of foreign currency denominated results of operations, financial position and cash flows into U.S. Dollars. Our foreign exchange risk management program is intended to lessen both the positive and negative effects of currency fluctuations on our consolidated results of operations, financial position and cash flows. We manage global foreign exchange risk centrally on a portfolio basis to address those risks material to NIKE, Inc. Our hedging policy is designed to partially or entirely offset the impact of exchange rate changes on the underlying net exposures being hedged. Where exposures are hedged, our program has the effect of delaying the impact of exchange rate movements on our Unaudited Condensed Consolidated Financial Statements; the length of the delay is dependent upon hedge horizons. We do not hold or issue derivative instruments for trading or speculative purposes. As of and for the three and nine months ended February 28, 2026, there have been no material changes to our hedging program or strategy from what was disclosed within our Annual Report. Refer to Note 3 — Fair Value Measurements and Note 8 — 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. For additional information about our Foreign Currency Exposures and Hedging Practices, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report. TRANSACTIONAL EXPOSURES We conduct business in various currencies and have transactions which subject us to foreign currency risk. Our most significant transactional foreign currency exposures are: • Product Costs — Product purchases denominated in currencies other than the functional currency of the transacting entity and factory input costs from the foreign currency adjustments program with certain factories. • Non-Functional Currency Denominated External Sales — A portion of our NIKE Brand and Converse revenues associated with European operations are earned in currencies other than the Euro (e.g., the British Pound) but are recognized at a subsidiary that uses the Euro as its functional currency. These sales generate a foreign currency exposure. • Other Costs — Non-functional currency denominated costs, such as endorsement contracts, also generate foreign currency risk, though to a lesser extent. • Non-Functional Currency Denominated Monetary Assets and Liabilities — Our global subsidiaries have various monetary assets and liabilities, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies. These balance sheet items are subject to remeasurement which may create fluctuations in Other (income) expense, net within our Unaudited Condensed Consolidated Statements of Income. MANAGING TRANSACTIONAL EXPOSURES Transactional exposures are managed on a portfolio basis within our foreign currency risk management program. We manage these exposures by taking advantage of natural offsets and currency correlations that exist within the portfolio and may also elect to use currency forward and option contracts to hedge the remaining effect of exchange rate fluctuations on probable forecasted future cash flows, including certain product cost exposures, non-functional currency denominated external sales and other costs described above. Generally, these are accounted for as cash flow hedges. Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement are not formally designated as hedging instruments. Accordingly, changes in fair value of these instruments are recognized within Other (income) expense, net within our Unaudited Condensed Consolidated Statements of Income and are intended to offset the foreign currency impact of the remeasurement of the related non-functional currency denominated asset or liability being hedged. 42 Table of Contents TRANSLATIONAL EXPOSURES Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar. Fluctuations in currency exchange rates create volatility in our reported results as we are required to translate the balance sheets, operational results and cash flows of these subsidiaries into U.S. Dollars for consolidated reporting. The translation of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S. 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 benefit of approximately $399 million and $735 million for the three and nine months ended February 28, 2026, respectively. The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a benefit of approximately $62 million and $143 million for the three and nine months ended February 28, 2026, respectively. MANAGING TRANSLATIONAL EXPOSURES To minimize the impact of translating foreign currency denominated revenues and expenses into U.S. Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S. Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S. GAAP. We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments and to mitigate exposure to forecasted future cash flows of certain intercompany transactions. The combination of these foreign currency exposures and the related hedging instruments has the effect of partially offsetting the year-over-year foreign currency translation impact on net earnings. These hedges are generally 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 $29 million and $12 million on our Income before income taxes for the three and nine months ended February 28, 2026, respectively. 43 Table of Contents LIQUIDITY AND CAPITAL RESOURCES CASH FLOW ACTIVITY NINE MONTHS ENDED FEBRUARY 28, (Dollars in millions) 2026 2025 Cash provided (used by): Operations $ 1,231 $ 3,235 Investing activities (276) (289) Financing activities (1,778) (4,176) Effect of exchange rate changes on cash and equivalents 19 (29) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS $ (804) $ (1,259) OPERATIONS: For the nine months ended February 28, 2026, cash provided by operations was $1,231 million. This was driven by Net income of $2,039 million, adjusted for non-cash items of $1,018 million, and a net change in certain working capital components and other assets and liabilities that decreased cash provided by operations by $1,826 million. The net change in certain working capital components and other assets and liabilities was primarily driven by an increase in Accounts receivable, a decrease in Accounts payable and a decrease in Income taxes payable. The increase in Accounts receivable was primarily due to higher wholesale revenues and the timing of wholesale shipments. The decrease in Accounts payable was primarily due to lower other administrative costs and the timing of payments. The decrease in Income taxes payable was primarily due to U.S. federal income tax payments. For the nine months ended February 28, 2025, cash provided by operations was $3,235 million. This was driven by Net income of $3,008 million, adjusted for non-cash items of $875 million, and a net change in certain working capital components and other assets and liabilities that decreased cash provided by operations by $648 million. The net change in certain working capital components and other assets and liabilities was primarily driven by an increase in Accounts receivable and an increase in Prepaid expenses and other current assets. The increase in Accounts receivable was primarily due to the timing of wholesale shipments and the increase in Prepaid expenses and other current assets was primarily due to payments related to endorsement contracts. INVESTING ACTIVITIES: For the nine months ended February 28, 2026, cash used by investing activities was $276 million, primarily driven by a net change in short-term investments (including purchases, sales and maturities) and increased additions to Property, plant and equipment. For the nine months ended February 28, 2025, cash used by investing activities was $289 million, primarily driven by a net change in short-term investments (including purchases, sales and maturities). FINANCING ACTIVITIES: For the nine months ended February 28, 2026, cash used by financing activities was $1,778 million, primarily driven by dividend payments. For the nine months ended February 28, 2025, cash used by financing activities was $4,176 million, primarily driven by share repurchases and dividend payments. During the first nine months of fiscal 2026, we purchased a total of 1.8 million shares of NIKE's Class B Common Stock for $122.4 million (an average price of $67.63 per share) under the four-year, $18 billion share repurchase program approved by the Board of Directors in June 2022. As of February 28, 2026, we had repurchased 124.4 million shares at a cost of approximately $12.1 billion (an average price of $97.57 per share) under this $18 billion share repurchase program. No shares were repurchased during the quarter ended February 28, 2026. We paused repurchases under this program during the first quarter of fiscal 2026. The existing program remains authorized by the Board of Directors and we may resume share repurchases in the future at any time, depending upon market conditions, our liquidity and capital needs and other factors. We continue to expect funding of any future share repurchases to come from operating cash flows and excess cash. 44 Table of Contents CAPITAL RESOURCES On July 17, 2025, we filed a shelf registration statement (the "Shelf") with the U.S. Securities and Exchange Commission (the "SEC") which permits us to issue an unlimited amount of securities from time to time. The Shelf expires on July 17, 2028. As of February 28, 2026, our committed credit facilities were unchanged from the information previously reported within our Annual Report. We currently have long-term debt ratings of A+ and A2 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. In November 2025, Moody's Investor Services downgraded our debt rating from A1 to A2. Despite the downgrade, our facility fees and interest rates remain unchanged. As of February 28, 2026, 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 February 28, 2026 and May 31, 2025, no amounts were outstanding under our committed credit facilities. On March 6, 2026, subsequent to the end of the third quarter of fiscal 2026, 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 an option to increase borrowings up to $1.5 billion in total with lender approval. The facility matures on March 5, 2027, with an option to extend the maturity date an additional 364 days. This facility replaces the prior $1 billion 364-day credit facility agreement entered into on March 7, 2025, which matured on March 6, 2026. Refer to Note 4 — Short-Term Borrowings and Credit Lines within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for more information. Liquidity is also provided by our $3 billion commercial paper program. As of and for the three months ended February 28, 2026, 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. To date, in fiscal 2026, we have not experienced difficulty accessing the capital or credit markets; 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 February 28, 2026, we had Cash and equivalents and Short-term investments totaling $8.1 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. Our fixed-income investments are exposed to both credit and interest rate risk. All of our investments are investment grade to minimize our credit risk. While individual securities have varying durations, as of February 28, 2026, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 119 days. We believe that existing Cash and equivalents, Short-term investments and cash provided by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs for the next twelve months and beyond. There have been no significant changes to the material cash requirements previously reported. CONTRACTUAL OBLIGATIONS & OFF-BALANCE SHEET ARRANGEMENTS As of February 28, 2026, 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. Refer to Note 12 — Commitments and Contingencies in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional information related to our bank guarantees and letters of credit. 45 Table of Contents RECENT ACCOUNTING PRONOUNCEMENTS Refer to Note 1 — Summary of Significant Accounting Policies within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for recently adopted and issued accounting standards. CRITICAL ACCOUNTING ESTIMATES The preparation of our Unaudited Condensed 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 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 Unaudited Condensed Consolidated Financial Statements, so we consider these to be our critical accounting estimates. Because of the uncertainty inherent in these matters, actual results could differ from these estimates. 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. 46 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes from the information previously reported under Part II, Item 7A within our Annual Report on Form 10-K for the fiscal year ended May 31, 2025.