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Item 1. Financial Statements

2026-10-02 compared with 2026-04-01 · 79 added, 298 removed, 425 unchanged (47% of the section changed)

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28,

THREE MONTHS ENDED AUGUST 31,

(In millions, except per share data)

2026 2025 2026 2025

Revenues $ 11,213 $ 11,720

8 unchanged sentences

Income before income taxes

650 844 2,571 3,567

Income tax expense

130 50 532 559

$ 520 $ 794 $ 2,039 $ 3,008

Earnings per common share:

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28,

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions)

2026 2025 2026 2025

Net income $ 712 $ 727

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

FEBRUARY 28, MAY 31,

AUGUST 31, MAY 31,

(In millions)

15 unchanged sentences

Current portion of long-term debt $ 2,000 $ 2,000

Notes payable — 5

Accounts payable 3,420 3,600

20 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED FEBRUARY 28,

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions)

11 unchanged sentences

(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets

( 10 ) ( 165 )

Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities ( 1,219 ) 93

5 unchanged sentences

Additions to property, plant and equipment ( 199 ) ( 207 )

Other investing activities ( 63 ) 8

Cash provided (used) by investing activities ( 192 ) ( 59 )

Cash provided (used) by financing activities:

Increase (decrease) in notes payable, net

Proceeds from exercise of stock options and other stock issuances — 127

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SHARES AMOUNT SHARES AMOUNT

Balance at November 30, 2025 289 $ — 1,191 $ 3 $ 14,705 $ ( 104 ) $ ( 519 ) $ 14,085

Stock options exercised — — 16 16

Conversion to Class B Common Stock ( 8 ) — 8 — —

Dividends on common stock ($ 0.41 per share)

( 611 ) ( 611 )

Issuance of shares to employees, net of shares withheld for employee taxes — — ( 11 ) ( 11 )

Stock-based compensation 194 194

Net income 520 520

Other comprehensive income (loss) ( 103 ) ( 103 )

Balance at February 28, 2026 281 $ — 1,199 $ 3 $ 14,904 $ ( 207 ) $ ( 610 ) $ 14,090

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

CLASS A CLASS B

(In millions, except per share data)

SHARES AMOUNT SHARES AMOUNT

Balance at November 30, 2024 298 $ — 1,184 $ 3 $ 13,778 $ 202 $ 54 $ 14,037

Stock options exercised 1 — 55 55

Repurchase of Class B Common Stock ( 6 ) — ( 60 ) ( 439 ) ( 499 )

Dividends on common stock ($ 0.40 per share)

( 594 ) ( 594 )

Issuance of shares to employees, net of shares withheld for employee taxes — — ( 26 ) 10 ( 16 )

Stock-based compensation 169 169

Net income 794 794

Other comprehensive income (loss) 61 61

Balance at February 28, 2025 298 $ — 1,179 $ 3 $ 13,916 $ 263 $ ( 175 ) $ 14,007

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

CLASS A CLASS B

(In millions, except per share data)

SHARES AMOUNT SHARES AMOUNT

Balance at May 31, 2026 281 $ — 1,202 $ 3 $ 15,158 $ ( 141 ) $ ( 155 ) $ 14,865

Stock options exercised 3 — 155 155

Conversion to Class B Common Stock ( 9 ) — 9 — —

Repurchase of Class B Common Stock ( 2 ) — ( 17 ) ( 106 ) ( 123 )

Dividends on common stock ($ 0.41 per share) and preferred stock ($ 0.10 per share)

4 unchanged sentences

Other comprehensive income (loss) 102 102

Balance at February 28, 2026 281 $ — 1,199 $ 3 $ 14,904 $ ( 207 ) $ ( 610 ) $ 14,090

Balance at August 31, 2026 281 $ — 1,202 $ 3 $ 15,312 $ ( 39 ) $ ( 56 ) $ 15,220

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

4 unchanged sentences

Stock options exercised 3 — 126 126

Conversion to Class B Common Stock ( 1 ) — 1 — —

Repurchase of Class B Common Stock ( 2 ) — ( 17 ) ( 106 ) ( 123 )

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Other comprehensive income (loss) ( 50 ) ( 50 )

Balance at February 28, 2025 298 $ — 1,179 $ 3 $ 13,916 $ 263 $ ( 175 ) $ 14,007

Balance at August 31, 2025 289 $ — 1,188 $ 3 $ 14,473 $ ( 308 ) $ ( 700 ) $ 13,468

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.

3 unchanged sentences

NOTE 3 Fair Value Measurements

NOTE 4 Short-Term Borrowings and Credit Lines

NOTE 4 Income Taxes

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NOTE 13 Supplier Finance Programs

NOTE 14 Subsequent Events

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The interim financial information and notes thereto should be read in conjunction with the Company's latest Annual Report on Form 10-K for the fiscal year ended May 31, 2026 (the "Annual Report").

The results of operations for the three and nine months ended February 28, 2026, are not necessarily indicative of results for the entire fiscal year.

The results of operations for the three months ended August 31, 2026, are not necessarily indicative of results for the entire fiscal year.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the current period presentation.

The impacts of these reclassifications were not material.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company's annual periods beginning June 1, 2025.

The Company will adopt the ASU on a prospective basis in the Annual Report on Form 10-K for the fiscal year ending May 31, 2026.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement.

The new disclosure requirements are effective for the Company's annual periods beginning June 1, 2027, and interim periods beginning June 1, 2028, with early adoption permitted, and may be applied either prospectively or retrospectively.

The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements, which includes amendments to more closely align hedge accounting with the economics of an entity’s risk management activities.

The amendments are effective for the Company’s annual periods beginning June 1, 2027 and interim periods within those fiscal years, with early adoption permitted, and should be applied prospectively.

The Company is currently evaluating the ASU to determine its impact on the Company’s financial statements and related disclosures.

NOTE 2 — ACCRUED LIABILITIES

Accrued liabilities included the following:

FEBRUARY 28, MAY 31,

AUGUST 31, MAY 31,

(Dollars in millions)

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The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivatives, equity securities and available-for-sale debt securities.

The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of February 28, 2026 and May 31, 2025, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

FEBRUARY 28, 2026

The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of August 31, 2026 and May 31, 2026, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

AUGUST 31, 2026

(Dollars in millions)

5 unchanged sentences

Time deposits 351 351 —

Agency securities 20 2 18

Total Level 2 6,045 5,332 713

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Time deposits 228 228 —

Agency securities 10 1 9

Total Level 2 6,539 5,842 697

TOTAL $ 9,027 $ 7,563 $ 1,464

As of February 28, 2026, the Company held $ 485 million of available-for-sale debt securities with maturity dates within one year and $ 912 million with maturity dates greater than one year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets.

As of August 31, 2026, the Company held $ 599 million of available-for-sale debt securities with maturity dates within one year and $ 866 million with maturity dates greater than one year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets.

The fair value of the Company's available-for-sale debt securities approximates their amortized cost.

Included in Interest (income) expense, net was interest income related to the Company's investment portfolio of $ 65 million and $ 97 million for the three months ended February 28, 2026 and 2025, respectively, and $ 210 million and $ 314 million for the nine months ended February 28, 2026 and 2025, respectively.

The following tables present information about the Company's derivative assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

FEBRUARY 28, 2026

DERIVATIVE ASSETS DERIVATIVE LIABILITIES

(Dollars in millions)

ASSETS AT FAIR VALUE OTHER CURRENT ASSETS OTHER LONG-TERM ASSETS LIABILITIES AT FAIR VALUE ACCRUED LIABILITIES OTHER LONG-TERM LIABILITIES

Foreign exchange forwards and options (1)

$ 165 $ 140 $ 25 $ 474 $ 376 $ 98

Interest rate swaps (1)

85 — 85 — — —

TOTAL $ 250 $ 140 $ 110 $ 474 $ 376 $ 98

(1) If the foreign exchange and interest rate swap derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 225 million as of February 28, 2026.

As of that date, the Company received $ 18 million from various counterparties on the derivative asset balance and posted $ 189 million of cash collateral to counterparties on the derivative liability balance.

DERIVATIVE ASSETS DERIVATIVE LIABILITIES

(Dollars in millions)

ASSETS AT FAIR VALUE OTHER CURRENT ASSETS OTHER LONG-TERM ASSETS LIABILITIES AT FAIR VALUE ACCRUED LIABILITIES OTHER LONG-TERM LIABILITIES

Foreign exchange forwards and options (1)

$ 107 $ 85 $ 22 $ 368 $ 226 $ 142

Interest rate swaps (1)

24 — 24 3 — 3

TOTAL $ 131 $ 85 $ 46 $ 371 $ 226 $ 145

(1) If the foreign exchange and interest rate swap derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 131 million as of May 31, 2025.

As of that date, the Company posted $ 166 million of cash collateral to various counterparties on the derivative liability balance and no amount of collateral was received from counterparties on the derivative asset balance.

For additional information related to the Company's derivative financial instruments and credit risk, refer to Note 8 — Risk Management and Derivatives.

Included in Interest (income) expense, net was interest income related to the Company's investment portfolio of $ 71 million and $ 83 million for the three months ended August 31, 2026 and 2025, respectively.

For information related to the Company's derivative financial instruments, refer to Note 7 — Risk Management and Derivatives.

The carrying amounts of other current financial assets and other current financial liabilities approximate fair value.

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The fair value of long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2).

The fair value of the Company's Long-term debt, excluding interest rate swap fair value adjustments, was approximately $ 6,961 million at February 28, 2026 and $ 6,673 million at May 31, 2025.

NOTE 4 — SHORT-TERM BORROWINGS AND CREDIT LINES

As of February 28, 2026 and May 31, 2025, the Company had no borrowings outstanding under its $ 3 billion commercial paper program.

On March 6, 2026, subsequent to the end of the third quarter of fiscal 2026, the Company 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.

Based on the Company's current long-term senior unsecured debt ratings of A+ and A2 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term Secured Overnight Financing Rate for the applicable interest period plus 0.625 %.

The facility fee is 0.03 % of the total undrawn commitment.

As of April 1, 2026, no amounts were outstanding under this committed credit facility.

The fair value of the Company's Long-term debt, excluding interest rate swap fair value adjustments, was approximately $ 6.7 billion at August 31, 2026 and $ 6.8 billion at May 31, 2026.

NOTE 4 — INCOME TAXES

The effective tax rate was 20.7 % and 15.7 % for the nine months ended February 28, 2026 and 2025, respectively.

The increase in the Company’s effective tax rate was primarily due to a one-time, non-cash deferred tax benefit recognized in the third quarter of fiscal year 2025 provided by finalized U.S.

tax regulations.

On December 10, 2024, the U.S.

Department of Treasury published final regulations related to Internal Revenue Code Section 987 foreign currency gains and losses derived from translation of the operations, assets and liabilities of non-U.S.

qualified business units.

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

During the third quarter of fiscal year 2025, the Company recognized a non-cash deferred income tax benefit of $ 133 million related to pre-transition foreign currency losses expected to reduce taxable income in future periods.

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 were effective for NIKE beginning June 1, 2025.

These tax law changes did not have a material impact on the Company's Unaudited Condensed Consolidated Financial Statements for the nine months ended February 28, 2026 and are not expected to have a material impact for the remainder of fiscal year 2026.

As of February 28, 2026, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 969 million, $ 753 million of which would affect the Company's effective tax rate if recognized in future periods.

The effective tax rate was 22.7 % and 21.1 % for the three months ended August 31, 2026 and 2025, respectively.

The increase in the Company's effective tax rate for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 was primarily due to foreign tax audit settlements recognized in the first quarter of fiscal 2027.

As of August 31, 2026, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 931 million, of which $ 745 million would affect the Company's effective tax rate if recognized in future periods.

The majority of total gross unrecognized tax benefits are long-term in nature and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.

As of May 31, 2026, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 953 million.

As of February 28, 2026 and May 31, 2025, accrued interest and penalties related to uncertain tax positions were $ 433 million and $ 376 million, respectively, (excluding federal benefit) and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.

As of August 31, 2026 and May 31, 2026, accrued interest and penalties related to uncertain tax positions, excluding federal benefit, were $ 402 million and $ 438 million, respectively, and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.

The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions.

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The Company has closed all U.S.

federal income tax matters through fiscal year 2016, with the exception of certain transfer pricing adjustments.

federal income tax matters through fiscal 2016, with the exception of certain transfer pricing adjustments.

In certain major foreign jurisdictions, tax years after 2015 remain subject to examination.

Although the timing of resolution of audits is not certain, the Company evaluates all domestic and foreign audit issues in the aggregate, along with the expiration of applicable statutes of limitations, and estimates that it is reasonably possible the total gross unrecognized tax benefits could decrease by up to $ 234 million within the next 12 months primarily as a result of the expected resolution with the IRS 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.

Although the timing and outcome of resolution of the U.S.

federal income tax audit for fiscal years 2017 through 2019 are uncertain, the Company estimates total gross unrecognized tax benefits could decrease by up to $ 184 million as a result of the expected resolution with the IRS of certain previously agreed U.S.

federal income tax matters related to transfer pricing adjustments, research and development credits and other items.

In January 2019, the European Commission opened a formal investigation to examine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company.

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The Stock Incentive Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights and stock awards, including restricted stock and restricted stock units.

Restricted stock units include both time-vesting restricted stock units as well as performance-based restricted stock units ("PSUs").

Restricted stock units include both time-vesting restricted stock units as well as performance-based restricted stock units.

In addition to the Stock Incentive Plan, the Company gives employees the right to purchase shares at a discount from the market price under employee stock purchase plans ("ESPPs").

The following table summarizes the Company's total stock-based compensation expense recognized within Cost of sales or Operating overhead expense, as applicable:

THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28,

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions)

2026 2025 2026 2025

Stock options $ 59 $ 76

$ 68 $ 69 $ 215 $ 222

ESPPs 19 17 45 53

Restricted stock and restricted stock units

107 83 295 269

TOTAL STOCK-BASED COMPENSATION EXPENSE $ 158 $ 185

(1) Expense for stock options includes the expense associated with stock appreciation rights.

STOCK OPTIONS

As of February 28, 2026, the Company had $ 405 million of unrecognized compensation costs related to stock options, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.5 years.

As of August 31, 2026, the Company had $ 263 million of unrecognized compensation costs related to stock options, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.3 years.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

As of February 28, 2026, the Company had $ 753 million of unrecognized compensation costs related to restricted stock and restricted stock units, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.6 years.

As of August 31, 2026, the Company had $ 549 million of unrecognized compensation costs related to restricted stock and restricted stock units, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.3 years.

NOTE 6 — EARNINGS PER SHARE

The following is a reconciliation from basic earnings per common share to diluted earnings per common share.

The computations of diluted earnings per common share exclude restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional 83.3 million and 77.1 million shares of common stock outstanding for the three months ended February 28, 2026 and 2025, respectively, and 83.3 million and 75.3 million shares of common stock outstanding for the nine months ended February 28, 2026 and 2025, respectively, because the awards were assumed to be anti-dilutive.

THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28,

The computations of diluted earnings per common share exclude restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional 84.0 million and 68.3 million shares of common stock outstanding for the three months ended August 31, 2026 and 2025, respectively, because the awards were assumed to be anti-dilutive.

THREE MONTHS ENDED AUGUST 31,

(In millions, except per share data)

2026 2025 2026 2025

Net income available to common stockholders $ 712 $ 727

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The Company is exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business.

As of and for the three and nine months ended February 28, 2026, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report.

The majority of derivatives outstanding as of February 28, 2026, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.

Dollar, Chinese Yuan/U.S.

Dollar, British Pound/Euro and Japanese Yen/U.S.

The majority of derivatives outstanding as of August 31, 2026, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.

Dollar and Chinese Yuan/U.S.

Dollar currency pairs.

All derivatives are recognized on the Unaudited Condensed Consolidated Balance Sheets at fair value and classified based on the instrument's maturity date.

The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets:

The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets, which are classified within Level 2 of the fair value hierarchy:

DERIVATIVE ASSETS

BALANCE SHEET LOCATION FEBRUARY 28, MAY 31,

BALANCE SHEET LOCATION AUGUST 31, MAY 31,

(Dollars in millions)

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DERIVATIVE LIABILITIES

BALANCE SHEET LOCATION FEBRUARY 28, MAY 31,

BALANCE SHEET LOCATION AUGUST 31, MAY 31,

(Dollars in millions)

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Foreign exchange forwards and options Accrued liabilities 20 18

Foreign exchange forwards and options Deferred income taxes and other liabilities 1 —

Total derivatives not designated as hedging instruments 20 18

TOTAL DERIVATIVE LIABILITIES $ 342 $ 343

If the foreign exchange and interest rate swap derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 179 million and $ 175 million as of August 31, 2026 and May 31, 2026, respectively.

As of those dates, the Company posted $ 145 million and $ 119 million of cash collateral to various counterparties on the derivative liability balance and no amount of collateral was received from counterparties on the derivative asset balance.

The following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income:

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INCOME (LOSS) INTO INCOME

THREE MONTHS ENDED FEBRUARY 28, LOCATION OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE INCOME

(LOSS) INTO INCOME THREE MONTHS ENDED FEBRUARY 28,

2026 2025 2026 2025

Derivatives designated as cash flow hedges:

Foreign exchange forwards and options $ ( 8 ) $ ( 30 ) Revenues $ 3 $ ( 25 )

Foreign exchange forwards and options ( 190 ) 180 Cost of sales ( 8 ) 67

Foreign exchange forwards and options ( 58 ) 66 Other (income) expense, net ( 20 ) 57

Interest rate swaps (2)

— — Interest (income) expense, net ( 2 ) ( 2 )

TOTAL DESIGNATED CASH FLOW HEDGES $ ( 256 ) $ 216 $ ( 27 ) $ 97

(1) For the three months ended February 28, 2026 and 2025, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

(2) Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest (income) expense, net over the term of the issued debt.

(Dollars in millions)

AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER

COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES (1)

AMOUNT OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE

INCOME (LOSS) INTO INCOME (1)

NINE MONTHS ENDED FEBRUARY 28, LOCATION OF GAIN (LOSS)

THREE MONTHS ENDED AUGUST 31, LOCATION OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE INCOME

(LOSS) INTO INCOME NINE MONTHS ENDED FEBRUARY 28,

(LOSS) INTO INCOME THREE MONTHS ENDED AUGUST 31,

2026 2025 2026 2025

3 unchanged sentences

Foreign exchange forwards and options 27 ( 48 ) Other (income) expense, net ( 2 ) ( 14 )

Interest rate swaps (2)

— — Interest (income) expense, net ( 5 ) ( 6 )

TOTAL DESIGNATED CASH FLOW HEDGES $ 46 $ ( 158 ) $ ( 36 ) $ 29

(1) For the nine months ended February 28, 2026 and 2025, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

AMOUNT OF GAIN (LOSS) RECOGNIZED

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ON DERIVATIVES

THREE MONTHS ENDED FEBRUARY 28, NINE MONTHS ENDED FEBRUARY 28,

THREE MONTHS ENDED AUGUST 31,

(Dollars in millions)

2026 2025 2026 2025

Derivatives not designated as hedging instruments:

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CASH FLOW HEDGES

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately $ 17.2 billion and $ 18.4 billion as of February 28, 2026 and May 31, 2025, respectively.

Approximately $ 222 million of deferred net losses (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of February 28, 2026, are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Net income.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately $ 15.9 billion and $ 16.4 billion as of August 31, 2026 and May 31, 2026, respectively.

Approximately $ 101 million of deferred net losses (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of August 31, 2026, are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Net income.

Actual amounts ultimately reclassified to Net income are dependent on the exchange rates in effect when derivative contracts currently outstanding mature.

As of February 28, 2026, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 33 months.

As of August 31, 2026, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 32 months.

FAIR VALUE HEDGES

The total notional amount of outstanding interest rate swap contracts designated as fair value hedges was $ 2.4 billion as of February 28, 2026 and May 31, 2025, respectively.

The total notional amount of outstanding interest rate swap contracts designated as fair value hedges was $ 2.4 billion as of August 31, 2026 and May 31, 2026.

UNDESIGNATED DERIVATIVE INSTRUMENTS

The total notional amount of outstanding undesignated derivative instruments was $ 5.3 billion and $ 4.0 billion as of February 28, 2026 and May 31, 2025, respectively.

As of February 28, 2026, the Company was in compliance with all credit risk-related contingent features and considers the impact of the risk of counterparty default to be immaterial.

For additional information related to the Company's derivative financial instruments and collateral, refer to Note 3 — Fair Value Measurements.

The total notional amount of outstanding undesignated derivative instruments was $ 5.4 billion and $ 5.0 billion as of August 31, 2026 and May 31, 2026, respectively.

NOTE 8 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at November 30, 2025 $ ( 35 ) $ ( 135 ) $ 115 $ ( 49 ) $ ( 104 )

Other comprehensive income (loss):

Other comprehensive gains (losses) before reclassifications (2)

113 ( 236 ) — 1 ( 122 )

Reclassifications to net income of previously deferred (gains) losses (2)(3)

— 20 — ( 1 ) 19

Total other comprehensive income (loss) 113 ( 216 ) — — ( 103 )

Balance at February 28, 2026 $ 78 $ ( 351 ) $ 115 $ ( 49 ) $ ( 207 )

(1) The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.

(2) Net of immaterial tax impact.

(3) Reclassifications to net income of previously deferred (gains) losses are recorded within Other (income) expense, net for foreign currency translation adjustment, net investment hedges, and other.

(Dollars in millions)

FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1)

CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at November 30, 2024 $ ( 342 ) $ 470 $ 115 $ ( 41 ) $ 202

Other comprehensive income (loss):

Other comprehensive gains (losses) before reclassifications (2)

( 57 ) 205 — 4 152

Reclassifications to net income of previously deferred (gains) losses (2)(3)

— ( 86 ) — ( 5 ) ( 91 )

Total other comprehensive income (loss) ( 57 ) 119 — ( 1 ) 61

Balance at February 28, 2025 $ ( 399 ) $ 589 $ 115 $ ( 42 ) $ 263

(2) Net of immaterial tax impact.

(Dollars in millions)

FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1)

CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at May 31, 2026 $ 9 $ ( 213 ) $ 115 $ ( 52 ) $ ( 141 )

1 unchanged sentence

Other comprehensive gains (losses) before reclassifications 26 48 — ( 3 ) 71

192 ( 144 ) — 4 52

Reclassifications to net income of previously deferred (gains) losses (2)

1 unchanged sentence

Total other comprehensive income (loss) 26 81 — ( 5 ) 102

Balance at February 28, 2026 $ 78 $ ( 351 ) $ 115 $ ( 49 ) $ ( 207 )

Balance at August 31, 2026 $ 35 $ ( 132 ) $ 115 $ ( 57 ) $ ( 39 )

(1) The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.

(2) Net of immaterial tax impact.

(2) Reclassifications to net income of previously deferred (gains) losses are recorded within Other (income) expense, net for foreign currency translation adjustment, net investment hedges and other.

5 unchanged sentences

Other comprehensive gains (losses) before reclassifications 134 ( 155 ) — 2 ( 19 )

( 143 ) 546 — 14 417

Reclassifications to net income of previously deferred (gains) losses (2)

1 unchanged sentence

Total other comprehensive income (loss) 134 ( 186 ) — 2 ( 50 )

Balance at February 28, 2025 $ ( 399 ) $ 589 $ 115 $ ( 42 ) $ 263

Balance at August 31, 2025 $ 20 $ ( 393 ) $ 115 $ ( 50 ) $ ( 308 )

(2) Net of immaterial tax impact.

(2) Reclassifications to net income of previously deferred (gains) losses are recorded within Other (income) expense, net for foreign currency translation adjustment, net investment hedges and other.

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The following tables present the Company's Revenues by reportable operating segment, disaggregated by major product line and distribution channel:

THREE MONTHS ENDED FEBRUARY 28, 2026

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

Footwear $ 3,326 $ 1,789 $ 1,187 $ 1,051 $ — $ 7,353 $ 231 $ — $ 7,584

Apparel 1,480 926 397 381 — 3,184 12 — 3,196

Equipment 220 159 31 58 — 468 4 — 472

Other — — — — 7 7 17 3 27

TOTAL REVENUES $ 5,026 $ 2,874 $ 1,615 $ 1,490 $ 7 $ 11,012 $ 264 $ 3 $ 11,279

Sales to Wholesale Customers $ 2,768 $ 1,919 $ 888 $ 891 $ — $ 6,466 $ 142 $ — $ 6,608

Sales through Direct to Consumer 2,258 955 727 599 — 4,539 105 — 4,644

Other — — — — 7 7 17 3 27

TOTAL REVENUES $ 5,026 $ 2,874 $ 1,615 $ 1,490 $ 7 $ 11,012 $ 264 $ 3 $ 11,279

THREE MONTHS ENDED FEBRUARY 28, 2025

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

Footwear $ 3,132 $ 1,742 $ 1,282 $ 1,052 $ — $ 7,208 $ 349 $ — $ 7,557

Apparel 1,510 913 412 358 — 3,193 22 — 3,215

Equipment 222 156 39 60 — 477 7 — 484

Other — — — — 12 12 27 ( 26 ) 13

TOTAL REVENUES $ 4,864 $ 2,811 $ 1,733 $ 1,470 $ 12 $ 10,890 $ 405 $ ( 26 ) $ 11,269

Sales to Wholesale Customers $ 2,499 $ 1,817 $ 995 $ 844 $ — $ 6,155 $ 208 $ — $ 6,363

Sales through Direct to Consumer 2,365 994 738 626 — 4,723 170 — 4,893

Other — — — — 12 12 27 ( 26 ) 13

TOTAL REVENUES $ 4,864 $ 2,811 $ 1,733 $ 1,470 $ 12 $ 10,890 $ 405 $ ( 26 ) $ 11,269

NINE MONTHS ENDED FEBRUARY 28, 2026

THREE MONTHS ENDED AUGUST 31, 2026

(Dollars in millions)

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TOTAL REVENUES $ 5,127 $ 3,176 $ 1,180 $ 1,463 $ 6 $ 10,952 $ 263 $ ( 2 ) $ 11,213

NINE MONTHS ENDED FEBRUARY 28, 2025

THREE MONTHS ENDED AUGUST 31, 2025

(Dollars in millions)

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Converse other revenues were primarily attributable to licensing businesses.

Corporate revenues primarily consisted 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 the Company's central foreign exchange risk management program.

As of February 28, 2026 and May 31, 2025, the Company did not have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets.

Corporate revenues primarily consisted of foreign currency gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse but managed through the Company's central foreign exchange risk management program.

As of August 31, 2026 and May 31, 2026, the Company did no t have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets.

NOTE 10 — SEGMENT INFORMATION

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The Company's segments are defined as follows:

The NIKE Brand reportable operating segments are:

The NIKE Brand reportable segments are:

North America;

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the design, marketing, licensing and selling of casual sneakers, apparel and accessories.

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

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

depreciation and amortization related to the Company's headquarters;

unallocated insurance, benefit and compensation programs, including stock-based compensation;

unallocated insurance;

benefit and compensation programs, including stock-based compensation;

and certain foreign currency gains and losses, including certain hedge gains and losses.

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Differences between these standard rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses and other conversion gains and losses.

THREE MONTHS ENDED FEBRUARY 28, 2026

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 5,026 $ 2,874 $ 1,615 $ 1,490 $ 7 $ 11,012 $ 264 $ 3 $ 11,279

Cost of sales 3,036 1,705 839 870 160 6,610 167 ( 28 ) 6,749

Gross profit (loss) 1,990 1,169 776 620 ( 153 ) 4,402 97 31 4,530

Demand creation expense

416 296 97 91 170 1,070 17 3 1,090

Operating overhead expense

593 360 235 200 886 2,274 120 493 2,887

Total selling and administrative expense

1,009 656 332 291 1,056 3,344 137 496 3,977

Other segment items (1)

— ( 2 ) ( 23 ) ( 3 ) — ( 28 ) — ( 54 ) ( 82 )

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 981 $ 515 $ 467 $ 332 $ ( 1,209 ) $ 1,086 $ ( 40 ) $ ( 411 )

Interest (income) expense, net

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES

Supplemental information:

Depreciation and amortization (2)

$ 37 37 11 13 58 156 2 27 $ 185

(1) At NIKE Brand segments and Converse, other segment items consist of unusual or non-operating transactions that occur outside the normal course of business.

At Corporate, this also includes 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.

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

THREE MONTHS ENDED FEBRUARY 28, 2025

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 4,864 $ 2,811 $ 1,733 $ 1,470 $ 12 $ 10,890 $ 405 $ ( 26 ) $ 11,269

Cost of sales 2,766 1,696 953 829 148 6,392 217 ( 15 ) 6,594

Gross profit (loss) 2,098 1,115 780 641 ( 136 ) 4,498 188 ( 11 ) 4,675

Demand creation expense

401 267 123 97 158 1,046 40 2 1,088

Operating overhead expense

596 353 235 200 802 2,186 108 505 2,799

Total selling and administrative expense

997 620 358 297 960 3,232 148 507 3,887

Other segment items (1)

( 2 ) 15 1 ( 2 ) ( 3 ) 9 1 ( 48 ) ( 38 )

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 1,103 $ 480 $ 421 $ 346 $ ( 1,093 ) $ 1,257 $ 39 $ ( 470 )

Interest (income) expense, net

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES

Supplemental information:

Depreciation and amortization (2)

$ 49 37 11 12 55 164 3 31 $ 198

(1) At NIKE Brand segments and Converse, other segment items consist of unusual or non-operating transactions that occur outside the normal course of business.

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

NINE MONTHS ENDED FEBRUARY 28, 2026

THREE MONTHS ENDED AUGUST 31, 2026

(Dollars in millions)

22 unchanged sentences

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

NINE MONTHS ENDED FEBRUARY 28, 2025

THREE MONTHS ENDED AUGUST 31, 2025

(Dollars in millions)

22 unchanged sentences

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

FEBRUARY 28, MAY 31,

AUGUST 31, MAY 31,

(Dollars in millions)

7 unchanged sentences

Converse 148 171

Corporate (2)

( 79 ) ( 166 )

1 unchanged sentence

$ 7,846 $ 7,501

(1) Inventories as of February 28, 2026 and May 31, 2025 were substantially all finished goods.

(1) Inventories as of August 31, 2026 and May 31, 2026 were substantially all finished goods.

(2) Corporate inventories represent the difference between actual foreign currency exchange rates and the standard foreign currency rates used to record non-functional currency denominated product purchases within the geographic segments and Converse.

NOTE 11 — COMMITMENTS AND CONTINGENCIES

As of February 28, 2026 and May 31, 2025, the Company had outstanding bank guarantees and letters of credit of approximately $ 1.3 billion and $ 0.9 billion, respectively, issued primarily for real estate agreements, self-insurance programs, other general business obligations and legal matters.

In the ordinary course of business, the Company is subject to various legal proceedings, claims and government investigations relating to its business, products and actions of its employees and representatives, including contractual and employment relationships, product liability, antitrust, customs, tax, intellectual property and other matters.

10 unchanged sentences

NOTE 12 — SEVERANCE AND OTHER EMPLOYEE COSTS

For the three and nine months ended February 28, 2026, the Company recognized $ 230 million and $ 304 million, respectively, of estimated pre-tax employee severance costs primarily related to organizational changes.

Employee severance costs are recognized when a future related expense is considered probable and reasonably estimable.

The expected pre-tax charges are estimates and are subject to a number of assumptions and actual results may vary from the estimates provided.

For the three and nine months ended February 28, 2026, $ 193 million and $ 254 million, respectively, were classified within Operating overhead expense and $ 37 million and $ 50 million, respectively, were classified within Cost of sales on the Unaudited Condensed Consolidated Statements of Income .

The majority of these charges were classified within Global Brand Divisions and Converse.

As of February 28, 2026, the Company made cash payments related to employee severance costs of $ 82 million.

As of February 28, 2026, the remaining severance and other employee costs of $ 222 million are reflected within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets, classified within Compensation and benefits, excluding taxes in Note 2 — Accrued Liabilities.

2026 SEVERANCE

As of May 31, 2026, severance and other employee costs of $ 243 million were reflected within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets, classified within Compensation and benefits, excluding taxes in Note 2 — Accrued Liabilities.

During the first quarter of fiscal 2027, the Company paid substantially all of the remaining liability balance.

NOTE 13 — SUPPLIER FINANCE PROGRAMS

As of February 28, 2026 and May 31, 2025, the Company had approximately $ 0.7 billion and $ 1.1 billion, respectively, of outstanding supplier obligations confirmed as valid under the voluntary supplier finance programs.

As of August 31, 2026 and May 31, 2026, the Company had approximately $ 1.1 billion of outstanding supplier obligations confirmed as valid under the voluntary supplier finance programs.

These amounts are included within Accounts payable on the Unaudited Condensed Consolidated Balance Sheets.

NOTE 14 — SUBSEQUENT EVENTS

In October 2026, the Company announced a multi-year enterprise program, which includes and builds upon the previous cost realignment plan announced in March 2026, collectively known as Pace (the "program").

The program is intended to enhance productivity, improve organizational effectiveness, and decrease NIKE's cost structure.

The Company expects the program to result in pre-tax charges of approximately $ 1.0 billion, which is in addition to approximately $ 0.3 billion of severance costs recognized in fiscal 2026 in connection with the March 2026 plan.

These costs are expected to consist primarily of employee severance and other employee-related costs.

The Company expects approximately $ 0.3 billion to be recognized in fiscal 2027, largely within Operating overhead expense, with the remainder expected to be recognized through fiscal 2031.

It is estimated that the majority of the charges will result in future cash expenditures and all charges will be substantially incurred by the end of fiscal 2031, subject to local law requirements.

The expected pre-tax charges and future cash expenditures are estimates and are subject to a number of assumptions, including local law requirements in various jurisdictions.

Actual charges and cash expenditures may differ, possibly materially, from the estimates provided above.

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

What changed 10-Q

Item 1. Financial Statements