NIKE, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS NIKE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED AUGUST 31, (In millions, except per share data) 2026 2025 Revenues $ 11,213 $ 11,720 Cost of sales 6,415 6,777 Gross profit 4,798 4,943 Demand creation expense 1,252 1,188 Operating overhead expense 2,658 2,828 Total selling and administrative expense 3,910 4,016 Interest (income) expense, net ( 14 ) ( 18 ) Other (income) expense, net ( 19 ) 23 Income before income taxes 921 922 Income tax expense 209 195 NET INCOME $ 712 $ 727 Earnings per common share: Basic $ 0.48 $ 0.49 Diluted $ 0.48 $ 0.49 Weighted average common shares outstanding: Basic 1,483.6 1,476.6 Diluted 1,484.2 1,479.0 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 1 Table of Contents NIKE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED AUGUST 31, (Dollars in millions) 2026 2025 Net income $ 712 $ 727 Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustment 26 134 Change in net gains (losses) on cash flow hedges 81 ( 186 ) Change in net gains (losses) on other ( 5 ) 2 Total other comprehensive income (loss), net of tax 102 ( 50 ) TOTAL COMPREHENSIVE INCOME $ 814 $ 677 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 2 Table of Contents NIKE, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AUGUST 31, MAY 31, (In millions) 2026 2026 ASSETS Current assets: Cash and equivalents $ 6,903 $ 7,563 Short-term investments 1,465 1,464 Accounts receivable, net 5,242 5,931 Inventories 7,846 7,501 Prepaid expenses and other current assets 2,217 2,144 Total current assets 23,673 24,603 Property, plant and equipment, net 4,887 4,796 Operating lease right-of-use assets, net 2,947 2,838 Identifiable intangible assets, net 259 259 Goodwill 240 240 Deferred income taxes and other assets 5,788 5,674 TOTAL ASSETS $ 37,794 $ 38,410 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 2,000 $ 2,000 Accounts payable 3,420 3,600 Current portion of operating lease liabilities 473 478 Accrued liabilities 5,338 6,092 Income taxes payable 178 377 Total current liabilities 11,409 12,547 Long-term debt 5,893 5,942 Operating lease liabilities 2,706 2,613 Deferred income taxes and other liabilities 2,566 2,443 Commitments and contingencies (Note 11) Redeemable preferred stock — — Shareholders' equity: Common stock at stated value: Class A convertible — 281 and 281 shares outstanding — — Class B — 1,202 and 1,202 shares outstanding 3 3 Capital in excess of stated value 15,312 15,158 Accumulated other comprehensive income (loss) ( 39 ) ( 141 ) Retained earnings (deficit) ( 56 ) ( 155 ) Total shareholders' equity 15,220 14,865 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 37,794 $ 38,410 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 3 Table of Contents NIKE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED AUGUST 31, (Dollars in millions) 2026 2025 Cash provided (used) by operations: Net income $ 712 $ 727 Adjustments to reconcile net income to net cash provided (used) by operations: Depreciation and amortization 193 190 Deferred income taxes ( 67 ) ( 25 ) Stock-based compensation 158 185 Impairment and other 9 8 Net foreign currency adjustments ( 24 ) 34 Changes in certain working capital components and other assets and liabilities: (Increase) decrease in accounts receivable 695 ( 215 ) (Increase) decrease in inventories ( 312 ) ( 610 ) (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 Cash provided (used) by operations 135 222 Cash provided (used) by investing activities: Purchases of short-term investments ( 407 ) ( 355 ) Maturities of short-term investments 36 209 Sales of short-term investments 378 294 Additions to property, plant and equipment ( 199 ) ( 207 ) Cash provided (used) by investing activities ( 192 ) ( 59 ) Cash provided (used) by financing activities: Proceeds from exercise of stock options and other stock issuances — 127 Repurchase of common stock — ( 126 ) Dividends — common and preferred ( 610 ) ( 591 ) Other financing activities ( 8 ) ( 8 ) Cash provided (used) by financing activities ( 618 ) ( 598 ) Effect of exchange rate changes on cash and equivalents 15 ( 5 ) Net increase (decrease) in cash and equivalents ( 660 ) ( 440 ) Cash and equivalents, beginning of period 7,563 7,464 CASH AND EQUIVALENTS, END OF PERIOD $ 6,903 $ 7,024 Supplemental disclosure of cash flow information: Non-cash additions to property, plant and equipment $ 225 $ 101 Dividends declared and not paid 613 594 The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 4 Table of Contents NIKE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT) TOTAL 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 Dividends on common stock ($ 0.41 per share) and preferred stock ($ 0.10 per share) ( 613 ) ( 613 ) Issuance of shares to employees, net of shares withheld for employee taxes — — ( 4 ) ( 4 ) Stock-based compensation 158 158 Net income 712 712 Other comprehensive income (loss) 102 102 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) TOTAL CLASS A CLASS B (In millions, except per share data) SHARES AMOUNT SHARES AMOUNT Balance at May 31, 2025 290 $ — 1,186 $ 3 $ 14,195 $ ( 258 ) $ ( 727 ) $ 13,213 Stock options exercised 3 — 126 126 Conversion to Class B Common Stock ( 1 ) — 1 — — Repurchase of Class B Common Stock ( 2 ) — ( 17 ) ( 106 ) ( 123 ) Dividends on common stock ($ 0.40 per share) and preferred stock ($ 0.10 per share) ( 594 ) ( 594 ) Issuance of shares to employees, net of shares withheld for employee taxes — — ( 16 ) ( 16 ) Stock-based compensation 185 185 Net income 727 727 Other comprehensive income (loss) ( 50 ) ( 50 ) 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. 5 Table of Contents NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 Summary of Significant Accounting Policies 7 NOTE 2 Accrued Liabilities 7 NOTE 3 Fair Value Measurements 8 NOTE 4 Income Taxes 9 NOTE 5 Stock-Based Compensation 10 NOTE 6 Earnings Per Share 10 NOTE 7 Risk Management and Derivatives 11 NOTE 8 Accumulated Other Comprehensive Income (Loss) 13 NOTE 9 Revenues 14 NOTE 10 Segment Information 15 NOTE 11 Commitments and Contingencies 17 NOTE 12 Severance and Other Employee Costs 17 NOTE 13 Supplier Finance Programs 18 NOTE 14 Subsequent Events 18 6 Table of Contents NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Unaudited Condensed Consolidated Financial Statements include the accounts of NIKE, Inc. and its subsidiaries (the "Company" or "NIKE") and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim period. The year-end Condensed Consolidated Balance Sheet data as of May 31, 2026, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). 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 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 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 prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures. NOTE 2 — ACCRUED LIABILITIES Accrued liabilities included the following: AUGUST 31, MAY 31, (Dollars in millions) 2026 2026 Sales-related reserves $ 1,488 $ 1,589 Compensation and benefits, excluding taxes 1,112 1,569 Dividends payable 618 618 Other 2,120 2,316 TOTAL ACCRUED LIABILITIES $ 5,338 $ 6,092 7 Table of Contents NOTE 3 — FAIR VALUE MEASUREMENTS 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 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) ASSETS AT FAIR VALUE CASH AND EQUIVALENTS SHORT-TERM INVESTMENTS Cash $ 1,568 $ 1,568 $ — Level 1: U.S. Treasury securities 755 3 752 Level 2: Commercial paper and bonds 728 15 713 Money market funds 4,966 4,966 — Time deposits 351 351 — Total Level 2 6,045 5,332 713 TOTAL $ 8,368 $ 6,903 $ 1,465 MAY 31, 2026 (Dollars in millions) ASSETS AT FAIR VALUE CASH AND EQUIVALENTS SHORT-TERM INVESTMENTS Cash $ 1,719 $ 1,719 $ — Level 1: U.S. Treasury securities 769 2 767 Level 2: Commercial paper and bonds 710 13 697 Money market funds 5,601 5,601 — Time deposits 228 228 — Total Level 2 6,539 5,842 697 TOTAL $ 9,027 $ 7,563 $ 1,464 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 $ 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. FINANCIAL ASSETS AND LIABILITIES NOT RECORDED AT FAIR VALUE The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts, debt issuance costs and interest rate swap fair value adjustments. 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 $ 6.7 billion at August 31, 2026 and $ 6.8 billion at May 31, 2026. 8 Table of Contents NOTE 4 — INCOME TAXES 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 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. The Company is currently under audit by the U.S. Internal Revenue Service ("IRS") for fiscal years 2017 through 2023. The Company has closed all U.S. 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 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. The Company believes the investigation is without merit. If this matter is adversely resolved, the Netherlands may be required to assess additional amounts with respect to prior periods, and the Company's income taxes related to prior periods in the Netherlands could increase. 9 Table of Contents NOTE 5 — STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION The NIKE, Inc. Stock Incentive Plan (the "Stock Incentive Plan") provides for the issuance of up to 843 million previously unissued shares of Class B Common Stock in connection with equity awards granted under the Stock Incentive Plan. 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. 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 AUGUST 31, (Dollars in millions) 2026 2025 Stock options $ 59 $ 76 ESPPs 13 15 Restricted stock and restricted stock units 86 94 TOTAL STOCK-BASED COMPENSATION EXPENSE $ 158 $ 185 STOCK OPTIONS 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 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 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 Net income available to common stockholders $ 712 $ 727 Determination of shares: Weighted average common shares outstanding 1,483.6 1,476.6 Assumed conversion of dilutive stock options and awards 0.6 2.4 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,484.2 1,479.0 Earnings per common share: Basic $ 0.48 $ 0.49 Diluted $ 0.48 $ 0.49 10 Table of Contents NOTE 7 — RISK MANAGEMENT AND DERIVATIVES 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. 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, which are classified within Level 2 of the fair value hierarchy: DERIVATIVE ASSETS BALANCE SHEET LOCATION AUGUST 31, MAY 31, (Dollars in millions) 2026 2026 Derivatives formally designated as hedging instruments: Foreign exchange forwards and options Prepaid expenses and other current assets $ 118 $ 111 Foreign exchange forwards and options Deferred income taxes and other assets 53 44 Interest rate swaps Deferred income taxes and other assets — 6 Total derivatives formally designated as hedging instruments 171 161 Derivatives not designated as hedging instruments: Foreign exchange forwards and options Prepaid expenses and other current assets 25 29 Total derivatives not designated as hedging instruments 25 29 TOTAL DERIVATIVE ASSETS $ 196 $ 190 DERIVATIVE LIABILITIES BALANCE SHEET LOCATION AUGUST 31, MAY 31, (Dollars in millions) 2026 2026 Derivatives formally designated as hedging instruments: Foreign exchange forwards and options Accrued liabilities $ 220 $ 253 Foreign exchange forwards and options Deferred income taxes and other liabilities 49 62 Interest rate swaps Deferred income taxes and other liabilities 53 10 Total derivatives formally designated as hedging instruments 322 325 Derivatives not designated as hedging instruments: Foreign exchange forwards and options Accrued liabilities 20 18 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. 11 Table of Contents The following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income: (Dollars in millions) AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME THREE MONTHS ENDED AUGUST 31, LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME THREE MONTHS ENDED AUGUST 31, 2026 2025 2026 2025 Derivatives designated as cash flow hedges: Foreign exchange forwards and options $ ( 8 ) $ 43 Revenues $ ( 4 ) $ ( 7 ) Foreign exchange forwards and options 27 ( 153 ) Cost of sales ( 30 ) 50 Foreign exchange forwards and options 27 ( 48 ) Other (income) expense, net ( 2 ) ( 14 ) TOTAL DESIGNATED CASH FLOW HEDGES $ 46 $ ( 158 ) $ ( 36 ) $ 29 AMOUNT OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES LOCATION OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES THREE MONTHS ENDED AUGUST 31, (Dollars in millions) 2026 2025 Derivatives not designated as hedging instruments: Foreign exchange forwards and options $ ( 29 ) $ 17 Other (income) expense, net CASH FLOW HEDGES 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 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 August 31, 2026 and May 31, 2026. UNDESIGNATED DERIVATIVE INSTRUMENTS 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. 12 Table of Contents NOTE 8 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in Accumulated other comprehensive income (loss), net of tax, were as follows: (Dollars in millions) FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1) CASH FLOW HEDGES NET INVESTMENT HEDGES (1) OTHER TOTAL Balance at May 31, 2026 $ 9 $ ( 213 ) $ 115 $ ( 52 ) $ ( 141 ) Other comprehensive income (loss): Other comprehensive gains (losses) before reclassifications 26 48 — ( 3 ) 71 Reclassifications to net income of previously deferred (gains) losses (2) — 33 — ( 2 ) 31 Total other comprehensive income (loss) 26 81 — ( 5 ) 102 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) 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) OTHER TOTAL Balance at May 31, 2025 $ ( 114 ) $ ( 207 ) $ 115 $ ( 52 ) $ ( 258 ) Other comprehensive income (loss): Other comprehensive gains (losses) before reclassifications 134 ( 155 ) — 2 ( 19 ) Reclassifications to net income of previously deferred (gains) losses (2) — ( 31 ) — — ( 31 ) Total other comprehensive income (loss) 134 ( 186 ) — 2 ( 50 ) Balance at August 31, 2025 $ 20 $ ( 393 ) $ 115 $ ( 50 ) $ ( 308 ) (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) 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. For additional information related to the Company's cash flow hedges, refer to Note 7 — Risk Management and Derivatives. 13 Table of Contents NOTE 9 — REVENUES DISAGGREGATION OF REVENUES The following tables present the Company's Revenues by reportable operating segment, disaggregated by major product line and distribution channel: THREE MONTHS ENDED AUGUST 31, 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. Revenues by: Footwear $ 3,259 $ 1,798 $ 866 $ 1,028 $ — $ 6,951 $ 227 $ — $ 7,178 Apparel 1,566 1,163 279 376 — 3,384 8 — 3,392 Equipment 302 215 35 59 — 611 6 — 617 Other — — — — 6 6 22 ( 2 ) 26 TOTAL REVENUES $ 5,127 $ 3,176 $ 1,180 $ 1,463 $ 6 $ 10,952 $ 263 $ ( 2 ) $ 11,213 Revenues by: Sales to Wholesale Customers $ 2,981 $ 2,233 $ 644 $ 946 $ — $ 6,804 $ 144 $ — $ 6,948 Sales through Direct to Consumer 2,146 943 536 517 — 4,142 97 — 4,239 Other — — — — 6 6 22 ( 2 ) 26 TOTAL REVENUES $ 5,127 $ 3,176 $ 1,180 $ 1,463 $ 6 $ 10,952 $ 263 $ ( 2 ) $ 11,213 THREE MONTHS ENDED AUGUST 31, 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. Revenues by: Footwear $ 3,219 $ 2,021 $ 1,109 $ 1,061 $ — $ 7,410 $ 321 $ — $ 7,731 Apparel 1,474 1,106 362 371 — 3,313 11 — 3,324 Equipment 327 204 41 58 — 630 8 — 638 Other — — — — 9 9 26 ( 8 ) 27 TOTAL REVENUES $ 5,020 $ 3,331 $ 1,512 $ 1,490 $ 9 $ 11,362 $ 366 $ ( 8 ) $ 11,720 Revenues by: Sales to Wholesale Customers $ 2,736 $ 2,261 $ 893 $ 949 $ — $ 6,839 $ 195 $ — $ 7,034 Sales through Direct to Consumer 2,284 1,070 619 541 — 4,514 145 — 4,659 Other — — — — 9 9 26 ( 8 ) 27 TOTAL REVENUES $ 5,020 $ 3,331 $ 1,512 $ 1,490 $ 9 $ 11,362 $ 366 $ ( 8 ) $ 11,720 Global Brand Divisions revenues included NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Converse other revenues were primarily attributable to licensing businesses. 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. 14 Table of Contents NOTE 10 — SEGMENT INFORMATION The Company's reportable operating segments reflect the structure of the Company's internal organization and the financial information the Chief Operating Decision Maker ("CODM"), the Company's Chief Executive Officer, regularly reviews to assess Company performance and allocate resources. The CODM evaluates the performance of the Company's segments and allocates resources based on earnings before interest and taxes ("EBIT"), which represents Net income before Interest (income) expense, net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. The Company's segments are defined as follows: NIKE BRAND The NIKE Brand reportable segments are: North America; Europe, Middle East & Africa; Greater China; and Asia Pacific & Latin America, and include results for the NIKE and Jordan brands. Each NIKE Brand segment represents a geographic region operating predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment. Global Brand Divisions is included within NIKE Brand for presentation purposes to align with the way management views the Company. 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. CONVERSE Converse operates in one industry: the design, marketing, licensing and selling of casual sneakers, apparel and accessories. CORPORATE 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; and certain foreign currency gains and losses, including certain hedge gains and losses. As part of the Company's centrally managed foreign exchange risk management program, standard foreign currency rates are assigned twice per year to each NIKE Brand entity in the Company's geographic segments and to Converse. Inventories and Cost of sales for geographic segments and Converse reflect the use of these standard rates to recognize non-functional currency product purchases in the entity's functional currency. 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. 15 Table of Contents THREE MONTHS ENDED AUGUST 31, 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. Revenues $ 5,127 $ 3,176 $ 1,180 $ 1,463 $ 6 $ 10,952 $ 263 $ ( 2 ) $ 11,213 Cost of sales 2,903 1,765 619 844 168 6,299 144 ( 28 ) 6,415 Gross profit (loss) 2,224 1,411 561 619 ( 162 ) 4,653 119 26 4,798 Demand creation expense 511 313 88 93 232 1,237 14 1 1,252 Operating overhead expense 564 370 226 200 716 2,076 82 500 2,658 Total selling and administrative expense 1,075 683 314 293 948 3,313 96 501 3,910 Other segment items (1) ( 21 ) — ( 1 ) 2 — ( 20 ) ( 2 ) 3 ( 19 ) EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ 1,170 $ 728 $ 248 $ 324 $ ( 1,110 ) $ 1,360 $ 25 $ ( 478 ) Interest (income) expense, net ( 14 ) TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 921 Supplemental information: Depreciation and amortization (2) $ 41 38 11 17 54 161 2 30 $ 193 (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 AUGUST 31, 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. Revenues $ 5,020 $ 3,331 $ 1,512 $ 1,490 $ 9 $ 11,362 $ 366 $ ( 8 ) $ 11,720 Cost of sales 2,897 1,900 798 838 168 6,601 193 ( 17 ) 6,777 Gross profit (loss) 2,123 1,431 714 652 ( 159 ) 4,761 173 9 4,943 Demand creation expense 442 313 99 97 203 1,154 33 1 1,188 Operating overhead expense 547 382 238 208 831 2,206 102 520 2,828 Total selling and administrative expense 989 695 337 305 1,034 3,360 135 521 4,016 Other segment items (1) — 1 — ( 3 ) ( 1 ) ( 3 ) ( 1 ) 27 23 EARNINGS (LOSS) BEFORE INTEREST AND TAXES $ 1,134 $ 735 $ 377 $ 350 $ ( 1,192 ) $ 1,404 $ 39 $ ( 539 ) Interest (income) expense, net ( 18 ) TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES $ 922 Supplemental information: Depreciation and amortization (2) $ 38 39 12 16 54 159 2 29 $ 190 (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. 16 Table of Contents AUGUST 31, MAY 31, (Dollars in millions) 2026 2026 INVENTORIES (1) North America $ 3,491 $ 3,320 Europe, Middle East & Africa 2,209 2,253 Greater China 853 793 Asia Pacific & Latin America 1,049 964 Global Brand Divisions 175 166 TOTAL NIKE BRAND 7,777 7,496 Converse 148 171 Corporate (2) ( 79 ) ( 166 ) TOTAL NIKE, INC. INVENTORIES $ 7,846 $ 7,501 (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 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. The outcome of these legal matters is inherently uncertain, and the Company cannot predict the eventual outcome of currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences relating to those matters. When a loss related to a legal proceeding or claim is probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter. If one or more legal matters were to be resolved against the Company in a reporting period for amounts above management's expectations, the Company's financial position, operating results and cash flows for that reporting period could be materially adversely affected. In the opinion of management, based on its current knowledge and after consultation with counsel, the Company does not believe any currently pending legal matters will have a material adverse impact on the Company's results of operations, financial position or cash flows, except as described below. BELGIAN CUSTOMS CLAIM The Company has received claims for certain years from Belgian Customs Authorities for alleged underpaid duties related to products imported beginning in fiscal 2018. The Company disputes these claims and has engaged in the appellate process. The Company has issued bank guarantees in order to appeal the claims. At this time, the Company is unable to estimate the range of loss and cannot predict the final outcome as it could take several years to reach a resolution on this matter. If this matter is ultimately resolved against the Company, the amounts owed, including fines, penalties and other consequences relating to the matter, could have a material adverse effect on the Company's results of operations, financial position and cash flows. NOTE 12 — SEVERANCE AND OTHER EMPLOYEE COSTS 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. 17 Table of Contents NOTE 13 — 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. 18 Table of Contents