NIKE, Inc.

NIKE reported Q3 FY2026 revenue of $11.3 billion, up 8.9% from $11.3 billion in the prior year, as underlying growth was tempered by declining store traffic and elevated promotional activity in Greater China alongside Converse's strategic brand reset. This dynamic reflects management's focus on liquidating inventory through increased markdowns across NIKE Direct and higher sales returns and discounts with wholesale partners, aimed at reducing excess stock and freeing capacity for new product innovation.

Gross profit reached $4.5 billion, down 3.1% from $4.7 billion, yet gross margin expanded to 40.2% primarily due to lower inventory obsolescence reserves. This expansion more than offset softer revenues, supporting reported EBIT growth despite profitability challenges elsewhere. The shift underscores trade-offs in the inventory management strategy, where aggressive clearance actions preserved margins but eroded absolute profits through reduced average selling prices per pair and unit. Lower ASP per pair arose mainly from channel mix shifts, partially mitigated by favorable product mix and strategic pricing, while per-unit ASP reflected higher discounts offset similarly.

Net income declined 34.5% to $520 million, with diluted EPS falling 35.2% to $0.35, as gross margin gains were outweighed by operating pressures including these promotional intensives. Operating overhead, comprising wage and benefit expenses, administrative costs, R&D, bad debt, rent, depreciation, and technology investments, continued as a core spend area amid the reset.