Item 1. FINANCIAL STATEMENTS

92K characters. Original on sec.gov · Markdown

Item 1. FINANCIAL STATEMENTS

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME


	THREE MONTHS ENDED FEBRUARY 28,				NINE MONTHS ENDED FEBRUARY 28,
(In millions, except per share data)	2026		2025		2026		2025
Revenues	$	11,279	$	11,269	$	35,426	$	35,212
Cost of sales	6,749		6,594		20,908		19,891
Gross profit	4,530		4,675		14,518		15,321
Demand creation expense	1,090		1,088		3,551		3,436
Operating overhead expense	2,887		2,799		8,481		8,504
Total selling and administrative expense	3,977		3,887		12,032		11,940
Interest (income) expense, net	(15)		(18)		(42)		(85)
Other (income) expense, net	(82)		(38)		(43)		(101)
Income before income taxes	650		844		2,571		3,567
Income tax expense	130		50		532		559
NET INCOME	$	520	$	794	$	2,039	$	3,008
Earnings per common share:
Basic	$	0.35	$	0.54	$	1.38	$	2.02
Diluted	$	0.35	$	0.54	$	1.38	$	2.02
Weighted average common shares outstanding:
Basic	1,480.5		1,478.1		1,478.9		1,487.6
Diluted	1,481.6		1,480.6		1,480.4		1,491.0

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

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	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
Other comprehensive income (loss), net of tax:
Change in net foreign currency translation adjustment	113		(57)		192		(143)
Change in net gains (losses) on cash flow hedges	(216)		119		(144)		342
Change in net gains (losses) on other	—		(1)		3		11
Total other comprehensive income (loss), net of tax	(103)		61		51		210
TOTAL COMPREHENSIVE INCOME	$	417	$	855	$	2,090	$	3,218

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

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	FEBRUARY 28,		MAY 31,
(In millions)	2026		2025
ASSETS
Current assets:
Cash and equivalents	$	6,660	$	7,464
Short-term investments	1,397		1,687
Accounts receivable, net	5,369		4,717
Inventories	7,487		7,489
Prepaid expenses and other current assets	2,271		2,005
Total current assets	23,184		23,362
Property, plant and equipment, net	4,766		4,828
Operating lease right-of-use assets, net	2,886		2,712
Identifiable intangible assets, net	259		259
Goodwill	240		240
Deferred income taxes and other assets	5,729		5,178
TOTAL ASSETS	$	37,064	$	36,579
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	999	$	—
Notes payable	—		5
Accounts payable	2,888		3,479
Current portion of operating lease liabilities	493		502
Accrued liabilities	6,183		5,911
Income taxes payable	275		669
Total current liabilities	10,838		10,566
Long-term debt	7,030		7,961
Operating lease liabilities	2,656		2,550
Deferred income taxes and other liabilities	2,450		2,289
Commitments and contingencies (Note 12)
Redeemable preferred stock	—		—
Shareholders' equity:
Common stock at stated value:
Class A convertible — 281 and 290 shares outstanding	—		—
Class B — 1,199 and 1,186 shares outstanding	3		3
Capital in excess of stated value	14,904		14,195
Accumulated other comprehensive income (loss)	(207)		(258)
Retained earnings (deficit)	(610)		(727)
Total shareholders' equity	14,090		13,213
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	37,064	$	36,579

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

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)	2026		2025
Cash provided (used) by operations:
Net income	$	2,039	$	3,008
Adjustments to reconcile net income to net cash provided (used) by operations:
Depreciation and amortization	554		576
Deferred income taxes	(132)		(304)
Stock-based compensation	555		544
Impairment and other	40		35
Net foreign currency adjustments	1		24
Changes in certain working capital components and other assets and liabilities:
(Increase) decrease in accounts receivable	(623)		(164)
(Increase) decrease in inventories	24		(99)
(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets	260		(235)
Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities	(1,487)		(150)
Cash provided (used) by operations	1,231		3,235
Cash provided (used) by investing activities:
Purchases of short-term investments	(889)		(2,664)
Maturities of short-term investments	478		258
Sales of short-term investments	744		2,439
Additions to property, plant and equipment	(546)		(330)
Other investing activities	(63)		8
Cash provided (used) by investing activities	(276)		(289)
Cash provided (used) by financing activities:
Increase (decrease) in notes payable, net	(4)		(2)
Proceeds from exercise of stock options and other stock issuances	251		400
Repurchase of common stock	(146)		(2,786)
Dividends — common and preferred	(1,798)		(1,709)
Other financing activities	(81)		(79)
Cash provided (used) by 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)
Cash and equivalents, beginning of period	7,464		9,860
CASH AND EQUIVALENTS, END OF PERIOD	$	6,660	$	8,601
Supplemental disclosure of cash flow information:
Non-cash additions to property, plant and equipment	$	67	$	87
Dividends declared and not paid	611		594

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

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 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)		TOTAL
	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)		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	—		155						155
Conversion to Class B Common Stock	(9)	—		9	—								—
Repurchase of Class B Common Stock				(2)	—		(17)				(106)		(123)
Dividends on common stock ($1.22 per share) and preferred stock ($0.10 per share)											(1,816)		(1,816)
Issuance of shares to employees, net of shares withheld for employee taxes				3	—		16						16
Stock-based compensation							555						555
Net income											2,039		2,039
Other comprehensive income (loss)									51				51
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)		TOTAL
	CLASS A			CLASS B
(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT
Balance at May 31, 2024	298	$	—	1,205	$	3	$	13,409	$	53	$	965	$	14,430
Stock options exercised				5	—		274						274
Repurchase of Class B Common Stock				(34)	—		(311)				(2,442)		(2,753)
Dividends on common stock ($1.17 per share) and preferred stock ($0.10 per share)											(1,745)		(1,745)
Issuance of shares to employees, net of shares withheld for employee taxes				3	—		—				39		39
Stock-based compensation							544						544
Net income											3,008		3,008
Other comprehensive income (loss)									210				210
Balance at February 28, 2025	298	$	—	1,179	$	3	$	13,916	$	263	$	(175)	$	14,007

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

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1	Summary of Significant Accounting Policies	8
NOTE 2	Accrued Liabilities	8
NOTE 3	Fair Value Measurements	9
NOTE 4	Short-Term Borrowings and Credit Lines	10
NOTE 5	Income Taxes	11
NOTE 6	Stock-Based Compensation	11
NOTE 7	Earnings Per Share	13
NOTE 8	Risk Management and Derivatives	14
NOTE 9	Accumulated Other Comprehensive Income (Loss)	16
NOTE 10	Revenues	18
NOTE 11	Segment Information	20
NOTE 12	Commitments and Contingencies	23
NOTE 13	Severance and Other Employee Costs	23
NOTE 14	Supplier Finance Programs	24


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, 2025, 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, 2025 (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.

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,
(Dollars in millions)	2026		2025
Sales-related reserves	$	1,658	$	1,834
Compensation and benefits, excluding taxes	1,544		1,245
Dividends payable	616		598

Other	2,365		2,234
TOTAL ACCRUED LIABILITIES	$	6,183	$	5,911


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 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
(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS
Cash	$	1,693	$	1,693	$	—
Level 1:
U.S. Treasury securities	727		—		727
Level 2:
Commercial paper and bonds	680		28		652
Money market funds	4,787		4,787		—
Time deposits	150		150		—
U.S. Agency securities	20		2		18
Total Level 2	5,637		4,967		670
TOTAL	$	8,057	$	6,660	$	1,397


	MAY 31, 2025
(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS
Cash	$	1,221	$	1,221	$	—
Level 1:
U.S. Treasury securities	1,046		—		1,046
Level 2:
Commercial paper and bonds	675		45		630
Money market funds	5,902		5,902		—
Time deposits	297		295		2
U.S. Agency securities	10		1		9
Total Level 2	6,884		6,243		641
TOTAL	$	9,151	$	7,464	$	1,687

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. 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
Level 2:
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.


	MAY 31, 2025
	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
Level 2:
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.

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 $6,961 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.


NOTE 5 — 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 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, 2025, total gross unrecognized tax benefits, excluding related interest and penalties, were $1,026 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.

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 year 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.

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.


NOTE 6 — 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 ("PSUs"). 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,
(Dollars in millions)	2026		2025		2026		2025
Stock options(1)	$	68	$	69	$	215	$	222
ESPPs	19		17		45		53
Restricted stock and restricted stock units	107		83		295		269
TOTAL STOCK-BASED COMPENSATION EXPENSE	$	194	$	169	$	555	$	544

*(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.

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.


NOTE 7 — 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,
(In millions, except per share data)	2026		2025		2026		2025
Net income available to common stockholders	$	520	$	794	$	2,039	$	3,008
Determination of shares:
Weighted average common shares outstanding	1,480.5		1,478.1		1,478.9		1,487.6
Assumed conversion of dilutive stock options and awards	1.1		2.5		1.5		3.4
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	1,481.6		1,480.6		1,480.4		1,491.0
Earnings per common share:
Basic	$	0.35	$	0.54	$	1.38	$	2.02
Diluted	$	0.35	$	0.54	$	1.38	$	2.02


NOTE 8 — 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. 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. 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:


	DERIVATIVE ASSETS
	BALANCE SHEET LOCATION	FEBRUARY 28,			MAY 31,
(Dollars in millions)	2026			2025
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	104		$	75
Foreign exchange forwards and options	Deferred income taxes and other assets	25			22
Interest rate swaps	Deferred income taxes and other assets	85			24
Total derivatives formally designated as hedging instruments		214			121
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	36			10



Total derivatives not designated as hedging instruments		36			10
TOTAL DERIVATIVE ASSETS		$	250		$	131

	DERIVATIVE LIABILITIES
	BALANCE SHEET LOCATION	FEBRUARY 28,			MAY 31,
(Dollars in millions)	2026			2025
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	$	354		$	216
Foreign exchange forwards and options	Deferred income taxes and other liabilities	97			142
Interest rate swaps	Deferred income taxes and other liabilities	—			3
Total derivatives formally designated as hedging instruments		451			361
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	22			10

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

Total derivatives not designated as hedging instruments		23			10
TOTAL DERIVATIVE LIABILITIES		$	474		$	371

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(1)					AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME(1)
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) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		NINE MONTHS ENDED FEBRUARY 28,
2026	2025					2026	2025
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	39	$	(103)		Revenues		$	(1)	$	(70)
Foreign exchange forwards and options	(151)		478			Cost of sales		42		187

Foreign exchange forwards and options	(51)		194			Other (income) expense, net		(53)		102
Interest rate swaps(2)	—		—			Interest (income) expense, net		(5)		(6)
TOTAL DESIGNATED CASH FLOW HEDGES	$	(163)	$	569				$	(17)	$	213

*(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 IN INCOME ON DERIVATIVES								LOCATION OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
	THREE MONTHS ENDED FEBRUARY 28,				NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)	2026		2025		2026		2025


Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(61)	$	3	$	(41)	$	9	Other (income) expense, net

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. 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.

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.

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.

CREDIT RISK

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.

NOTE 9 — 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 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)		OTHER		TOTAL
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)		OTHER		TOTAL
Balance at May 31, 2025	$	(114)	$	(207)	$	115	$	(52)	$	(258)
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	192		(144)		—		4		52
Reclassifications to net income of previously deferred (gains) losses(2)(3)	—		—		—		(1)		(1)
Total other comprehensive income (loss)	192		(144)		—		3		51
Balance at February 28, 2026	$	78	$	(351)	$	115	$	(49)	$	(207)

*(2)*Net of immaterial tax impact.


(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL
Balance at May 31, 2024	$	(256)	$	247	$	115	$	(53)	$	53
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	(143)		546		—		14		417
Reclassifications to net income of previously deferred (gains) losses(2)(3)	—		(204)		—		(3)		(207)
Total other comprehensive income (loss)	(143)		342		—		11		210
Balance at February 28, 2025	$	(399)	$	589	$	115	$	(42)	$	263

*(2)*Net of immaterial tax impact.

For additional information related to the Company's cash flow hedges, refer to Note 8 — Risk Management and Derivatives.


NOTE 10 — 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 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.
Revenues by:
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
Revenues by:
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.
Revenues by:
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
Revenues by:
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
(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	$	10,087	$	5,822	$	3,250	$	3,263	$	—	$	22,422	$	805	$	—	$	23,227
Apparel	4,765		3,228		1,201		1,209		—		10,403		39		—		10,442
Equipment	827		547		99		175		—		1,648		17		—		1,665
Other	—		—		—		—		25		25		69		(2)		92
TOTAL REVENUES	$	15,679	$	9,597	$	4,550	$	4,647	$	25	$	34,498	$	930	$	(2)	$	35,426
Revenues by:
Sales to Wholesale Customers	$	9,054	$	6,368	$	2,548	$	2,834	$	—	$	20,804	$	480	$	—	$	21,284
Sales through Direct to Consumer	6,625		3,229		2,002		1,813		—		13,669		381		—		14,050
Other	—		—		—		—		25		25		69		(2)		92
TOTAL REVENUES	$	15,679	$	9,597	$	4,550	$	4,647	$	25	$	34,498	$	930	$	(2)	$	35,426


	NINE 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.
Revenues by:
Footwear	$	9,580	$	5,676	$	3,731	$	3,338	$	—	$	22,325	$	1,149	$	—	$	23,474
Apparel	4,534		3,042		1,244		1,143		—		9,963		65		—		10,028
Equipment	755		539		135		195		—		1,624		25		—		1,649
Other	—		—		—		—		39		39		96		(74)		61
TOTAL REVENUES	$	14,869	$	9,257	$	5,110	$	4,676	$	39	$	33,951	$	1,335	$	(74)	$	35,212
Revenues by:
Sales to Wholesale Customers	$	7,840	$	6,011	$	2,870	$	2,764	$	—	$	19,485	$	695	$	—	$	20,180
Sales through Direct to Consumer	7,029		3,246		2,240		1,912		—		14,427		544		—		14,971
Other	—		—		—		—		39		39		96		(74)		61
TOTAL REVENUES	$	14,869	$	9,257	$	5,110	$	4,676	$	39	$	33,951	$	1,335	$	(74)	$	35,212

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 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.


NOTE 11 — 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 operating 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 primarily consists 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.


	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.
Revenues	$	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																	(15)
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES																	$	650
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.
Revenues	$	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																	(18)
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES																	$	844
Supplemental information:
Depreciation and amortization(2)	$	49	37		11		12		55		164		3		31		$	198

*(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
(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	$	15,679	$	9,597	$	4,550	$	4,647	$	25	$	34,498	$	930	$	(2)	$	35,426
Cost of sales	9,268		5,530		2,473		2,672		480		20,423		536		(51)		20,908
Gross profit (loss)	6,411		4,067		2,077		1,975		(455)		14,075		394		49		14,518
Demand creation expense	1,331		943		341		297		558		3,470		74		7		3,551
Operating overhead expense	1,705		1,141		725		614		2,461		6,646		326		1,509		8,481
Total selling and administrative expense	3,036		2,084		1,066		911		3,019		10,116		400		1,516		12,032
Other segment items(1)	(1)		—		(24)		(7)		(1)		(33)		(1)		(9)		(43)
EARNINGS (LOSS) BEFORE INTEREST AND TAXES	$	3,376	$	1,983	$	1,035	$	1,071	$	(3,473)	$	3,992	$	(5)	$	(1,458)
Interest (income) expense, net																	(42)
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES																	$	2,571
Supplemental information:
Depreciation and amortization(2)	$	108	113		33		42		167		463		6		85		$	554

*(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
(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	$	14,869	$	9,257	$	5,110	$	4,676	$	39	$	33,951	$	1,335	$	(74)	$	35,212
Cost of sales	8,289		5,179		2,765		2,588		448		19,269		672		(50)		19,891
Gross profit (loss)	6,580		4,078		2,345		2,088		(409)		14,682		663		(24)		15,321
Demand creation expense	1,235		870		372		285		547		3,309		118		9		3,436
Operating overhead expense	1,656		1,091		727		597		2,499		6,570		332		1,602		8,504
Total selling and administrative expense	2,891		1,961		1,099		882		3,046		9,879		450		1,611		11,940
Other segment items(1)	(1)		14		(52)		(2)		(2)		(43)		—		(58)		(101)
EARNINGS (LOSS) BEFORE INTEREST AND TAXES	$	3,690	$	2,103	$	1,298	$	1,208	$	(3,453)	$	4,846	$	213	$	(1,577)
Interest (income) expense, net																	(85)
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES																	$	3,567
Supplemental information:
Depreciation and amortization(2)	$	119	108		37		36		171		471		11		94		$	576

*(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,
(Dollars in millions)	2026		2025
INVENTORIES(1)
North America	$	3,166	$	3,198
Europe, Middle East & Africa	2,269		2,042
Greater China	937		951
Asia Pacific & Latin America	1,011		905
Global Brand Divisions	157		148
TOTAL NIKE BRAND	7,540		7,244
Converse	195		272
Corporate	(248)		(27)
TOTAL NIKE, INC. INVENTORIES	$	7,487	$	7,489

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

NOTE 12 — 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. 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 13 — 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.

NOTE 14 — 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. These amounts are included within Accounts payable on the Unaudited Condensed Consolidated Balance Sheets.

Previous: Cover and table of contents · Next: Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS