AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Commercial trademark licensing, existing endorsement relationships and global distribution support differentiated demand. Wholesale growth demonstrates commercial traction, but does not quantify a protected price premium or exclusionary barrier.
durability · 2/4 · Existing contractual endorsement obligations and trademark licensing support continuity. Rising endorsement costs and product-response constraints limit confidence in durable economic benefits; spending commitments alone do not prove their returns.
customer dependency · 1/4 · Customers actually cancel or modify orders with minimal notice, and direct-channel demand continues to weaken. These indicate fragile dependency despite established brand demand; consumer switching costs are not demonstrated.
erosion resilience · 1/4 · Annual wholesale growth and improving gross margin provide offsets, but the latest quarter combines wholesale contraction, falling footwear units and another substantial direct decline despite increased brand investment.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Observed outcomes are mixed: footwear ASP reduced latest-quarter revenue by about one percentage point, while apparel ASP contributed about four points. Strategic pricing helped both, but discounts and mix prevent interpreting apparel ASP growth as a broad pure-price increase.
retention · 1/4 · Indirect demand evidence shows weak engagement: digital declines were attributed to reduced traffic, and direct revenue fell again in the latest quarter. Wholesale growth in fiscal 2026 offers an offset, but repeat-customer retention is not measured.
margin resilience · 2/4 · Gross margin improved 20 basis points in fiscal 2026 and 60 basis points in the latest quarter despite demand weakness. The latest improvement primarily reflects logistics savings, demonstrating some operating resilience rather than broad pricing strength.
contractual freedom · 2/4 · Implemented strategic pricing and discretionary discount programs demonstrate some ability to change prices and terms. Contractual discounts and customers' actual ability to cancel or change orders constrain that freedom; comprehensive pricing clauses are absent.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 6.89
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.74
Financial strength—
Missing required inputs: netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 62.34
- interestCoverageGrade
- 71.63
- currentRatioGrade
- 96.87
- Debt / FCF (x)
- 3.64
- Current ratio (x)
- 1.96
- cashInterestPaid
- 323.00
- cashInterestCoverage
- 8.88
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -1.56
- 3-year average SBC / revenue (%)
- 1.55
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · The continued buyback pause demonstrates spending restraint after $12.1 billion of cumulative repurchases. Actual investing cash use, dividend-led financing outflows and $8.4 billion of liquidity permit a mixed assessment, but do not establish investment returns or the affordability of distributions from operating cash flow.
incentive alignment · 3/4 · Actual outcomes demonstrate performance sensitivity: the fiscal 2024–2026 PSUs paid zero, and the committee reduced the fiscal 2026 financial-metric annual earnout from 101% to 74%. Granted retention awards are half service-based and half performance-based, with future vesting still conditional. Actual executive ownership is not established.
execution · 1/4 · Operating outcomes show fragile execution: latest-quarter revenue fell 5% currency-neutral, footwear units fell 5%, and direct revenue fell 9% currency-neutral. Annual wholesale growth and recent margin improvement are meaningful offsets, but a broad recovery is not demonstrated. Attribution to management is indirect.
governance · 2/4 · Independent key committees and auditors' access without management support substantive oversight. The dual-class structure constrains the Board's ability to change control arrangements without Class A approval, limiting an otherwise positive assessment.
Evidence
We sell our products through NIKE Direct operations, which are comprised of both NIKE-owned retail stores and sales through our digital platforms (also referred to as "NIKE Brand Digital") and to wholesale accounts, which include a mix of independent distributors, licensees and sales representatives in nearly all countries around the world.
Business — global direct and wholesale distribution · Filed 15/07/2026
In addition to the products we sell to our wholesale customers and directly to consumers through our NIKE Direct operations, we have also entered into license agreements that permit unaffiliated parties to manufacture and sell, using NIKE-owned trademarks, certain apparel, digital devices and applications and other equipment designed for sports activities.
Business — trademark licensing agreements · Filed 15/07/2026
We establish relationships with professional athletes, sports teams and leagues, as well as other public figures, including artists, designers and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers.
Risk factors — existing endorsement relationships and product authenticity · Filed 15/07/2026
•Endorsement Contracts — As of May 31, 2026, we had endorsement contract obligations, including associated marketing commitments, of approximately $15.5 billion, with approximately $1.7 billion payable within 12 months, primarily representing approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products.
Liquidity and capital resources — endorsement contractual obligations · Filed 15/07/2026
•NIKE Brand wholesale revenues were $27.5 billion in fiscal 2026 compared to $25.9 billion in fiscal 2025, up 6% on a reported basis and up 4% on a currency-neutral basis.
Fiscal 2026 operating results — wholesale revenue growth · Filed 15/07/2026
However, as competition in our industry has increased, the costs associated with establishing and retaining such sponsorships and other relationships have increased, and competition to attract and retain high-quality endorsers has intensified, including due to the growing influence of athletes' personal brands, the proliferation of athlete-led commercial ventures and a broader pool of competing brands seeking endorsement relationships.
Risk factors — increased endorsement costs and competition · Filed 15/07/2026
On a currency-neutral basis, NIKE Direct revenues were down 8% due to declines in NIKE Brand Digital sales of 12% and declines in NIKE store sales of 4%.
Fiscal 2026 operating results — direct, digital and store declines · Filed 15/07/2026
Unit sales of footwear decreased 5%, while lower average selling price ("ASP") per pair reduced footwear revenues by approximately 1 percentage point.
Fiscal 2027 first-quarter operating results — footwear units and ASP · Filed 02/10/2026
Lower ASP per pair was primarily due to channel mix and higher discounts, partially offset by strategic pricing.
Fiscal 2027 first-quarter operating results — footwear discounts and strategic pricing · Filed 02/10/2026
Unit sales of apparel decreased 2%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth.
Fiscal 2027 first-quarter operating results — apparel units and ASP · Filed 02/10/2026
Higher ASP per unit was primarily due to product mix and strategic pricing, partially offset by higher discounts.
Fiscal 2027 first-quarter operating results — apparel mix, strategic pricing and discounts · Filed 02/10/2026
On a currency-neutral basis, NIKE Direct revenues were down 9% due to declines in NIKE Brand Digital sales of 13% and declines in NIKE store sales of 5%.
Fiscal 2027 first-quarter operating results — direct, digital and store declines · Filed 02/10/2026
•NIKE Brand wholesale revenues were $6.8 billion for the first quarter of fiscal 2027 and the first quarter of fiscal 2026, down 1% on a currency-neutral basis.
Fiscal 2027 first-quarter operating results — wholesale revenue · Filed 02/10/2026
•Gross margin for the first quarter of fiscal 2027 increased 60 basis points to 42.8% primarily due to lower warehousing and logistics costs.
Fiscal 2027 first-quarter operating results — gross margin and logistics costs · Filed 02/10/2026
Gross margin increased 20 basis points to 42.9% for fiscal 2026 compared to 42.7% for fiscal 2025 due to the following:
Fiscal 2026 gross margin — reported annual change · Filed 15/07/2026
In addition, our customers may, and from time to time do, cancel orders, change delivery schedules or change the mix of products ordered with minimal notice.
Risk factors — actual customer order cancellations and changes · Filed 15/07/2026
Provisions for post-invoice sales discounts consist of both contractual programs and discretionary discounts that are expected to be granted at a later date.
Critical accounting estimates — contractual and discretionary sales discounts · Filed 15/07/2026
We paused repurchases under this program during the first quarter of fiscal 2026 and no shares were repurchased during the quarter ended August 31, 2026.
Liquidity and capital resources — continued repurchase pause · Filed 02/10/2026
As of August 31, 2026, we repurchased 124.4 million shares at an average price of $97.57 per share for a total approximate cost of $12.1 billion under the program.
Liquidity and capital resources — cumulative repurchase spending · Filed 02/10/2026
For the three months ended August 31, 2026, cash used by investing activities was $192 million, primarily driven by additions to Property, plant and equipment.
Liquidity and capital resources — actual investing cash use · Filed 02/10/2026
For the three months ended August 31, 2026, cash used by financing activities was $618 million, primarily driven by dividend payments.
Liquidity and capital resources — financing cash use and dividends · Filed 02/10/2026
As of August 31, 2026, we had Cash and equivalents and Short-term investments totaling $8.4 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, U.S.
Liquidity and capital resources — cash and short-term investments · Filed 02/10/2026
The fiscal 2024 – 2026 PSUs paid out at 0%.
Executive compensation — realized fiscal 2024–2026 PSU payout · Filed 15/07/2026
The fiscal 2026 PSP was earned at 101% based on achievement of the financial metrics; however, the Compensation Committee exercised negative discretion to reduce the financial metrics earnout to 74% to align with the broad-based global annual bonus plan.
Executive compensation — negative discretion on fiscal 2026 annual incentive · Filed 15/07/2026
The equity retention awards granted on December 10, 2025 will cliff vest on December 10, 2027 and are earned 50% subject to continuous service through the scheduled vesting date, and 50% subject to the achievement of FY27 Adjusted Operating Margin growth goal.
Executive compensation — granted retention awards and future vesting conditions · Filed 15/07/2026
Each of the Audit & Finance Committee, the Compensation Committee, and the Corporate Responsibility, Sustainability & Governance Committee are comprised solely of independent directors and the slate of Class B director nominees includes at least one member from each such committee.
Corporate governance — independent committee composition · Filed 15/07/2026
Although the Board cannot change or eliminate our dual class capital structure without the approval of the holders of the Class A Stock, our independent Corporate Responsibility, Sustainability & Governance Committee reviews our corporate governance, including our dual-class structure, periodically so as to align our internal practices with shareholder interests and feedback.
Corporate governance — dual-class structure and limits on Board authority · Filed 15/07/2026
The independent registered public accounting firm and the internal corporate auditors have full access to the Audit & Finance Committee, with and without the presence of management, to discuss any appropriate matters.
Financial reporting governance — auditors' access to Audit & Finance Committee · Filed 15/07/2026
•NIKE, Inc. Revenues were $11.2 billion for the first quarter of fiscal 2027 compared to $11.7 billion in the first quarter of fiscal 2026, down 4% on a reported basis and down 5% on a currency-neutral basis.
Fiscal 2027 first-quarter overview — total revenue decline · Filed 02/10/2026
Demand creation expense increased 5% primarily due to higher brand marketing expense, reflecting higher investment in key sports events.
Fiscal 2027 first-quarter expenses — increased brand marketing investment · Filed 02/10/2026
NIKE Brand Digital sales were $2.3 billion for the third quarter of fiscal 2026 compared to $2.5 billion for the third quarter of fiscal 2025, with declines primarily due to reduced traffic.
Fiscal 2026 third-quarter operating results — digital decline attributed to reduced traffic · Filed 01/04/2026
However, lead times for many of our products make it more difficult for us to respond rapidly to new or changing product trends or consumer preferences.
Risk factors — product lead times constrain response to consumer preferences · Filed 15/07/2026
