Nike just reported its fiscal Q3 2025 results, and the numbers are brutal. The company is struggling with declining revenue, shrinking margins, and a collapsing stock price. Investors are clearly not impressed, and the stock has taken a massive hit, dropping to levels last seen in 2015!

Key Financial Highlights

Revenue: $11.3B (-9% Y/Y) but beat estimates by $240M

GAAP EPS: $0.54 (beat by $0.26)

Inventory: $7.5B (-2% Y/Y)

Wholesale Revenue: $6.2B (-7% Y/Y)

Direct Revenue: $4.7B (-12% Y/Y)

Nike's stock price has taken a nosedive following these results, trading at levels last seen in 2015! The market clearly hates this report, with shares tumbling to $66.12 as investors flee.

Why Is Nike Struggling?

1. Revenue Decline Across the Board

Direct revenue down 12% due to a 15% decline in NIKE Brand Digital sales.Wholesale revenue dropped 7% Y/Y and China sales tanked 17%, much worse than Q2’s -8%.

2. Gross Margins Under Pressure

Margins fell 330 basis points to 41.5%, hit by higher discounts and rising product costs.

3. Increased Marketing Spend, But No Impact!

Nike spent 8% more on marketing ($1.1B), yet sales still declined.Investors question if this spending is inefficient and ineffective.

Nike’s Response – CEO’s Optimism Amid Chaos

Despite the disappointing results, CEO Elliott Hill insists the company is on the "right path." Investors aren't buying it, given the stock price action.Nike is also guiding for Q4 revenues to decline in the mid-teens, suggesting things might get worse before they get better.

Nike's Q3 was ugly, and the outlook for Q4 isn't any better. With sales declining, margins shrinking, and China demand collapsing, the brand faces serious headwinds.