NIKE, Inc. (NKE) Business Profile

What it does

NIKE is a Beaverton-based consumer-products company founded in 1964 and led by President and Chief Executive Officer Elliott Hill. It designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide.

Its consumer brands are NIKE, Jordan and Converse. NIKE footwear and apparel are designed mainly for sport, although much of the range is also worn casually. Jordan sells athletic and casual footwear, apparel and accessories centered on sport performance and streetwear. Converse sells casual sneakers, apparel and accessories.

The company also sells performance equipment and accessories, from bags, socks and sports balls to protective equipment, and provides consumer experiences including sporting events, fitness and activity apps, sport and wellness content, and digital features in stores. It develops products with internal specialists and with input from athletes, coaches, trainers, physicians and other advisers; athletes also wear-test products.

NIKE sells through its own stores and digital platforms as well as wholesale accounts, independent distributors, licensees and sales representatives in nearly all countries. It has approximately 73,000 employees worldwide, including retail and part-time employees.

How it makes money

NIKE earns revenue by selling branded footwear, apparel and equipment through two routes. NIKE Direct includes company-owned retail stores and digital commerce platforms. Wholesale includes retailers, independent distributors, licensees and sales representatives. License agreements also allow unaffiliated parties to manufacture and sell certain apparel, digital devices, applications and sports equipment using NIKE-owned trademarks.

The NIKE Brand is organized geographically across North America, EMEA, Greater China and APLA; those segments include NIKE and Jordan results. Converse is a separate reportable segment. Footwear is the largest NIKE Brand product line, alongside apparel and equipment. Product collections can combine footwear, apparel and accessories for a shared use case.

Pricing and mix are shaped by product mix, channel mix, strategic pricing and discounts. The company is repositioning NIKE Brand Digital as a full-price platform, reducing supply of selected footwear, liquidating inventory through markdowns and working with wholesale partners to reduce inventory and create capacity for new products. Management said the company is deliberately reducing the volume and launch frequency of selected Jordan retro styles.

Fiscal 2026 revenue was $46.4 billion; fiscal Q1 2027 revenue was $11.2 billion. NIKE Direct revenue was $17.7 billion in fiscal 2026, while NIKE Brand wholesale revenue was $27.5 billion. In fiscal Q1 2027, NIKE Direct revenue was $4.1 billion and fell 8%; Converse revenue fell 28%.

Customers and how it sells

NIKE serves consumers directly and through wholesale customers. Its U.S. wholesale accounts include footwear stores, sporting-goods stores, athletic-specialty stores, department stores, skate, tennis and golf shops, plus other retailers. Internationally, wholesale customers include independent distributors, licensees and sales representatives.

No customer accounted for 10% or more of consolidated revenue in fiscal 2026. In the United States, the three largest customers represented approximately 29% of U.S. sales. Outside the United States, the three largest customers represented approximately 16% of non-U.S. sales.

The United States accounted for approximately 44% of fiscal 2026 revenue, leaving approximately 56% from non-U.S. markets. NIKE Brand operating segments are North America, EMEA, Greater China and APLA. NIKE and Converse operated 347 U.S. stores and 641 stores outside the U.S., while company-owned digital commerce platforms operated in over 40 countries.

Greater China is currently being reshaped around official NIKE flagship storefronts on Tmall, JD and Doyen, alongside Nike.com and the Nike app. Management said it is removing distribution through channels not aligned with its marketplace strategy. Greater China revenue declined 26% in fiscal Q1 2027.

Suppliers and costs

Nearly all NIKE footwear and apparel is made outside the United States by independent contract manufacturers. As of May 31, 2026, 95 finished-goods footwear factories operated in 11 countries and 321 finished-goods apparel factories operated in 34 countries. Vietnam, Indonesia and China made approximately 52%, 27% and 16% of NIKE Brand footwear, respectively; Vietnam, Cambodia and China made approximately 34%, 15% and 12% of apparel.

Supplier concentration is material. Four footwear contract manufacturers made approximately 60% of NIKE Brand footwear production, while the top six apparel manufacturers made approximately 54% of apparel production. Contract manufacturers buy principal materials, supported by 205 strategic Tier 2 suppliers. Air Manufacturing Innovation and contract manufacturers in China and Vietnam supply NIKE Air-Sole and other cushioning components.

Costs include materials, labor, energy, freight, tariffs, discounts, marketing and endorsement commitments. The company says higher input costs, lower revenue and discounts pressure profitability. As of May 31, 2026, product purchase obligations were approximately $4.9 billion, including approximately $4.7 billion due within 12 months.

Competitive position

NIKE competes worldwide in athletic and leisure footwear, apparel, equipment, digital commerce, digital services and consumer experiences. Named competitors include adidas, Anta, ASICS, Deckers, Li Ning, lululemon athletica, New Balance, On, Puma, Under Armour and V.F. Corporation. It also competes with private-label brands, major retailers, multi-brand retailers, digital commerce platforms and other companies for contract-manufacturing capacity and raw materials.

Competition centers on product quality, innovation, performance, reliability, design and price/value; consumer connection and marketing; athlete, team and league relationships; digital experiences; sourcing; and retail presentation. The company identifies continuing technological change, including AI and machine learning, as a competitive factor. It also says new footwear and apparel companies can enter with lower barriers and may react more nimbly to shifts in consumer preferences.

Our reading: NIKE’s brand and intellectual-property position is a meaningful moat because its NIKE and Swoosh Design trademarks are registered in over 190 jurisdictions and its marks, patents, copyrights and trade secrets support product identification and protection. Its effectiveness still depends on continuing product, design and marketing execution. (item1)

Our reading: Global direct and wholesale distribution is another moat source: NIKE reaches nearly all countries through its own digital and retail operations plus wholesale partners. It is less durable where consumer preferences, retail traffic or channel economics change rapidly. (item1; item1a)

Growth opportunities

NIKE’s stated long-term approach is to lead with sport, create innovative products, deepen consumer connections and improve consumer experiences across digital platforms and retail. Management said the performance business reached $16.0 billion in fiscal 2026 and grew by high single digits in fiscal Q1 2027. In that quarter, running, global football, tennis and golf grew at double-digit rates, while training grew globally and basketball grew at double-digit rates in North America.

Product development is a growth lever across running, training, football, basketball, tennis and golf. Management introduced Pegasus Plus 2, Alpha Fly 4, Swoosh Fly and Nike Apex in running. It also said women’s basketball signature revenue grew nearly 500% from fiscal 2022 to fiscal 2026. The company is using sport partnerships and local activations to connect product, marketing and retail experiences.

The company is also resetting Sportswear, Jordan and Greater China. It expects its Greater China digital cleanup to take multiple seasons, with near-term pressure on revenue and profitability. For fiscal 2027, the company expects revenue to decline in the high single-digit range and adjusted earnings per share of $1.15 to $1.35, excluding approximately $0.15 of PACE program impact.

PACE is intended to make the supply chain more flexible, move resources closer to local markets, simplify decision-making and reshape the workforce. The company expects approximately $2.5 billion in savings, with most savings in fiscal 2029 and 2030 and full realization continuing into fiscal 2031; implementation costs are expected to be approximately $1 billion over the program’s life.

Structural risks

• Consumer demand is discretionary. Weaker spending can reduce demand, raise inventories, reduce retailer orders, increase cancellations and returns, require deeper discounts and lower gross margin.

• Product demand depends on changing sports participation, design trends and consumer preferences. NIKE must identify trends, develop new products and adjust product and channel mix in time; rapid technology change and new entrants raise this risk.

• Greater China, Sportswear, Jordan and Converse are being reset. Greater China revenue declined 26% in fiscal Q1 2027, and the company expects its digital cleanup there to take multiple seasons and to pressure revenue and profitability in the near term.

• The supply chain depends on contract manufacturers, materials availability and international trade. Tariffs, import duties, geopolitical conditions, currency movements, commodity prices, freight costs and supplier financing can raise costs or disrupt supply.

• Brand image and consumer trust depend on product innovation, quality, marketing, digital media and the conduct of suppliers, endorsers and partners. Negative publicity, including through social media, can damage demand and brand image.

• The company faces information-technology, consumer-data-security, climate and extreme-weather risks across global stores, suppliers, manufacturers, distribution centers and digital operations.

Bottom line

Our reading

Our reading: NIKE is a global branded athletic-footwear, apparel and equipment business built on direct and wholesale distribution, contract manufacturing, product development and marketing-led consumer demand. Its performance portfolio is growing, but Sportswear, Jordan, Converse and Greater China are weighing on current results as the company reduces supply, resets channels and works through inventory. (item1; item7; call_prepared)

Our reading: The business’s central trade-off is near-term revenue and margin pressure from those resets against the company’s effort to restore full-price realization, simplify operations and invest in sport-led product innovation. PACE provides a stated cost-saving program, but its largest expected savings are several fiscal years away. (call_prepared; call_qa)