Stock Analysis on Net
Stock Analysis on Net

Nike Inc. (NYSE:NKE)

Common-Size Income Statement

Nike Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: May 31, 2026 May 31, 2025 May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021
Revenues 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -57.09 -57.27 -55.44 -56.48 -54.02 -55.18
Gross profit 42.91% 42.73% 44.56% 43.52% 45.98% 44.82%
Demand creation expense -10.25 -10.13 -8.34 -7.93 -8.24 -6.99
Operating overhead expense -24.48 -24.62 -23.93 -24.05 -23.45 -22.25
Selling and administrative expense -34.73% -34.74% -32.27% -31.98% -31.69% -29.24%
Operating income 8.18% 7.99% 12.29% 11.55% 14.29% 15.58%
Interest income 0.60 0.87 0.84 0.58 0.20 0.08
Interest expense -0.49 -0.64 -0.52 -0.57 -0.64 -0.66
Interest income (expense), net 0.11% 0.23% 0.31% 0.01% -0.44% -0.59%
Other income (expense), net 0.11 0.16 0.44 0.55 0.39 -0.03
Income before income taxes 8.41% 8.39% 13.04% 12.11% 14.24% 14.96%
Income tax expense -1.71 -1.44 -1.95 -2.21 -1.30 -2.10
Net income 6.70% 6.95% 11.10% 9.90% 12.94% 12.86%

Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).

An analysis of the common-size income statement reveals a significant contraction in overall profitability margins over the observed period. Net income as a percentage of revenues declined from 12.86% in 2021 to 6.70% by 2026, indicating a steady erosion of the bottom line relative to total revenues.

Gross Margin Performance
Gross profit margins experienced a gradual downward trend, decreasing from 44.82% in 2021 to 42.91% in 2026. This contraction is driven by an increase in the cost of sales, which rose from 55.18% to 57.09% of revenues, suggesting rising production costs or pricing pressures.
Operating Expense Analysis
A substantial increase in operating expenditures is observed, primarily driven by selling and administrative expenses. These costs rose from 29.24% of revenues in 2021 to 34.73% in 2026. Specifically, demand creation expenses showed a marked increase, climbing from 6.99% to 10.25%, while operating overhead expenses rose from 22.25% to 24.48%.
Operating Income Compression
The combined impact of declining gross margins and rising operating expenses led to a significant compression of operating income. The operating margin fell from 15.58% in 2021 to 8.18% in 2026. The most acute drop occurred between 2024 and 2025, where operating income fell from 12.29% to 7.99%.
Non-Operating Items and Net Result
A positive trend is noted in net interest positioning, shifting from a net interest expense of -0.59% in 2021 to a net interest income of 0.11% in 2026. This was supported by an increase in interest income, which peaked at 0.87% in 2025. Despite these modest gains in non-operating income, they were insufficient to offset the decline in operating efficiency, resulting in the overall reduction of net income margins.

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