Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Nike Inc., profitability ratios
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).
The profitability trajectory over the analyzed six-year period is characterized by a general decline in efficiency and returns, with a particularly sharp contraction occurring between 2024 and 2025.
- Profit Margins
- Gross profit margin exhibited relative stability, fluctuating within a narrow range from a peak of 45.98% in 2022 to a low of 42.73% in 2025. However, a significant divergence is evident when comparing gross margins to operating and net margins. The operating profit margin decreased from 15.58% in 2021 to 8.18% by 2026, while the net profit margin fell from 12.86% in 2021 to 6.70% in 2026. This suggests that while the direct cost of goods sold remained relatively stable, operating expenses increased disproportionately relative to revenue, compressing bottom-line profitability.
- Returns on Capital and Assets
- A substantial erosion in return metrics is observed throughout the period. Return on Equity (ROE) experienced a marked decline, falling from 44.86% in 2021 to 20.91% in 2026. This downward trend is mirrored in the Return on Assets (ROA), which decreased from 15.17% in 2021 to 8.09% in 2026. The most pronounced drop in both metrics occurred between 2024 and 2025, indicating a significant reduction in the company's ability to generate profit from its asset base and shareholder investments.
- Overall Trend Analysis
- The data reveals a pattern of deteriorating operational efficiency. While the period between 2021 and 2024 showed moderate volatility and some recovery in 2024, the 2025 and 2026 periods mark a clear shift toward lower profitability. The synchronized decline across operating margins, ROE, and ROA suggests a systemic compression of earnings that exceeds the minor fluctuations seen in the gross profit margin.
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Return on Sales
Return on Investment
Gross Profit Margin
Nike Inc., gross profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 19,911) | 19,790) | 22,887) | 22,292) | 21,479) | 19,962) | |
| Revenues | 46,398) | 46,309) | 51,362) | 51,217) | 46,710) | 44,538) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 42.91% | 42.73% | 44.56% | 43.52% | 45.98% | 44.82% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| lululemon athletica inc. | 56.60% | 59.22% | 58.31% | 55.39% | 57.68% | 55.98% | |
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).
1 2026 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 19,911 ÷ 46,398 = 42.91%
2 Click competitor name to see calculations.
The analysis of profitability indicates a period of expansion and peak performance followed by a notable contraction and subsequent stabilization. From May 2021 through May 2024, there was a consistent upward trajectory in total revenues and gross profit. However, a significant decline occurred in the 2025 fiscal year, with figures stabilizing in the 2026 period.
- Revenue and Gross Profit Trends
- Revenues grew steadily from 44,538 million in May 2021 to a peak of 51,362 million in May 2024. Gross profit followed a similar growth pattern, rising from 19,962 million to a high of 22,887 million during the same timeframe. A sharp reversal is observed in May 2025, where revenues fell to 46,309 million and gross profit dropped to 19,790 million. By May 2026, these figures remained relatively stagnant, with revenues at 46,398 million and gross profit at 19,911 million.
- Gross Profit Margin Analysis
- The gross profit margin exhibited volatility over the six-year period. The margin peaked in May 2022 at 45.98%, before declining to 43.52% in 2023. A partial recovery was noted in May 2024, with the margin rising to 44.56%. The most significant compression occurred in May 2025, when the margin reached its lowest point of 42.73%, reflecting a decrease in production efficiency or increased cost of sales. A slight recovery to 42.91% was observed in May 2026.
- Profitability Correlation
- A strong correlation is evident between revenue growth and gross profit absolute values, particularly during the 2021-2024 expansion. However, the fluctuation in the gross profit margin suggests that revenue growth did not always translate to proportional efficiency gains. The simultaneous drop in both revenue and margin in 2025 indicates a dual challenge of declining demand and weakened cost management, which appears to have reached a plateau by 2026.
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Operating Profit Margin
Nike Inc., operating profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 3,797) | 3,702) | 6,311) | 5,915) | 6,675) | 6,937) | |
| Revenues | 46,398) | 46,309) | 51,362) | 51,217) | 46,710) | 44,538) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 8.18% | 7.99% | 12.29% | 11.55% | 14.29% | 15.58% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| lululemon athletica inc. | 19.91% | 23.67% | 22.17% | 16.38% | 21.31% | 18.63% | |
| Operating Profit Margin, Sector | |||||||
| Consumer Durables & Apparel | — | 10.91% | 13.85% | 12.21% | 15.12% | 15.85% | |
| Operating Profit Margin, Industry | |||||||
| Consumer Discretionary | — | 9.27% | 10.96% | 9.02% | 8.35% | 8.71% | |
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).
1 2026 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × 3,797 ÷ 46,398 = 8.18%
2 Click competitor name to see calculations.
The financial performance over the analyzed six-year period is characterized by a systemic decline in operating efficiency, culminating in a significant contraction of profitability by 2025 and 2026.
- Revenue Trajectory
- Revenues exhibited an upward trend from May 31, 2021, to May 31, 2024, peaking at 51,362 million US$. However, a reversal occurred in 2025, with revenues dropping to 46,309 million US$ and remaining virtually stagnant through May 31, 2026.
- Operating Income Performance
- Operating income demonstrated a general downward trajectory, decreasing from 6,937 million US$ in 2021 to 3,797 million US$ in 2026. A critical decline is observed between 2024 and 2025, where operating income fell by approximately 41%, a decrease that significantly outpaced the contraction in revenue for that same period.
- Operating Profit Margin Analysis
- The operating profit margin reflects a consistent erosion of profitability. The margin decreased from a high of 15.58% in 2021 to 11.55% in 2023. Although a marginal recovery to 12.29% was recorded in 2024, the margin collapsed to 7.99% by 2025 and reached 8.18% in 2026. This pattern indicates that operating expenses have increased relative to sales, severely impacting the conversion of revenue into operating profit.
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Net Profit Margin
Nike Inc., net profit margin calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 3,108) | 3,219) | 5,700) | 5,070) | 6,046) | 5,727) | |
| Revenues | 46,398) | 46,309) | 51,362) | 51,217) | 46,710) | 44,538) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 6.70% | 6.95% | 11.10% | 9.90% | 12.94% | 12.86% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| lululemon athletica inc. | 14.22% | 17.14% | 16.12% | 10.54% | 15.59% | 13.38% | |
| Net Profit Margin, Sector | |||||||
| Consumer Durables & Apparel | — | 8.85% | 11.89% | 9.99% | 13.26% | 12.91% | |
| Net Profit Margin, Industry | |||||||
| Consumer Discretionary | — | 7.84% | 8.69% | 7.84% | 5.02% | 9.12% | |
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).
1 2026 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 3,108 ÷ 46,398 = 6.70%
2 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 is characterized by an initial period of stability followed by a significant deterioration in overall profitability. While revenues grew during the first few years of the period, net income and net profit margins exhibited a marked downward trend, with a sharp contraction occurring in the final two fiscal years.
- Revenue Performance
- Revenues increased steadily from 44,538 million USD in 2021 to a peak of 51,362 million USD in 2024. This growth phase was followed by a contraction in 2025, where revenues fell to 46,309 million USD, remaining nearly stagnant at 46,398 million USD in 2026.
- Net Income Trends
- Net income reached a peak of 6,046 million USD in 2022. Following a period of volatility and a partial recovery to 5,700 million USD in 2024, a substantial decline was observed in 2025, with net income dropping to 3,219 million USD. This downward movement continued into 2026, ending at 3,108 million USD.
- Net Profit Margin Analysis
- The net profit margin demonstrates a clear long-term decline. The ratio peaked at 12.94% in 2022 before falling to 9.90% in 2023. A moderate recovery to 11.10% occurred in 2024, but this was followed by a steep drop to 6.95% in 2025 and a further decrease to 6.70% in 2026. This indicates that the cost of generating revenue increased significantly or pricing power diminished over the analyzed period.
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Return on Equity (ROE)
Nike Inc., ROE calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 3,108) | 3,219) | 5,700) | 5,070) | 6,046) | 5,727) | |
| Shareholders’ equity | 14,865) | 13,213) | 14,430) | 14,004) | 15,281) | 12,767) | |
| Profitability Ratio | |||||||
| ROE1 | 20.91% | 24.36% | 39.50% | 36.20% | 39.57% | 44.86% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| lululemon athletica inc. | 31.83% | 41.97% | 36.63% | 27.15% | 35.60% | 23.02% | |
| ROE, Sector | |||||||
| Consumer Durables & Apparel | — | 28.70% | 38.85% | 34.54% | 38.96% | 41.21% | |
| ROE, Industry | |||||||
| Consumer Discretionary | — | 20.91% | 27.93% | 29.93% | 20.78% | 33.71% | |
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).
1 2026 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 3,108 ÷ 14,865 = 20.91%
2 Click competitor name to see calculations.
An analysis of the financial performance from May 2021 to May 2026 reveals a general downward trajectory in Return on Equity (ROE), indicating a reduction in the efficiency with which shareholder capital is utilized to generate profits.
- Net Income Performance
- Net income demonstrated relative stability between 2021 and 2024, peaking at 6,046 million US$ in 2022. However, a significant contraction is observed in the final two years of the period, with earnings falling to 3,219 million US$ in 2025 and further declining to 3,108 million US$ in 2026. This substantial decrease in profitability is the primary catalyst for the decline in ROE.
- Shareholders' Equity Dynamics
- Shareholders' equity experienced fluctuations throughout the period, rising from 12,767 million US$ in 2021 to a peak of 15,281 million US$ in 2022. Following a period of volatility, equity increased to 14,865 million US$ by May 2026. The simultaneous increase in the equity base and the decrease in net income during the 2025-2026 period intensified the downward pressure on the return ratio.
- Return on Equity (ROE) Trends
- The ROE declined from a high of 44.86% in 2021 to 20.91% in 2026. While a brief recovery to 39.50% occurred in 2024, the metric saw a sharp depreciation in 2025 to 24.36%, continuing its descent into 2026. This trend reflects a systemic weakening in the company's ability to convert equity investments into net earnings over the observed six-year window.
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Return on Assets (ROA)
Nike Inc., ROA calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 3,108) | 3,219) | 5,700) | 5,070) | 6,046) | 5,727) | |
| Total assets | 38,410) | 36,579) | 38,110) | 37,531) | 40,321) | 37,740) | |
| Profitability Ratio | |||||||
| ROA1 | 8.09% | 8.80% | 14.96% | 13.51% | 14.99% | 15.17% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| lululemon athletica inc. | 18.67% | 23.87% | 21.86% | 15.25% | 19.73% | 14.07% | |
| ROA, Sector | |||||||
| Consumer Durables & Apparel | — | 11.39% | 16.04% | 13.73% | 15.51% | 15.06% | |
| ROA, Industry | |||||||
| Consumer Discretionary | — | 6.71% | 8.12% | 7.57% | 4.81% | 7.99% | |
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).
1 2026 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 3,108 ÷ 38,410 = 8.09%
2 Click competitor name to see calculations.
An analysis of profitability reveals a period of relative stability in asset efficiency followed by a significant contraction. Between 2021 and 2024, the organization maintained a consistent ability to generate earnings relative to its asset base, though a sharp downturn is evident in the final two fiscal years of the observed period.
- Return on Assets (ROA) Trend
- The ROA remained resilient from 2021 to 2024, fluctuating within a narrow range between 13.51% and 15.17%. A substantial decline occurred in 2025, where the ratio dropped to 8.80%, further decreasing to 8.09% by 2026. This represents a near-halving of asset efficiency over a two-year window.
- Net Income Volatility
- The erosion of the ROA is primarily driven by a marked decrease in net income. After reaching a peak of 6,046 million US$ in 2022 and recovering to 5,700 million US$ in 2024, net income fell precipitously to 3,219 million US$ in 2025 and 3,108 million US$ in 2026. This downward trajectory in earnings is the primary catalyst for the declining profitability ratios.
- Asset Base Relationship
- Total assets remained relatively stable throughout the period, fluctuating between 36,579 million US$ and 40,321 million US$. Because the asset base did not contract in alignment with the reduction in net income, the company experienced a diminished return on every dollar of assets employed, leading to the observed compression in ROA.
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