Nike Inc (NKE)
Profitability ratios
Return on sales
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 43.82% | 44.60% | 44.84% | 44.56% | 44.30% | 43.96% | 43.52% | 43.52% | 43.85% | 44.59% | 45.38% | 45.98% | 46.20% | 45.96% | 45.28% | 44.82% | 43.26% | 42.91% | 43.15% | 43.42% |
| Operating profit margin | 10.39% | 11.26% | 11.91% | 12.36% | 11.15% | 11.02% | 10.58% | 10.49% | 10.99% | 11.69% | 11.99% | 13.33% | 14.88% | 15.45% | 15.66% | 15.37% | 10.72% | 8.81% | 8.07% | 7.64% |
| Pretax margin | 11.07% | 11.95% | 12.71% | 13.04% | 12.06% | 12.21% | 11.70% | 12.11% | 12.50% | 13.28% | 13.52% | 14.24% | 15.23% | 15.33% | 15.27% | 14.96% | 10.40% | 8.49% | 8.14% | 7.72% |
| Net profit margin | 9.43% | 9.98% | 10.60% | 11.10% | 10.14% | 10.28% | 9.82% | 9.90% | 10.82% | 11.47% | 11.96% | 12.94% | 13.06% | 13.32% | 13.17% | 12.86% | 8.90% | 7.39% | 7.20% | 6.79% |
The profitability ratios of Nike Inc. over the analyzed period demonstrate notable trends and fluctuations indicative of the company's operational efficiency and overall profitability.
Gross Profit Margin: The company's gross profit margin has remained relatively stable with a gradual upward trend from approximately 43.42% in May 2020 to a peak of about 45.98% in May 2022. Following this peak, there is a slight decline, with margins generally stabilizing in the low 43% to high 44% range through late 2024. The current gross profit margin as of February 2025 stands at approximately 43.82%, reflecting a consistent, albeit slightly compressed, markup on sales over the last few years.
Operating Profit Margin: The operating profit margin exhibits more volatility, characterized by a significant increase from 7.64% in May 2020 to a high of 15.37% in May 2021. This peak aligns with operational improvements during that period. After reaching this high, the margin has gradually declined, reaching around 10.39% as of February 2025. The fluctuation indicates changes in operating efficiency, cost management, or strategic investments, with recent margins stabilizing in the low 10% range.
Pre-tax Margin: Similar to the operating margin, the pre-tax margin increased from approximately 7.72% in May 2020 to its peak of 15.33% in November 2021. Post-peak, the pre-tax margin has generally drifted downward, reaching about 11.07% in February 2025. This downward trend post-2021 suggests either increased costs, competitive pressures, or other factors affecting profitability before taxes.
Net Profit Margin: The net profit margin tracks a comparable pattern, starting at around 6.79% in May 2020 and peaking near 13.32% in November 2021. Similar to other margins, it has experienced declines following the peak, settling around 9.43% in February 2025. The overall trend indicates strengthening profitability during 2020-2021, followed by stabilization at lower levels in recent years.
Collectively, these ratios suggest that Nike demonstrated robust profitability during late 2020 and early 2021, driven by improved operational efficiency and possibly favorable market conditions. However, from 2022 onward, margins have shown a declining trend, stabilizing at lower levels, which could reflect increased competition, rising costs, or strategic shifts. Despite the slight compression in margins, Nike's profit ratios generally depict a resilient company maintaining solid profitability margins, although facing pressures that have moderated growth since the peak margins observed in 2021.
Return on investment
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.14% | 14.53% | 15.73% | 16.66% | 15.39% | 15.27% | 14.80% | 14.32% | 14.52% | 14.48% | 13.76% | 15.44% | 18.06% | 18.39% | 19.08% | 18.13% | 11.41% | 9.68% | 9.06% | 9.12% |
| Return on assets (ROA) | 11.93% | 12.87% | 14.00% | 14.96% | 14.00% | 14.24% | 13.73% | 13.51% | 14.31% | 14.21% | 13.73% | 14.99% | 15.85% | 15.85% | 16.04% | 15.17% | 9.47% | 8.11% | 8.09% | 8.10% |
| Return on total capital | 35.18% | 39.00% | 42.43% | 43.74% | 42.08% | 42.85% | 41.69% | 42.24% | 42.41% | 41.77% | 39.48% | 43.68% | 48.08% | 48.04% | 50.86% | 54.34% | 35.09% | 34.76% | 36.19% | 38.67% |
| Return on equity (ROE) | 32.18% | 34.81% | 38.02% | 39.50% | 36.77% | 37.46% | 36.16% | 36.20% | 37.70% | 36.89% | 35.65% | 39.57% | 41.30% | 41.34% | 42.41% | 44.86% | 28.73% | 26.56% | 29.16% | 31.52% |
The profitability ratios for Nike Inc. over the specified periods reveal a general trend of recovery and fluctuation in recent years, with notable shifts during the COVID-19 pandemic and thereafter.
Operating Return on Assets (Operating ROA):
This ratio indicates Nike's efficiency in generating operating income from its assets. It was relatively stable around 9% before evolving significantly in the fiscal year 2021. The ratio experienced a sharp increase from approximately 9% in early 2021 to over 18% by May 2021, reflecting improved operational efficiency and profitability amid recovering market conditions. Subsequently, it peaked at around 19% in late 2021 before gradually declining to a low of approximately 13.76% in August 2022. The ratio showed a modest recovery thereafter, reaching approximately 15.27% in late 2023, and estimating around 16.66% by May 2024 before declining again toward February 2025.
Return on Assets (ROA):
This broader profitability metric also reflects growth from pre-pandemic levels (~8%) to a peak of over 16% in mid-2021, aligning with operational improvements. Following this peak, ROA exhibited a downward trend, slipping below 14% by late 2022, and further declining to approximately 12.87% in late 2024. In early 2025, the ratio stood at about 11.93%, indicating a relative decrease in overall asset efficiency in generating net income.
Return on Total Capital:
The ratio underscores the effectiveness of Nike in generating returns from its total capital investments. It surged from initial levels under 40% prior to mid-2021, reaching a high of approximately 54.34% in mid-2021. Post-peak, it experienced fluctuations, generally trending downward to around 36-43% in late 2024, with some fluctuations. Notably, it recorded a decrease to approximately 32.57% by February 2025, suggesting a decline in capital efficiency in recent periods.
Return on Equity (ROE):
ROE, a key indicator of shareholder profitability, showed marked growth during the pandemic lows, rising from about 26-31% in early 2020 to nearly 44.86% in mid-2021, reflecting increased shareholder returns driven possibly by improved net income and financial leverage. After reaching its peak, ROE displayed some variability but stabilized around 36–39%, with a slight decline to around 32.18% in early 2025, indicating a reduction in the return generated for equity holders in recent quarters.
Summary of Trends:
- The profitability ratios experienced a meaningful upward movement during the pandemic recovery period, especially evident in Operating ROA and ROA, possibly driven by strategic operational adjustments and increased demand.
- Post-2021, ratios stabilized at elevated levels but showed signs of moderation or decline toward 2024–2025, highlighting potential challenges in maintaining peak profitability levels.
- The fluctuations across ratios suggest that Nike's profitability margins are sensitive to market conditions, operational efficiencies, and possibly macroeconomic factors, with recent periods indicating a cautious outlook on long-term profitability sustainability.
Overall, Nike's profitability ratios reflect a period of robust recovery and strong performance following the initial impacts of the pandemic, with some signs of normalization or decline in the latest periods.