Nike Inc (NKE)
Return on total capital
| May 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,381,000 | 4,927,000 | 5,475,000 | 5,916,000 | 6,311,000 | 5,986,000 | 6,062,000 | 5,824,000 | 5,915,000 | 6,162,000 | 6,379,000 | 6,246,000 | 6,675,000 | 7,120,000 | 7,169,000 | 7,295,000 | 6,937,000 | 4,186,000 | 3,698,000 | 3,338,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 13,213,000 | 14,007,000 | 14,037,000 | 13,944,000 | 14,430,000 | 14,226,000 | 14,146,000 | 13,971,000 | 14,004,000 | 14,531,000 | 15,272,000 | 15,822,000 | 15,281,000 | 14,809,000 | 14,924,000 | 14,343,000 | 12,767,000 | 11,931,000 | 10,640,000 | 9,224,000 |
| Return on total capital | 25.59% | 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% |
May 31, 2025 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $3,381,000K ÷ ($—K + $13,213,000K)
= 25.59%
The analysis of Nike Inc.'s return on total capital (ROTC) over the specified periods indicates a generally high level of operational efficiency and effective use of total capital employed. Throughout the reporting periods from August 31, 2020, to May 31, 2025, the ROTC consistently remained well above the 25% threshold, reflecting the company's ability to generate substantial profits relative to its total capital base.
During the initial period in August 2020, Nike Inc. exhibited a ROTC of approximately 36.19%, showcasing strong profitability amid the early stages of the COVID-19 pandemic. This level of return, although slightly decreased, persisted into late 2020 and early 2021, with values oscillating around the mid-30% range. Notably, a substantial increase was observed by May 2021, when the ROTC rose sharply to approximately 54.34%, indicating a significant improvement in how effectively the company was utilizing its capital during this period.
Subsequent periods saw the ROTC stabilize at elevated levels, generally ranging between approximately 39% and 50%. From August 2021 through early 2023, the figure fluctuated within this range, reflecting consistent operational performance and capital efficiency. The peak around May 2021 is notable, but the overall stability suggests that Nike continued to maintain a high degree of return on its total capital.
From mid-2023 onward, a downward trend becomes apparent. The ROTC dips from over 42% in November 2023 to roughly 39% in November 2024, indicating a slight decline in profitability relative to total capital. This could be attributable to increased investments, shifts in profit margins, or broader economic factors impacting profitability.
Looking ahead into 2025, the ROTC declines further, reaching approximately 25.59% in May and descending to approximately 35.18% in February. These decreases suggest a potential reduction in efficiency or profitability margins, possibly reflecting changes in market conditions, strategic adjustments, or increased capital deployment that has yet to translate into proportionate earnings.
Overall, Nike Inc.'s return on total capital has historically demonstrated strong profitability and operational efficiency, with notable peaks during the 2021 period. The recent declining trend indicates a need for further analysis to understand whether this reflects strategic shifts, market challenges, or normalization after previous periods of exceptionally high returns. Nonetheless, the company's ROTC remains at levels indicative of effective capital utilization relative to industry standards.
Peer comparison
May 31, 2025