Nike Inc (NKE)
Interest coverage
| 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 |
| Interest expense (ttm) | US$ in thousands | 182,000 | 160,000 | 194,000 | 149,000 | 108,000 | 133,000 | 146,000 | 140,000 | 119,000 | 134,000 | 122,000 | 161,000 | 205,000 | 228,000 | 239,000 | 254,000 | 262,000 | 249,000 | 197,000 | 139,000 |
| Interest coverage | 18.58 | 30.79 | 28.22 | 39.70 | 58.44 | 45.01 | 41.52 | 41.60 | 49.71 | 45.99 | 52.29 | 38.80 | 32.56 | 31.23 | 30.00 | 28.72 | 26.48 | 16.81 | 18.77 | 24.01 |
May 31, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,381,000K ÷ $182,000K
= 18.58
The interest coverage ratios for Nike Inc. over the specified periods demonstrate a generally strong capacity to meet interest obligations, with ratios well above the typical threshold considered sufficient (generally 3 or higher). Throughout the observed timeline, the ratios exhibit notable fluctuations indicative of varying operational conditions and financial strategies.
From August 2020 to November 2021, the ratios remained relatively high and stable, ranging from approximately 16.81 to 30.00, reflecting robust earnings relative to interest expenses. The peak within this interval occurred on November 30, 2021, with a ratio of 30.00, signaling particularly strong earnings capacity to cover interest obligations at that time.
Between November 2021 and May 2023, there was a consistent upward trend in interest coverage, with ratios rising from 30.00 to a peak of 58.44 on May 31, 2024. This increasing trend indicates an improvement in earnings relative to interest expenses, potentially driven by enhanced profitability or deleveraging strategies.
However, a decline is observable thereafter. From May 2024, the ratios decrease sharply to 39.70 by August 2024 and further to 28.22 by November 2024. Such reductions may suggest softer earnings or increased interest expenses affecting Nike’s ability to comfortably cover interest costs. The most recent figures show a slight recovery with ratios of 30.79 on February 28, 2025, but this remains significantly lower than the peak levels in previous years.
Overall, Nike Inc.’s interest coverage ratios portray a company with historically strong interest coverage, capable of meeting obligations comfortably during most periods. The recent downward trend warrants continued monitoring to assess whether this reflects temporary fluctuations or emerging financial pressures. Despite the fluctuations, the ratios remain above typical concern thresholds, indicating an overall prudent interest coverage profile over the noted periods.
Peer comparison
May 31, 2025