NIKE, Inc. (NKE): Business Model Canvas [Dec-2025 Updated]

You're digging into the engine room of a global giant, and honestly, the latest blueprint for NIKE, Inc.'s Business Model Canvas, based on fiscal year 2025 data, reveals a fascinating strategic pivot you need to see. After years of focusing on Direct-to-Consumer (DTC), the numbers show a clear rebalancing: Wholesale revenue hit $25.9 billion, while NIKE Direct still delivered a massive $18.8 billion-that's a clear signal they value broad market access again while protecting their digital moat. This canvas breaks down exactly how they manage that complex distribution network alongside their core assets, like the Swoosh IP and patented tech, to keep delivering that aspirational lifestyle and elite performance to everyone from pro athletes to the weekend warrior. Dive in below; we've mapped out every building block so you can see the precise mechanics behind their combined $44.7 billion in revenue streams.

NIKE, Inc. (NKE) - Canvas Business Model: Key Partnerships

You're looking at the structure of NIKE, Inc.'s external relationships as of late 2025, right after their fiscal year-end. The numbers tell a clear story about where the focus is shifting, especially given the recent market turbulence.

The investment in marketing and athlete relationships, which falls under Demand Creation Expense, remains a top priority for maintaining cultural relevance. For the fourth quarter of fiscal year 2025, this expense was $1.3 billion, marking a 15 percent increase year-over-year. This spend fuels the high-profile endorsements and league rights that anchor the brand. For the third quarter of fiscal year 2025, Demand Creation Expense was $1.1 billion, up 8 percent. This shows NIKE, Inc. is putting money behind its sport-leading narrative, even as overall revenues contract.

The relationship with Strategic wholesale partners saw a significant recalibration in fiscal year 2025. After years of prioritizing NIKE Direct, the pivot back to wholesale became necessary to meet consumers where they shop. Full-year wholesale revenues for fiscal 2025 were $25.9 billion, representing a 7 percent decline year-over-year. In the fourth quarter of fiscal 2025, wholesale revenue was $6.4 billion, declining 9 percent, which was a smaller drop than the 14 percent decline seen in NIKE Direct revenue for the same period. This dynamic suggests that the established retail footprint remains crucial for volume and reach, even if the strategy is now focused on distribution flexibility rather than pure control.

High-heat collaborations are part of the brand marketing strategy funded by Demand Creation. While specific dollar amounts for collaborations with figures like Travis Scott or brands like Supreme aren't public, the overall strategy is to reinforce cultural relevance. The total NIKE Brand revenue for the third quarter of fiscal 2025 was $10.9 billion, showing the scale these partnerships operate within, despite the overall brand revenue decline of 9 percent reported for that quarter.

The network of Contract manufacturers underpins the entire global supply chain. While specific contractual terms aren't disclosed, the scale of production is vast. For the full fiscal year 2025, the Cost of Revenue was $26.5 billion. This figure reflects the cost associated with the global, scalable production managed through these manufacturing partners.

Here's a snapshot of the key financial metrics that reflect the scale and recent performance of these distribution and marketing partnerships:

The reliance on external channels is clear from the revenue split, but the investment in brand equity is non-negotiable:

• Full year wholesale revenue of $25.9 billion dwarfs the NIKE Direct revenue of $18.8 billion for the same period.
• The latest declared quarterly dividend is $0.41 per share.
• Analyst consensus price target averages $82.24 against a recent trading price near $64.84.
• The company's market capitalization as of December 4, 2025, stood at $97.61B.
• The company is operating with 1.48B shares outstanding.

The focus on Major sports leagues and athlete representation is directly tied to the Demand Creation spend, which was $4.7 billion for the full fiscal year 2024, showing the magnitude of this investment area historically, which is being sustained in 2025.

NIKE, Inc. (NKE) - Canvas Business Model: Key Activities

You're looking at the core engine of NIKE, Inc. right now, and honestly, it's a mix of high-end innovation and heavy-duty cost management, especially with the new trade headwinds. Here's a look at the required activities that keep the whole machine running, grounded in the latest numbers from fiscal 2025.

High-performance product research and development (R&D)

The commitment to innovation remains central, even as the focus shifts to profitability. While the most recent data for the full fiscal year ending May 31, 2025, shows reported R&D expenses as $0B or not meaningfully broken out in the primary summary filings, historical context from the prior 10-K indicated spending around $878 million on R&D. This activity supports the creation of performance-oriented products like the Alphafly 3 racer and the Pegasus running shoe, which the company is betting on to reclaim market share. The strategy is to weave a tale of reinvention through sport-centric identity and revitalized brand discipline. That's the goal, anyway.

Global brand building and demand creation marketing

Brand building is a massive, non-negotiable spend for NIKE, Inc., driving the stories that connect with consumers. For the full fiscal year 2025, the total Demand Creation Expense reached $4.7 billion, marking an increase of 9% over the prior year. Looking closer at the fourth quarter of fiscal 2025, this spend was $1.3 billion, which was up 15% year-over-year, primarily driven by higher sports marketing and brand marketing expense. Even in the third quarter of fiscal 2025, Demand Creation was $1.1 billion, an 8% increase, reflecting investment in key sports events. This spending is crucial to justify the brand's premium positioning, especially as they implement 'surgical price increases' starting in the fall of 2025 to offset other costs.

Managing a complex, multi-channel distribution network

NIKE, Inc. manages a dual distribution strategy, balancing wholesale relationships with its growing Direct-to-Consumer (DTC) push. Full-year NIKE Direct revenues for fiscal 2025 were $18.8 billion, though this represented a 13% decrease year-over-year. This decline was largely due to a 20% drop in NIKE Brand Digital sales, even as sales at NIKE-owned stores were flat for the full year. However, there are bright spots in the physical network; for instance, in the fourth quarter of fiscal 2025, sales at company-operated stores actually increased by 2%. Still, the overall NIKE Direct channel saw a 14% decline in Q4 2025 revenue, hitting $4.4 billion for that quarter. The wholesale channel also saw pressure, with full-year revenues down 7% to $25.9 billion.

Digital platform development (Nike App, SNKRS) and data analytics

The digital pivot is undergoing a significant reset, moving away from volume to full-price transactions. NIKE Brand Digital sales saw a 20% decline for the full fiscal year 2025. The fourth quarter of fiscal 2025 saw the steepest drop, with Nike Digital sales falling 26% year-over-year. This trend continued into the first quarter of fiscal 2026, with Digital sales declining 12% year-over-year. As part of the repositioning, the company is using data analytics to drive better engagement, evidenced by reducing the number of days offering site-wide promotions by more than 50% in North America during Q1 FY2026. The goal is to elevate the brand and improve markdown rates, which showed improvement in Q4 2025.

Supply chain management and tariff mitigation efforts

This is a major near-term focus, as NIKE, Inc. is staring down a significant cost headwind. The company faces an estimated $1 billion increase in costs due to current U.S. tariffs, with the average U.S. customs tax rate on imported footwear sitting in the mid-teens percentage range. To counter this, NIKE is executing a four-part plan, with a major component being supply chain diversification. Currently, roughly 16% of footwear imports come from China, and the company intends to cut this share to the high single-digit range by the close of fiscal 2026. This shift is happening while the full-year fiscal 2025 gross margin stood at 42.7%, down 190 basis points, with the Q4 margin dropping sharply to 40.3%. The company expects the tariff impact to cause a 75 basis point drag on gross margin for the full fiscal year 2026, moderated by these mitigation efforts.

The company returned $5.3 billion to shareholders in fiscal 2025, split between $2.3 billion in dividends and $3.0 billion in share repurchases. Finance: draft 13-week cash view by Friday.

NIKE, Inc. (NKE) - Canvas Business Model: Key Resources

When we look at what truly powers NIKE, Inc., it's not just the factories or the inventory; it's the intangible assets that command premium pricing. These are the bedrock of their competitive moat, you see. Honestly, these resources are what allow them to charge what they charge for a pair of shoes.

The core of this resource base is definitely the brand equity itself. The Swoosh and the Jordan Brand are instantly recognizable globally, which is a massive asset that took decades to build. This recognition translates directly to the balance sheet, even if it's hard to quantify perfectly in the short term. For instance, in 2025, valuation specialists estimated NIKE's brand value to be in the range of $30 to $40 billion. More specifically, one 2025 index placed the brand value at $31.6B. To put that in perspective, another report noted that the brand value was nearly €8 billion less than Chanel's $37.9 billion valuation in the same year, which still places NIKE near the top tier of global apparel brands.

This brand power is continuously reinforced by a deep portfolio of patented technology. They aren't just slapping a logo on a standard shoe; they are engineering performance advantages. Here are some of the key technological assets they hold:

• The Air, Zoom, and Flyknit platforms, which are foundational to their performance lines.
• The HyperAdapt 2.0 smart shoe technology, featuring the Electro Adaptive Reactive Lacing (EARL) system, which allows for automatic fit adjustment.
• A patent granted on July 29, 2025, for a feature using 3D scanning to create a custom, 3D printed structure for personalized fit.
• The 'Sole Structure with Midsole Protrusions and Arced Profile' patent, published in June 2023, designed to enhance forward momentum and reduce foot fatigue.
• The 'fluid movement controller' patent, filed in February 2025, detailing electronically controlled, fluid-filled bladders for real-time cushioning adjustments.

Next, you have to look at the digital ecosystem. This is where they capture direct-to-consumer (DTC) revenue and, critically, own the customer relationship and data. The Nike App and the SNKRS app are central to this strategy. The SNKRS app, the hub for their most coveted releases, has seen massive growth, with the global number of active users increasing by 57 percent in the year leading up to late 2024/early 2025 context. Demand within SNKRS reached $1.69 billion in that same period, though supply only met about 7 percent of that demand. A key internal mandate aims to ensure 80 percent perceived member fairness, up from the mid-20s, showing a clear focus on improving the digital experience, even if the execution remains challenging. That focus on member data is a resource in itself.

Finally, we look at the hard assets on the balance sheet as of the fiscal year end, May 31, 2025. These numbers show the scale of the physical and financial foundation supporting the brand and technology. Here's the quick math on the total assets:

Diving a bit deeper into those current assets, which represent liquidity and near-term working capital, you see where the operational muscle is:

• Cash & Short-Term Investments: $9.15 billion.
• Inventories: $7.49 billion.
• Net Receivables: $4.72 billion.

The total assets figure of $36.58B is down about 4.0 percent from the prior year, which is something to watch, but still represents a massive base of resources to deploy against their strategy. Finance: draft 13-week cash view by Friday.

NIKE, Inc. (NKE) - Canvas Business Model: Value Propositions

Performance innovation for elite and everyday athletes

NIKE, Inc. is unifying its Innovation, Design, and Product teams across NIKE, Jordan Brand, and Converse into a single operation to streamline athlete-first development.

Demand creation expense for the fourth quarter of fiscal 2025 was $4.7 billion, representing a 9 percent increase. Analysts projected a record $4.9 billion marketing spend.

Cultural relevance and aspirational lifestyle brand identity

The company is prioritizing cultural and category relevance, evidenced by increased Demand creation spend even as revenues fell. The full-year revenue for NIKE, Inc. in fiscal 2025 was $46.3 billion.

Exclusive access to limited-edition products via digital apps

The company is repositioning Nike Digital as a full-price channel. NIKE Digital sales declined 26 percent in the fourth quarter of fiscal 2025. In the first quarter of fiscal 2026, NIKE Digital sales declined 12 percent year over year.

The NIKE Brand Digital segment saw a 20 percent decrease in full-year fiscal 2025 NIKE Direct revenues.

Superior product quality and premium pricing strategy

CEO Elliott Hill opted for price hikes across various items of clothing and footwear as part of a turnaround strategy. The gross profit margin for the full fiscal year 2025 narrowed to 42.73 percent. New tariffs are expected to cause a gross margin contraction of around 1.75 points in the subsequent quarter.

Personalized shopping experiences through digital membership

The company previously aimed for its digital business to represent 40 percent of total business by 2025. In 2019, the digital share was 10 percent.

The company returned approximately $5.3 billion to shareholders in fiscal 2025.

• Share repurchases totaled $3.0 billion, retiring 37.6 million shares.
• Dividends paid totaled $2.3 billion, up 6 percent from the prior year.

NIKE, Inc. (NKE) - Canvas Business Model: Customer Relationships

You're looking at how NIKE, Inc. connects with its consumers directly, which is the engine for its Direct-to-Consumer (DTC) strategy. This relationship block is heavily digitized, but the numbers show a recent, sharp pullback in that digital engagement, which is a key near-term risk you need to watch.

Digital membership programs (NikePlus) for personalized offers are central to the strategy, powered by the data collected across their ecosystem of apps. While the exact active member count for late 2025 isn't public, the scale of their application footprint is massive; as of mid-2023, the four core apps (SNKRS, NIKE Mobile App, NTC, and NRC) attracted 500 million users in total. The focus is on leveraging this membership base for tailored experiences, though the recent financial reports show the digital channel is under pressure.

Automated self-service via e-commerce and mobile apps saw a significant contraction in Fiscal Year 2025. NIKE Direct revenues for the full fiscal year 2025 were $\$18.8$ billion, down $13$ percent reported year-over-year, with NIKE Brand Digital sales specifically falling $20$ percent. This trend continued into the start of fiscal 2026, where Q1 Nike Digital sales declined $12$ percent year-over-year, even as total revenue saw a slight increase. Management is actively repositioning Nike Digital to a full-price model, which involved reducing promotional days by over 50 in North America in early 2025 compared to the prior year.

For the premium segment, dedicated in-store staff for premium, immersive retail experiences remains a focus, though the digital sales slump suggests a channel shift or traffic issue. In Q3 Fiscal 2025, NIKE-owned store sales saw a $2$ percent dip, contrasting with the steeper $15$ percent drop in Nike Digital sales for that quarter. For the full fiscal year 2025, NIKE-owned stores were flat, which, given the overall DTC revenue decline, suggests they are holding ground better than the pure digital channel.

Community building through running clubs and fitness apps is supported by significant corporate investment, signaling a long-term commitment to brand affinity over immediate sales. In Fiscal Year 2024, NIKE, Inc. invested $\$133$ million in community impact, which represented $2.2\%$ of the prior year's Pre-Tax Income (PTI), meeting their stated goal of investing at least $2\%$ of prior-year PTI annually.

The SNKRS app is the ultimate direct-to-consumer relationship tool for the most coveted products, but it faces significant user satisfaction challenges. Internal data from late 2024/early 2025 showed that the global number of active SNKRS app users had grown $57$ percent over the prior year. However, the total demand within the app reached $\$1.69$ billion, of which NIKE only met $7$ percent. This scarcity created a major relationship risk, with internal metrics showing the perceived fairness among users was only in the mid-20s, far below the target of the $80$s.

Here's a quick look at the key relationship metrics we can quantify:

The company is clearly prioritizing the long-term relationship value over short-term digital volume, evidenced by the push for a full-price digital model, which resulted in a $15$ percent digital sales drop in Q3 FY2025. Still, the expected tariff-related costs of $\$1$ billion in fiscal 2026 add another layer of complexity to maintaining consumer value perception.

You should track the success of the new CEO's efforts to restore fairness in the SNKRS app, as that perceived fairness metric is a direct measure of the health of their most engaged consumer relationship. The goal is 80 percent perceived fairness, a massive jump from the mid-20s reported recently.

• Digital sales declined 15% in Q3 FY2025.
• NIKE-owned stores were flat in FY2025, while Digital sales fell 20%.
• The company expects e-commerce traffic to decline by double digits in fiscal 2026.
• In EMEA, Nike Digital revenue fell 36% in Q4 FY2025.
• In Greater China, Nike Digital revenue fell 31% in Q4 FY2025.

Finance: draft the Q2 FY2026 cash flow projection incorporating the expected $\$1$ billion in tariff headwinds by next week.

NIKE, Inc. (NKE) - Canvas Business Model: Channels

You're looking at how NIKE, Inc. gets its product into the hands of the consumer as of late 2025. The channel strategy is clearly in a state of recalibration, moving away from the aggressive Direct-to-Consumer (DTC) focus of prior years toward a more balanced, or perhaps pragmatic, approach.

NIKE Brand Digital (Nike.com, Nike App, SNKRS) is a core part of the NIKE Direct segment, but it saw significant headwinds in fiscal 2025. For the full fiscal year ended May 31, 2025, NIKE Direct revenues-which bundle digital and owned stores-totaled $18.8 billion, a reported decrease of 13 percent year-over-year. The digital component, NIKE Brand Digital, was the primary drag, falling 20 percent for the full fiscal year 2025. This trend continued into the first quarter of fiscal 2026 (ending August 31, 2025), where NIKE Brand Digital sales were down 12 percent year-over-year, though this decline was less severe than the 15 percent drop seen in the third quarter of fiscal 2025. It seems the push to make digital a full-price channel is impacting volume, for now.

NIKE-owned retail stores showed resilience, or at least stability, within the NIKE Direct portfolio during the full fiscal year 2025, as those revenues were reported as flat compared to the prior year. However, looking at the quarterly data, even owned stores faced pressure; in Q3 fiscal 2025, NIKE-owned stores saw a 2 percent decrease, and in Q1 fiscal 2026, they were down 1 percent. As of November 18, 2025, there were 292 NIKE stores operating in the United States alone.

The Strategic wholesale partners segment remains the largest revenue driver for NIKE, Inc. Wholesale revenues for the full fiscal year 2025 were $25.9 billion, representing approximately 56.0 percent of the total $46.3 billion in revenue. While wholesale revenue declined by 7 percent for the full year, the first quarter of fiscal 2026 showed a strong rebound, with wholesale revenues growing 7 percent year-over-year to $6.8 billion. This suggests a deliberate shift to re-energize relationships with key retailers as part of the 'Win Now' strategy under the new CEO.

You should note the significant strategic move regarding Resumed direct sales on major e-commerce platforms like Amazon. NIKE ended its six-year hiatus by resuming direct sales on Amazon in the US starting in May 2025. This decision was made to ensure products are available wherever consumers choose to shop, a clear pivot from the previous DTC-first mandate.

The physical footprint and supporting infrastructure rely on a network of providers. While specific 2025 figures for Global third-party logistics and shipping providers aren't broken out in the earnings reports, the overall channel mix shift has direct implications. The gross margin for the full fiscal year 2025 decreased to 42.7 percent, partially attributed to changes in channel mix, which often involves logistics costs and inventory positioning across these varied channels.

Here's the quick math on the NIKE Brand revenue split for the full fiscal year 2025:

The performance across the digital and physical DTC components shows volatility:

• NIKE Brand Digital sales fell 20 percent in FY 2025.
• NIKE-owned stores revenue was flat for FY 2025.
• In Q1 FY2026, NIKE Direct revenue was $4.5 billion, down 4 percent.
• In Q3 FY2025, NIKE Digital sales dropped 15 percent.

What this estimate hides is the specific contribution of the SNKRS app versus Nike.com, but the overall NIKE Brand Digital decline of 20 percent in FY 2025 is the key takeaway for that part of the channel strategy. Finance: draft 13-week cash view by Friday.

NIKE, Inc. (NKE) - Canvas Business Model: Customer Segments

You're looking at how NIKE, Inc. carves up its massive global market to drive sales, which is key to understanding its financial performance, especially after the reported 10% revenue decline in Fiscal Year 2025, landing at $46.3 billion total revenue. NIKE, Inc. doesn't treat all buyers the same; it segments them based on their activity level, fashion alignment, and digital engagement.

The core of the business still rests on selling performance gear, but the focus has broadened significantly. The company targets a wide demographic, primarily individuals aged 15 to 45, ensuring it captures both current spending power and future brand loyalty. This broad appeal is reflected in the product revenue split for Fiscal Year 2025:

Performance Athletes (professional, serious amateur)

This segment remains the brand's heritage and innovation proving ground. While specific revenue attributed only to professional athletes isn't broken out, their influence drives the premium product lines. The focus here is on high-performance technology, which trickles down to the serious amateur market. The brand's commitment to this group is evident in its continued investment in sport offense, ensuring products resonate with athletes.

Sneaker Enthusiasts and Streetwear/Fashion Consumers

This group drives significant margin and cultural relevance, often overlapping with the youth demographic. They are highly engaged with the direct-to-consumer (DTC) channel, which includes the Nike app and website. However, NIKE, Inc. is actively repositioning this channel as a full-price experience. This strategic shift led to a notable contraction in this segment's direct spending power, with NIKE Brand Digital sales falling 20% in Q1 FY2025 and 15% in Q3 FY2025. Still, the brand maintains its premium image, which supports higher average selling prices when promotions are pulled back.

General Lifestyle and Fitness Consumers (global mass market)

This segment represents the largest volume of casual wearers and general fitness participants globally. They are served through both NIKE Direct and Wholesale channels. In FY2025, Wholesale revenue was $25.9 billion, down 7%, indicating that this mass market relies heavily on the broader retail network. These consumers seek the brand for its lifestyle appeal and association with health-conscious living.

Youth and Gen Z seeking cultural and digital connection

Millennials (ages 24-39) and Generation Z (ages 9-24) are crucial for future growth. They are the primary target for sneaker purchases and are heavily influenced by digital trends and cultural moments. The company's strategy involves creating emotional connections, but the recent digital sales slump shows a near-term challenge in fully capturing this digitally native group at full price. The brand actively targets teens, noted as a favorite footwear and apparel brand for them in 2024 in the US, according to analysts at Piper Sandler.

Women's segment, a key focus for future growth

NIKE, Inc. views the women's segment as a structural growth lever, with analysts forecasting an 8% Compound Annual Growth Rate (CAGR) for women's sportswear through 2030. This focus is paying off in specific areas; for instance, in Q4 2025, the women's segment grew high single digits in apparel, outperforming broader revenue declines. In the US market specifically, female clothing and footwear contributed approximately 30-35% of North America revenues in FY2025. Furthermore, women represented 40% of NIKE Membership as of 2023, signaling a deep and growing base of loyal customers.

• The women's segment is a key driver, with Jefferies forecasting 8% CAGR for women's sportswear through 2030.
• In Q4 2025, women's apparel growth was high single digits, outpacing overall declines.
• Historically, men accounted for 67.4% of end-users in 2022, showing the gap the women's push is closing.
• Product allocation reflects this focus: 38.1% of footwear products targeted women in 2023.

Finance: review Q2 FY2026 inventory levels against the Q1 FY2026 wholesale growth of 11% in North America.

NIKE, Inc. (NKE) - Canvas Business Model: Cost Structure

You're looking at the expense side of the NIKE, Inc. ledger, which is where the rubber meets the road for profitability. The cost structure is heavily weighted toward getting product made and then convincing the world to buy it. Here's the quick math on the major drains on the top line, using the latest reported quarterly figures from Q3 Fiscal Year 2025.

Cost of Sales (COS), the largest expense, including inventory and production

Cost of Sales is your biggest single cost, directly tied to the manufacturing and acquisition of goods. For the third quarter of Fiscal Year 2025, which ended February 28, 2025, NIKE, Inc. reported a Cost of Sales of $6,594 million on revenues of $11.3 billion. This resulted in a Gross Margin of 41.5% for the quarter, a drop of 330 basis points year-over-year, driven by higher discounts, inventory obsolescence reserves, and increased product costs. Keeping inventory levels in check is critical to protecting this margin; at the end of that same quarter, total inventories stood at $7.5 billion.

The full-year picture for Fiscal 2025 showed total revenues of $46.3 billion, illustrating the scale of the underlying cost base.

Demand creation expense (marketing/advertising), a major investment

Marketing spend is a non-negotiable investment to maintain brand heat. In Q3 FY2025, NIKE, Inc. spent $1.1 billion on Demand Creation expense, which was an increase of 8% compared to the prior year, primarily due to higher brand marketing expense. This investment is designed to support product launches and major sport moments.

Research and development (R&D) for product innovation

Innovation costs are essential for future revenue, though they are often embedded within other expense lines. While Operating Overhead includes R&D costs, the reported Capitalized research and development expenditures for the most recent period (likely FY2025) were $923 million. For context, the prior period's figure was $878 million.

Operating overhead (wages, rent, logistics) of $2.8 billion in Q3 FY2025

This category covers the fixed and semi-fixed costs of running the global enterprise. For the third quarter of FY2025, Operating overhead expense was reported at $2.8 billion. This represented a decrease of 13% year-over-year, largely attributed to the prior year including restructuring charges of $340 million and lower wage-related expenses. Selling and administrative expense overall for the quarter was $3.9 billion, down 8%.

The key components of operating overhead, which also include R&D costs, bad debt expense, rent, depreciation, and technology investments, are managed closely as part of the turnaround plan.

Tariff and supply chain costs, a current headwind

Geopolitical factors are imposing a direct, measurable cost burden. NIKE, Inc. CFO Matthew Friend has flagged that increased costs from U.S. tariffs could cost the company roughly $1 billion in Fiscal Year 2025, with projections indicating this impact could rise to approximately $1.5 billion in Fiscal Year 2026. The company pays an average U.S. customs tax rate in the mid-teens for imported footwear. To combat this, NIKE is actively shifting its sourcing mix; China, which accounted for around 16% of all footwear imports into the U.S., is targeted to drop to the high single digits by the end of Fiscal Year 2026. The company is executing a four-pronged approach to mitigate these headwinds over time.

Here's a snapshot of the key quarterly expenses from Q3 FY2025:

The company's strategy involves managing these costs through specific actions:

• Reducing reliance on high-tariff sourcing regions like China.
• Implementing surgical price increases starting in the fall of 2025.
• Negotiating with retail partners and suppliers to absorb structural cost increases.
• Evaluating corporate cost reductions.

Finance: draft 13-week cash view by Friday.

NIKE, Inc. (NKE) - Canvas Business Model: Revenue Streams

You're looking at how NIKE, Inc. actually brings in the money, which is always the most critical part of any business model review. For fiscal year 2025 (FY2025), the total revenue for NIKE, Inc. landed at approximately \$46.3 billion. This revenue is split primarily between two major channels: Wholesale and NIKE Direct (DTC, or direct-to-consumer).

The Wholesale revenue stream accounted for \$25.9 billion in FY2025. That's the money coming from selling products to authorized retailers and partners. To be fair, this channel saw a reported decrease of 7 percent compared to the prior year. The other major channel, NIKE Direct revenue (DTC), totaled \$18.8 billion in FY2025. This segment, which includes sales through NIKE-owned stores and digital platforms, experienced a reported decrease of 13 percent year-over-year.

When you break down the revenue by product type, Footwear sales remain the engine, as they always have. Here's the quick math on the product segments for FY2025:

As you can see, Footwear is definitely the largest product category, bringing in over two-thirds of the segment revenue. The Apparel and Equipment sales are grouped here, with Apparel alone at \$15.27 billion. Equipment revenue isn't explicitly broken out from Apparel or the 'Other' category in this specific segmentation, so we use the Apparel figure as the primary component alongside Footwear.

Finally, we look at Licensing and franchise fees, which includes revenue from brands like Converse. While a specific total for licensing fees isn't immediately available for the full year, we know the subsidiary Converse generated revenues of \$357 million in the fourth quarter of FY2025 alone. Global Brand Divisions revenues also include NIKE Brand licensing and other miscellaneous revenues that aren't part of the main geographic segments. This stream provides a steady, albeit smaller, component to the overall top line.

You'll want to track the channel mix shift closely; the DTC channel is shrinking faster than Wholesale in the reported period, which is a key dynamic to watch. Finance: draft 13-week cash view by Friday.