NKE · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

NIKE, Inc. · 2026-10-02 · Importance 49 · Surprise 32

Consolidated gross margin increased 60 basis points to 42.8% from 42.2%, while gross profit declined 3% to $4.798 billion. Lower warehousing and logistics costs contributed approximately 90 basis points, favorable currency changes including hedges contributed 40 basis points, and lower NIKE Brand product costs contributed 10 basis points. These benefits were partly offset by higher other costs, primarily third-party royalties, which reduced margin by 40 basis points, lower NIKE Brand average selling price reducing margin by 30 basis points, and lower Converse gross margin reducing margin by 10 basis points. Lower average selling price reflected higher discounts and channel mix, partially offset by strategic pricing.

Key facts

• Gross margin for the first quarter of fiscal 2027 increased 60 basis points to 42.8% primarily due to lower warehousing and logistics costs. source
• Consolidated gross margin was 60 basis points higher than the prior year due to lower warehousing and logistics costs increasing gross margin approximately 90 basis points, favorable changes in net foreign currency exchange rates including hedges increasing gross margin approximately 40 basis points, and lower NIKE Brand product costs increasing gross margin approximately 10 basis points. source
• These gross margin improvements were partially offset by higher other costs, primarily due to third-party royalties, decreasing gross margin approximately 40 basis points; lower NIKE Brand ASP decreasing gross margin approximately 30 basis points; and lower gross margin from Converse decreasing gross margin approximately 10 basis points. source