NIKE (NKE) risk factors, FY2025 10-K

Other

1. 01Special Note Regarding Forward-Looking Statements and Analyst Reports
2. 02Global economic conditions have in the past had and could in the future have a material adverse effect on our business, operating results and financial condition
3. 03Our products, services and experiences face intense competition
4. 04Economic factors beyond our control, and changes in the global economic environment, including fluctuations in and uncertainty regarding inflation and currency exchange rates, could result in lower revenues, higher costs and decreased margins and earnings
5. 05We may be adversely affected by the financial health of our wholesale customers
6. 06Climate change, extreme weather conditions and natural disasters may have an adverse impact on our business and results of operations
7. 07Globally, the expectations of regulators and other key stakeholders on corporate responsibility and sustainability-related topics continue to evolve and diverge, and our ability to meet these requirements and expectations could negatively impact our operating results and financial condition
8. 08Our financial condition and results of operations have been, and could in the future be, adversely affected by a pandemic, epidemic or other public health emergency

Business and Operational Risks

1. 09Failure to maintain our reputation, brand image and culture could negatively impact our business
2. 10If we are unable to anticipate consumer preferences and develop new products, we may not be able to maintain or increase our revenues and profits
3. 11We rely on technical innovation and high-quality products to compete
4. 12Our business is affected by seasonality, which could result in fluctuations in our operating results
5. 13Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business
6. 14Failure to accurately forecast consumer demand has in the past led and could in the future lead to excess inventories or inventory shortages, which has in the past resulted and could in the future result in decreased operating margins, reduced cash flows and harm to our business
7. 15Our NIKE Direct operations have required and will continue to require a substantial investment and commitment of resources and are subject to numerous risks and uncertainties
8. 16We may not realize a satisfactory return on our investment in our NIKE Direct operations and management's attention from our other business opportunities could be diverted, which could have an adverse effect on our business, financial condition or results of operations
9. 17We rely significantly on information technology to operate our business, including our supply chain and retail operations, and any failure, inadequacy or interruption of that technology could harm our ability to effectively operate our business
10. 18We are subject to the risk our licensees may not generate expected sales or maintain the value of our brands
11. 19could adversely affect our revenues, both directly from reduced royalties received and indirectly from reduced sales of our other products
12. 20Consolidation of retailers or concentration of retail market share among a few retailers may increase and concentrate our credit risk and impair our ability to sell products
13. 21If one or more of our counterparty financial institutions default on their obligations to us or fail, we may incur significant losses
14. 22We rely on a concentrated source base of contract manufacturers to supply a significant portion of our footwear products
15. 23The success of our business depends, in part, on high-quality employees, including key personnel as well as our ability to maintain our workplace culture and values
16. 24The market for prime real estate is competitive
17. 25Our business operations and financial performance could be adversely affected by changes in our relationship with our workforce or changes to United States or foreign employment regulations

Risks Related to Operating a Global Business

1. 26Our international operations involve inherent risks which could result in harm to our business
2. 27Our products are subject to risks associated with overseas sourcing, manufacturing and financing
3. 28to wage rates and other labor standards that are oftentimes regulated by the governments of the countries in which our products are manufactured
4. 29Changes to U.S. or other countries' trade policies and tariff and import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations
5. 30Our success depends on our global distribution facilities

Legal, Regulatory, and Compliance Risks

1. 31We are subject to a complex array of laws and regulations and litigation and other legal and regulatory proceedings, which could have an adverse effect on our business, financial condition and results of operations
2. 32Failure to adequately protect or enforce our intellectual property rights could adversely affect our business
3. 33We are subject to data security and privacy risks that could negatively affect our results, operations or reputation
4. 34We could be subject to changes in tax rates, adoption of new tax laws or regulations, or changes in the interpretations thereof, additional tax liabilities or increased volatility in our effective tax rate
5. 35Failure of our contractors or our licensees' contractors to comply with our code of conduct, local laws and other standards could harm our business

Risks Related to Our Securities, Investments and Liquidity

1. 36Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns
2. 37The sale of a large number of shares of common stock by our principal shareholder could depress the market price of our common stock
3. 38Changes in our credit ratings or macroeconomic conditions may affect our liquidity, increasing borrowing costs and limiting our financing options
4. 39If our internal controls are ineffective, our operating results could be adversely affected
5. 40If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our operating results could be adversely affected
6. 41Anti-takeover provisions may impair an acquisition of the Company or reduce the price of our common stock
7. 42We have in the past failed and may in the future fail to meet market expectations, which has caused and could in the future cause the price of our stock to decline