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Start with comparable periods and definitions
Before comparing figures, note each company’s fiscal year-end, reporting period, currency and definition of revenue. A fiscal-year result and a single quarter are not equivalent; neither are companies reporting in different currencies or using different segment groupings. Retail results can be seasonal, so examine multiple years and more than one quarter.
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- Separate reported growth from constant-currency growth and identify foreign-exchange effects.
- Check whether figures include discontinued operations, acquisitions or other changes in company structure.
- Compare standard accounting results with any adjusted figures, and understand the adjustments.
- Read the company’s explanations alongside the numbers; an identical label such as “direct” or “comparable sales” may not mean an identical calculation across issuers.
These checks matter for the examples below: they cover different fiscal years and periods, and adidas reports in euros while the other cited figures are in U.S. dollars. They illustrate how to read disclosures, not an apples-to-apples ranking.
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Consolidated revenue growth is a starting point, not a complete demand signal. Look at comparable sales, geography, product categories, currency effects and sales channels to see what is driving the total. Growth concentrated in one region or category may carry different risks from broad-based growth; foreign-exchange movements can also make reported results diverge from underlying trends.
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For example, NIKE reported fiscal 2025 revenue of $46.3 billion, down 10% year over year, while NIKE Direct revenue fell 13%. Those figures show why total sales and channel-level performance both deserve attention; they do not, on their own, explain the outlook.
Product mix can help identify how dependent a company is on particular categories. Under Armour disclosed that apparel represented 67% of fiscal 2025 net revenue, footwear 23%, and accessories 8%. Use the company’s annual report to examine category trends and any changes in mix rather than assuming that a large category share guarantees durable demand.
For adidas, the 2025 Annual Report reports net sales of €24,811 million. Its full report provides the context needed to investigate segment and geographic drivers before drawing conclusions from the consolidated figure.
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Compare margins—and what is moving them
Gross margin is the share of revenue left after the costs included in cost of sales; operating margin also reflects operating expenses. Compare both over time and read management’s explanations for changes. Discounting, channel mix, product costs, freight, inventory reserves, currency and tariffs can all affect the reported result.
NIKE reported fiscal 2025 gross margin of 42.7%, down 190 basis points. The company cited higher discounts, channel mix and inventory obsolescence reserves among the causes. Its fiscal 2025 results are useful for understanding how demand actions and inventory risk may show up in margins, rather than treating the margin percentage as an isolated score.
For a different profile, lululemon reported fiscal 2025 net revenue of $11.103 billion, gross margin of 56.6% and operating margin of 19.9%. In fiscal 2026’s first quarter, it reported net revenue growth of 4% alongside gross margin of 54.2%, down 410 basis points. Growth and margin movement can coexist; investigate the explanations and costs behind both.
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adidas reported a 51.6% gross margin and €2,056 million operating profit for 2025. These figures should not be ranked directly against companies’ results from other periods or currencies without aligning reporting bases and investigating their accounting definitions and business mix.
Account for sourcing and trade exposure
Costs can shift quickly when sourcing or trade conditions change. Under Armour reported approximately $5 billion in fiscal 2026 revenue, down 4%, and a 45.5% gross margin, down 240 basis points; the company identified tariffs as the largest driver of margin pressure. lululemon’s filings also discuss tariff and customs costs as margin risks. Consider where a company sources products and how exposed its costs are, but do not assume identical effects across companies.
Check inventory against sales and discounting
Inventory is most informative when read alongside revenue trends, markdowns, turnover and management’s explanation of product availability. Inventory growing faster than sales can raise the risk of discounting, obsolescence and cash tied up in unsold goods; flat inventory is not automatically healthy if demand is falling or supply is constrained.
NIKE reported fiscal 2025 inventory of $7.5 billion, flat year over year, while revenue declined 10%. lululemon reported fiscal 2025 inventory of $1.4 billion, up 9%, and management expected inventory growth to exceed revenue growth during 2025. The figures are company-specific signals to investigate—not proof, by themselves, of a problem or an advantage. Review the filings for inventory reserves, markdowns and the reasons management gives for stock levels.
Understand the sales-channel mix
Direct-to-consumer and wholesale channels can differ in margins, customer reach, returns, marketing needs and inventory exposure. Digital sales and company-operated stores can also have different economics. Compare how each company defines and reports its channels, and track mix changes over time rather than assuming that a larger direct channel is always better.
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In fiscal 2025, NIKE reported $18.8 billion in NIKE Direct revenue and $25.9 billion in wholesale revenue. Together, those figures show the scale of its two channels; they do not establish which channel is more profitable without further company disclosure. NIKE’s filing describes its strategy as focusing on sport, product innovation, consumer connections and digital and retail experiences; that is the company’s stated plan, not independent evidence that it is succeeding.
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Follow earnings into cash and assess resilience
Reported profit does not answer whether a business generates cash reliably. Compare operating cash flow with earnings over several periods, then account for capital spending, leases, debt and liquidity. Cash needs can rise when inventory builds or a company invests in stores, distribution or technology. Balance-sheet capacity matters because it affects a company’s ability to manage a demand slowdown or cost shock without relying on unusually favorable conditions.
Use the cash-flow statement and balance sheet in each company’s filings to check:
- Whether operating cash flow broadly supports reported profits over time.
- How much cash is absorbed by inventory and other working-capital changes.
- Whether capital spending and lease obligations leave room to respond to weaker trading.
- Debt maturities, available liquidity and the company’s capacity to fund operations through a downturn.
Connect business quality to valuation
A strong brand, growing sales or high margin does not prove that a stock is attractively priced. Valuation requires market data on a common date and a consistent set of assumptions. Depending on the method, investors may compare metrics such as price-to-earnings or enterprise value to operating earnings, but the inputs must be defined consistently and interpreted alongside growth, cash generation, risk and capital needs.
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The operating figures here do not include synchronized share prices, analyst estimates or comparable valuation multiples. They therefore cannot establish which company is cheapest or the best stock to buy. To make a valuation comparison, use prices from the same date, confirm share counts and debt or cash treatment, and test how sensitive the conclusion is to assumptions about future sales, margins and cash flows.
A practical comparison checklist
- Collect each company’s latest annual report and earnings releases, and write down fiscal year-end, reporting currency and period covered.
- Build a multi-year view of revenue, comparable sales, geography, category mix and channel performance; distinguish reported from constant-currency changes.
- Track gross and operating margins, then connect changes to discounts, channel mix, costs, reserves and management explanations.
- Compare inventory growth with sales, markdowns and cash-flow changes; check turnover and obsolescence disclosures.
- Review operating cash flow, capital spending, leases, debt and liquidity to understand resilience.
- Identify company-specific risks, including sourcing, tariffs, customs costs, currency, seasonality and demand concentration.
- Only then compare valuation using market prices from one date, consistent definitions and explicit assumptions.
For source documents, see NIKE’s investor reports and earnings releases, its SEC filings, adidas’s 2025 Annual Report, Under Armour’s annual reports, and lululemon’s annual reports and quarterly results.
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