Converse makes money by selling sneakers, mainly the Chuck Taylor All Star, to retailers and directly to consumers, plus royalties from licensees. It is a wholly owned brand of NIKE, Inc., reported as its own segment: in fiscal 2026 (the year to 31 May 2026) revenue was $1,174 million, down 31%, and earnings before interest and taxes fell 93% to $18 million as Nike ran a strategic reset of the brand.
Footwear brought in $1,013 million of Converse's fiscal 2026 revenue; apparel added $48 million and equipment $21 million.
02
Wholesale
Retail partners bought $605 million of Converse product in fiscal 2026, down 31%, the largest channel.
03
Direct to consumer
Converse's own stores and digital channels sold $477 million in fiscal 2026, also down 31%.
04
Licensing royalties
The 'other' line of $92 million comes from territories served by third-party licensees, who pay Converse royalties for its trademarks and other intellectual property.
Nike says Converse is in the midst of a strategic reset of the brand and marketplace and expects negative impacts to continue throughout fiscal 2027 in its fiscal 2026 10-K.
Volume and price both fell
Currency-neutral revenue fell 32% in fiscal 2026, with declines in all territories; unit sales fell 31%. Gross margin dropped 490 basis points to 43.8% on higher discounts, channel mix and reset costs such as inventory reserves and severance.
Demand creation expense fell 39% to $95 million in fiscal 2026 as Nike cut brandmarketing for Converse.
No turn yet in fiscal 2027
In the quarter to 31 August 2026 Converse revenue fell 28% to $263 million and EBIT fell to $25 million from $39 million according to Nike’s first-quarter results of 1 October 2026.
Converse over three years
Fiscal 2024
Revenue$2,082M
EBIT$474M
Fiscal 2025
Revenue$1,692M
EBIT$240M
Fiscal 2026
Revenue$1,174M
EBIT$18M
Q1 fiscal 2027 (quarter)
Revenue$263M
EBIT$25M
What it means for you
Operators: a heritage product carries a brand only while demand is fresh; track unit volume, not just revenue.
Watch discounting: Converse's margin fell mainly on lower prices, a common sign that a brand has too much stock in the channel.
Licensing adds high-margin revenue but depends on partners; Nike lists licensee performance as a risk.
Investors: Converse is small inside Nike (about 2.5% of $46.4 billion fiscal 2026 revenue), so its reset barely moves the group.
Builders: when cutting demand creation, measure what happens to full-price sell-through before cutting further.
The Business Engineer lens
Converse shows how a brand with one icon can lose momentum quickly: fewer units, deeper discounts and less marketing reinforce each other. The Business Engineer’s view is that in an AI-mediated shopping world, where assistants compare prices and alternatives instantly, heritage brands need a clear reason to be chosen beyond the logo.
By selling sneakers to retailers ($605 million in fiscal 2026) and directly to consumers ($477 million), plus $92 million of mainly licensing royalties.
Who owns Converse?
NIKE, Inc., which reports Converse as a wholly owned subsidiary brand and a separate operating segment.
How much revenue does Converse make?
$1,174 million in fiscal 2026 (to 31 May 2026), down 31% from $1,692 million, and $263 million in the quarter to 31 August 2026.
Is Converse profitable?
Barely: EBIT was $18 million in fiscal 2026, down from $240 million in fiscal 2025 and $474 million in fiscal 2024.
The complete explainer, cleaned up and reformatted for mobile.
How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
In short
Converse makes money selling Chuck Taylor and other casual sneakers to retailers and directly to consumers, plus royalties from licensees. In fiscal 2026 (to 31 May 2026) its revenue was $1,174 million, down 31% and about 2.5% of NIKE, Inc.’s $46.4 billion. Its EBIT fell 93% to $18 million as Nike reset the brand.
Watch (62 seconds): Nike: where the money comes from, step by step, with captions. Figures from the filing named at the end.
What drives Converse’s revenue
Sneakers. Footwear was $1,013M of Converse’s $1,174M of FY2026 revenue; apparel added $48M and equipment $21M.
Converse revenue by fiscal year, FY2022 to FY2026, from the company's filings. Chart: The Business Engineer.
Wholesale accounts bought $605M, and Converse’s own stores and websites sold $477M. It ended the year with 60 stores in the U.S. and 54 outside it, including factory stores.
The remaining $92M came mainly from licensing: Nike says these are territories served by third-party licensees who pay Converse royalties. Converse earns no revenue in Japan, where it does not own the trademarks.
How Converse compares
Inside Nike, Converse is small: 2.5% of FY2026 revenue and $18M of Nike’s $3,850M EBIT.
Against its own history, revenue of $1,174M compares with $2,346M in FY2022 and $2,427M in FY2023, a fall of 52% from that peak.
Its EBIT margin dropped from 22.8% in FY2024 to 14.2% in FY2025 and 1.5% in FY2026 (calc).
What changed in FY2026
Revenue fell 32% on a currency-neutral basis, with declines in all territories. Unit sales fell 31%.
Nike revenue by line, prior year against FY2026, as reported. Chart: The Business Engineer.
Gross margin fell 490 basis points to 43.8%, which Nike puts down to lower prices from discounts and channel mix, plus reset costs including inventory reserves and severance.
Converse cut demand creation spending by 39% to $95M, and its U.S. store count fell from 78 to 60.
What to watch
Nike says Converse is in a strategic reset of the brand and marketplace and expects the actions to continue throughout fiscal 2027.
The first quarter of fiscal 2027 showed no turn yet: revenue fell 28% to $263M and EBIT to $25M from $39M, although higher prices offset part of a 34% drop in units.
Royalty income depends on licensees, which Nike lists as a risk.
Frequently asked questions
How does Converse make money?
By selling casual sneakers under brands such as Chuck Taylor and All Star to retailers ($605M in FY2026) and directly to consumers ($477M), plus $92M of mainly licensing revenue.
Who owns Converse?
NIKE, Inc. Converse is a wholly-owned subsidiary brand, headquartered in Boston, and one of Nike’s reportable segments.
How much revenue does Converse make?
$1,174M in fiscal 2026 (to 31 May 2026), down 31% from $1,692M, and $263M in the quarter to 31 August 2026.
Is Converse profitable?
Barely, in FY2026: EBIT was $18M, down from $240M in FY2025 and $474M in FY2024. Nike does not report Converse net income.
How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
Correction (10 Oct 2026): an earlier section on this page showed unsourced figures; it has been removed.
Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated over $2.4 billion in revenue in 2023. And like Nike, it follows a heavy Wholesale distributionstrategy, where most of its sales are made, through footwear. However, Converse also follows a direct distribution approach where it sells directly via its mono-brand stores.
Casual Wearers: Individuals who purchase Converse shoes for everyday casual wear. This segment is driven by the brand’s style and versatility.
Fashion Enthusiasts: Young consumers who incorporate Converse sneakers into their fashion-forward outfits, valuing the brand’s cultural and historical significance.
Sports Enthusiasts:
Basketball Players: Although Converse has shifted its focus, it still maintains a segment of consumers who appreciate its basketball heritage, especially vintage and retro sneaker designs.
Collectors and Sneakerheads:
Sneaker Collectors: Enthusiasts who collect Converse sneakers for their unique designs, limited editions, and collaborations.
Cultural Icons: Consumers who buy Converse products as cultural symbols, often influenced by music, art, and popular culture.
General Consumers:
Everyday Users: Individuals of all ages who seek comfortable and stylish footwear for daily use, attracted by Converse’s durability and timeless design.
Revenue Streams
Converse generates revenue through several channels:
Product Sales:
Footwear: The primary revenue driver, including various models of sneakers such as Chuck Taylor All Star, One Star, and Jack Purcell.
Apparel and Accessories: Clothing items, including t-shirts, hoodies, and accessories like bags and hats that complement the footwear line.
Collaborations and Limited Editions:
Designer Collaborations: Partnerships with high-profile designers and brands to create unique, co-branded products that attract fashion enthusiasts and collectors.
Limited Releases: Special, limited-edition products that create hype and often sell out quickly, driving high demand and premium pricing.
Customizations:
Converse By You: A customization service where consumers can design their own sneakers, selecting colors, patterns, and materials. This service allows for higher pricing and personalized products.
Market Strategy
Converse’s market strategy focuses on brand heritage, consumer engagement, and strategic partnerships.
Brand Heritage:
Historical Legacy: Leveraging its long history and iconic status, particularly the Chuck Taylor All Star, to build a strong brand identity. The legacy of Converse in sports and culture is a significant marketing tool.
Retro Appeal: Emphasizing vintage and retro designs to attract consumers who appreciate classic styles.
Consumer Engagement:
Social Media and Digital Marketing: Utilizing platforms like Instagram, Twitter, and Facebook to engage with consumers, promote new releases, and create buzz around the brand.
Influencer Marketing: Collaborating with influencers and celebrities who resonate with Converse’s brand values to reach a broader audience.
Strategic Partnerships:
Collaborations with Artists and Designers: Partnering with artists, musicians, and designers to create exclusive collections that attract diverse consumer segments.
Sports and Cultural Sponsorships: Sponsoring events and activities that align with the brand’s heritage and target audience, such as music festivals and art exhibitions.
Distribution Strategy
Converse’s distributionstrategy involves a mix of direct-to-consumer and wholesale channels.
Direct-to-Consumer (DTC):
Brand Stores: Flagship stores and Converse-branded retail locations that offer a curated selection of products and an immersive brand experience.
Online Sales: The official Converse website and mobile app provide a platform for online shopping, exclusive releases, and personalized shopping experiences.
Wholesale:
Retail Partnerships: Collaborations with major retailers such as Foot Locker, JD Sports, and others to distribute Converse products widely.
Specialty Stores: Partnerships with specialty boutiques and sneaker shops that often get limited-edition releases and exclusive drops.
International Expansion:
Global Presence: Expanding the brand’s reach in international markets through localized marketing strategies and partnerships with regional retailers.
Competitive Advantages
Converse’s competitive advantages lie in its strong brand equity, iconic products, and strategic marketing.
Iconic Status: The association with the Chuck Taylor All Star and its status as a cultural icon provides a strong foundation for the brand’s identity and consumer loyalty.
Cultural Relevance: Converse products have transcended sports to become cultural symbols, embraced by fashion enthusiasts and celebrities.
Product Innovation:
Classic and Versatile Designs: Combining timeless designs with modern updates ensures that Converse products remain relevant across generations.
Customization Options: The Converse By You service allows consumers to create personalized products, enhancing consumer engagement and loyalty.
Strategic Marketing:
Influencer and Celebrity Collaborations: Partnerships with influential figures in fashion, music, and sports enhance brand visibility and credibility.
Engagement through Social Media: Active engagement with consumers through social media platforms helps build a strong community and keep consumers informed and excited about new releases.
Challenges and Future Outlook
Despite its success, Converse faces several challenges, including competition, market saturation, and counterfeit products.
Competition:
Rival Brands: Competing with other major footwear brands such as Nike (its parent company), Adidas, and Vans, which are also vying for market share in the casual and athletic footwear industry.
Emerging Brands: New entrants in the market offering innovative designs and targeting niche segments.
Market Saturation:
Overexposure: The risk of market saturation due to frequent releases and widespread availability, which could dilute the brand’s exclusivity.
Consumer Fatigue: Keeping the consumer base engaged and excited amidst a crowded market with many options.
Counterfeit Products:
Brand Protection: Dealing with counterfeit products that undermine the brand’s integrity and profitability. Ensuring robust measures to protect intellectual property and brand authenticity.
Nike in charts
North America earned $5.4B of EBIT; Converse just $18M. Source: Nike Form 10-K for fiscal 2026 (year to 31 May 2026, SEC EDGAR). EBIT is Nike's own measure (earnings before interest and taxes). Analysis by The Business Engineer.North America +5%; Greater China −11%, Converse −31%. Source: Nike Form 10-K for fiscal 2026 (year to 31 May 2026, SEC EDGAR). Analysis by The Business Engineer.
How AI Is Changing This
Converse is leveraging AI to transform its traditional sneaker business model through personalized design and manufacturing. — as explored in the economics of AI-era business models — The company’s “Converse By You” platform uses machine learning algorithms to analyze customer preferences, purchase history, and style trends to offer hyper-personalized shoe customization options.
Nike follows a wholesale strategy combined with a very strong direct distributionstrategy. The company makes money primarily from footwear, which represented over 64% of its total revenues in 2023, followed by apparel (27%). The most successful Nike brand is the Jordan Brand, which in 2023 generated $6.6 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people.
Nike leverages both a wholesale and direct distributionstrategy. Indeed, while still in 2023, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS).
Nike generated most of its revenue from footwear. Indeed, in 2023, Nike generated over $33.13 billion in revenue from footwear, $13.84 billion in apparel, $1.73 billion in equipment, and $2.43 billion from the Converse brand.
Nike generated $51.22 billion in revenue in 2023 and over $5 billion in net profits, compared to over $46.71 billion in revenue and $6.05 billion in profits for 2022.
Jordan follows a demand generation business model, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue.
Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distributionstrategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
