Revenues for NIKE, Inc. rose 6 percent to $36.4 billion, up 4 percent on a currency-neutral basis.
Also, on a currency-neutral basis:
• Revenues for the NIKE Brand were $34.5 billion, up 5 percent.
• NIKE Brand sales to wholesale customers increased 2 percent while NIKE Direct revenues grew 12 percent to $10.4 billion, driven by a 25 percent increase in digital commerce sales, the addition of new stores and 4 percent growth in comparable store sales.
• NIKE Brand revenue growth was driven by continued strength in international markets and NIKE Direct with growth across footwear and apparel and key categories including Sportswear and NIKE Basketball.
• Revenues for Converse were $1.9 billion, down 11 percent, as growth in Asia was more than offset by declines primarily in North America.
Gross margin decreased 80 basis points to 43.8 percent driven by 90 basis points of unfavorable changes in foreign currency exchange rates.
Selling and administrative expense increased 9 percent to $11.5 billion. Demand creation expense was $3.6 billion, up 7 percent, primarily due to sports marketing investments. Operating overhead expense rose 10 percent to $7.9 billion, largely due to investments to activate the Consumer Direct Offense including product innovation and digital and speed capabilities.
The effective tax rate was 55.3 percent, compared to 13.2 percent in fiscal 2017 due to significant charges related to the enactment of the Tax Act.
Net income decreased 54 percent to $1.9 billion primarily related to the impact of the Tax Act, which offset strong revenue growth. Diluted earnings per share decreased 53 percent to $1.17, which includes a decline in the weighted average diluted common shares outstanding.