Revenues for NIKE, Inc. rose 8 percent to $8 billion, up 14 percent on a currency neutral basis.

Revenues for the NIKE Brand were $7.6 billion, up 15 percent on a currency neutral basis driven by growth in every geography and nearly all key categories.



Revenues for Converse were $489 million, down 5 percent on a currency neutral basis, mainly driven by a major system go-live that accelerated orders from the fourth quarter to the third quarter in the prior year.

Gross margin was 45.9 percent, flat compared to prior year. Gross margin benefitted from higher average selling prices and continued growth in the higher margin Direct to Consumer (DTC) business, which were offset by unfavorable changes in foreign currency exchange rates, higher warehousing costs, and the impact of clearing excess inventory in North America.

Selling and administrative expense increased 8 percent to $2.6 billion. Demand creation expense was $804 million, up 10 percent compared to the prior year due to increased investments in advertising, brand events, and digital brand marketing. Operating overhead expense increased 7 percent to $1.8 billion, reflecting growth in the DTC business and targeted investments in operational infrastructure and consumer-focused digital capabilities.

Other income, net was $17 million, comprised primarily of net foreign currency exchange gains. For the quarter, the Company estimates the year-over-year change in foreign currency related gains and losses included in other income, net, combined with the impact of changes in currency exchange rates on the translation of foreign currency-denominated profits, decreased pretax income by approximately $97 million.

The effective tax rate was 16.3 percent, compared to 24.4 percent for the same period last year, primarily due to an increase in the proportion of earnings from operations outside of the U.S., which are generally subject to a lower tax rate, increased recognition of foreign tax credits, adjustments in the prior year to tax expense on intercompany transactions, and the retroactive and permanent reinstatement of the U.S. research and development tax credit.

Net income increased 20 percent to $950 million, driven by strong revenue growth and a lower effective tax rate, while diluted earnings per share increased 22 percent to $0.55, reflecting a 2 percent decline in the weighted average diluted common shares outstanding.