Nike Q2 FY18 revenue rises 5% to $8.6 billion

Diluted earnings per share were $0.46, down 8 per cent compared to the same period last year primarily due to decline in gross margin and higher selling and administrative expense, which offset solid revenue growth, a lower tax rate and a lower average share count.

The company's gross margin declined to 43.0 per cent, as higher average selling prices were more than offset by unfavorable changes in foreign currency exchange rates and, to a lesser extent, higher product costs per unit.

For the reported period, net income decreased 9 per cent to $767 million as a decline in gross margin and higher selling and administrative expense more than offset revenue growth and a lower tax rate, while diluted earnings per share decreased 8 per cent from the prior year to $0.46, including a 2 per cent decline in the weighted average diluted common shares outstanding.

'This quarter, led by our consumer direct offense, we accelerated international growth and built underlying momentum in our domestic business," said Mark Parker, chairman, president and CEO, Nike, Inc. "For the back half of the fiscal year, Nike’s innovation line-up is as strong as it’s ever been and we’ll continue to actively shape retail through new differentiated experiences."

Selling and administrative expense increased 10 per cent to $2.8 billion for the second quarter of 2018. Demand creation expense was $877 million, up 15 per cent, primarily driven by higher sports marketing and advertising costs. Operating overhead expense increased 8 per cent to $1.9 billion, due largely to higher administrative costs and continued investments in Nike Direct. (RR)

ALCHEMPro News Desk – India