Nike Inc. (NYSE: NKE) joined several other U.S. companies in the discovery that the Chinese market is not the solution to global revenue growth, despite its size and the rapid development of consumer spending there. Local competition and threats from other large multinationals desperate to join in competition for market share shaved Nike’s China results last month.
Revenues for NIKE, Inc. increased 9 percent to $6.2 billion, up 10 percent on a currency-neutral basis. Excluding the impact of changes in foreign currency, NIKE Brand revenues rose 10 percent, with growth in all geographies except Greater China and Japan and in all key categories except Sportswear and Action Sports. Revenues for Other Businesses increased 9 percent as growth at Converse and NIKE Golf more than offset lower revenues at Hurley.
Gross margin increased 30 basis points to 44.2 percent. Gross margin benefitted from the combination of pricing actions and easing material costs, which more than offset higher labor costs. This benefit was partially offset by higher discounts, particularly in Greater China as the Company continues work to manage marketplace inventory. Additionally gross margin was impacted by unfavorable changes in foreign exchange rates and a shift in the mix of the Company’s revenues to lower margin geographies.
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