Nike Q3 FY18 revenue grows 7% to $9.0 billion

24 Mar '18
2 min read
Courtesy: Nike
Courtesy: Nike

The third quarter revenue of Nike for fiscal 2018 has increased 7 per cent to $9.0 billion, up 3 per cent on a currency-neutral basis. Revenue for the Nike brand was $8.5 billion, up 4 per cent on a currency-neutral basis, driven by Greater China, EMEA and APLA, including double-digit growth in Nike Direct and growth in sportswear and Nike Basketball.

The company's gross margin declined to 43.8 per cent due primarily to unfavourable changes in foreign currency exchange rates, which were partially offset by lower product costs. While the selling and administrative expense increased 11 per cent to $2.8 billion. Demand creation expense was $862 million, up 15 per cent, primarily driven by higher spend in sports marketing, brand moments and new innovation launches. Operating overhead expense increased 9 per cent to $1.9 billion, largely due to higher administrative costs and continued investments in global digital capabilities and the NikePlus membership program.

Income before income taxes decreased 12 per cent to $1.2 billion as solid revenue growth was more than offset by lower gross margin, higher selling and administrative expense and lower other income. The effective tax rate was 179.5 per cent, driven by the Tax Act, which impacted comparability.

During the third quarter, Nike repurchased a total of 14.6 million shares for approximately $962 million as part of the four-year, $12 billion programme approved by the board of directors in November 2015. As of February 28, 2018, a total of 126.4 million shares had been repurchased under this programme for approximately $7.2 billion.

"Nike's Consumer Direct Offense drove strong double-digit growth across our international geographies, led by Greater China.  As we close Q3, we now see a significant reversal of trend in North America, as momentum accelerates through the scaling of new innovation platforms and differentiated Nike Consumer Experiences expand across the marketplace," said Mark Parker, chairman, president and CEO, Nike. (RR)

https://news.nike.com/news/nike-inc-reports-fiscal-2018-third-quarter-results

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