Beaverton, Oregon – Nike had $10.5 bn sales in its footwear division in the first half of 2018, up $225 m or 2% from the equivalent 2017 half.
Across Nike, earnings before interest and tax fell by 18% from $2.4 bn in the first half of 2017 to $2 bn in the first half of 2018.
Gross margin of 43% was 1.2% lower in Q2 2018 than in Q2 2017. Nike said that, although selling prices rose in Q2 2018, these were offset by exchange rates and higher production costs.
In the 2018 quarter, selling and administration expenses rose by 10% to $2.8bn. This was partly as a result of $877 m being spent on ‘demand creation expenses’. These were up 15% ‘driven primarily by higher sports marketing and advertising costs’.
Inventories rose by 6% to $5.3bn compared with the second quarter of 2017. This was caused by foreign exchange and increasing production costs.
Mark Parker, Nike Chairman, said, ‘This quarter we accelerated international growth and build underlying momentum in our domestic business. For the back half of the year, Nike’s innovation line-up is as strong as ever.’