After a tumultuous week that saw the departure of two top executives, Nike reported its 2018 Q3 earnings today which included a net loss of $921 million—the first net loss for the brand since May 1998. The brand says this loss was "driven by the enactment of the Tax Act" and required a one-time payment of $2 billion on foreign earnings. "This amount was recorded as a provisional estimate and is subject to change as the company completes its analysis during the measurement period," the brand wrote in its earnings report.
However, despite the loss, there were mostly positive results for the company. Nike, Inc. revenues saw a seven percent increase to $9.0 billion, which includes $8.5 billion from the Nike brand and an additional $483 million from Converse. This jump was supported by success in Greater China, EMEA (Europe, the Middle East, and Africa) and APLA (Asia Pacific and Latin America), as well as double-digit growth in the brand's direct-to-consumer Nike Direct category and growth in both sportswear and basketball.
Elsewhere, gross margin dropped to 43.8 percent, which Nike pins on changes in foreign currency rates, while selling and administrative expenses jumped 11 percent to $2.8 billion as a result of increased overhead expenses and investments in the NikePlus app.