2 Key Takeaways from Nike’s Earning Report

Nike, Inc. (NKE) posted its fourth-quarter earnings report and its full-year financial results for 2016. While the company felt the impact of a stronger dollar and slower growth in North America, the athletic apparel and shoe maker is still in great shape.

Here are two key takeaways from the report:

1. North American Sales Were Flat; International Sales Climbed

Footwear sales in North America rose 2%, but apparel sales tumbled 2%. Sales were flat in North America, the company’s largest market, but international sales were a bright spot for Nike.

Western Europe, Nike’s second largest market, saw sales growth of 19%. Growth was strong in both the apparel and footwear units.

Sales in China were also up 18%, with apparel up 9% and footwear up 24%. Growth was also strong in Japan, with sales soaring 22%.

2. A Stronger Dollar and Expenses Impacted Sales, Profits and Margins

A stronger dollar had a negative impact on the company’s sales and margins. Not accounting for foreign exchange, Nike’s revenue would have been 9% higher. Nike did not reveal any details on the impact of foreign exchange on profit margins, but stated that it did help drive the decline in gross-margin.

Higher expenses were also partly to blame for the company’s flat profits. Overhead and demand creation costs were up 7% each.