“Based on current spot rates, net of hedging activity, we estimate the full year negative impact of foreign exchange on reported revenue and EBIT to now be approximately $4 billion and $900 million, respectively, creating a wide divergence in constant versus real dollar performance.”

In context

“mplications of high inflation on consumer demand. We've managed through cycles like this before, and we know these are times to stay on the offense, leveraging our financial strength to prioritize a quicker return to a healthy pull market. In this environment, strong brands set the pace and we are confident NIKE will emerge even stronger. We are focused on what we can control as we take a measured approach against an uncertain macro outlook. Accordingly, we will tighten up our second half buys and liquidate excess inventory more aggressively beginning in the second quarter, focusing the flow of new product to our strategic partners and NIKE Direct. Headwinds from foreign exchange have also shifted significantly in the last 90 days as the trend of U.S. dollar strengthening has accelerated. Based on current spot rates, net of hedging activity, we estimate the full year negative impact of foreign exchange on reported revenue and EBIT to now be approximately $4 billion and $900 million, respectively, creating a wide divergence in constant versus real dollar performance. We continue to expect currency-neutral revenue growth of low double digits versus the prior year, equating to reported revenue growth of low to mid-single digits versus the prior year, assuming 800 basis points of foreign exchange headwinds. We now expect gross margin to decline between 200 to 250 basis points versus the prior year. This reflects approximately 150 basis points of annual impact from higher markdowns and higher off-price mix to liquidate elevated inventory, a second straight year of more than 100 basis points of headwinds from elevated freight and logistics costs, and foreign exchange pressure now a 70 basis point headwind on the full year. We now expect SG&A to increase high single digits as we prioritize investment in new transformational capabilities to serve consumers d”