How did the strong dollar impact major multinationals this quarter? Nike’s results after the bell on Thursday could provide a good preview of what’s to come as earnings season kicks off into the mid-October highs. The sneakers and clothing giant saw a currency headwind of about 6 percentage points in its first fiscal quarter ending Aug. 31. That compares to its fourth-quarter report. from three months ago, when Nike had an impact of 4 percentage points. And going back six months, the turnaround was 3 percentage points. So, basically, the headwind has doubled in six months. But take a closer look at the report and you’ll see the real impact of the currency. Nike’s Europe division reported a revenue increase of just 1%. However, remove the impact of the currency and sales in that region increased 17%. In Asia (besides China) and Latin America, sales increased 5%. Remove the impact of currency and revenue grew 16% more strongly. It was a bit of a surprise to see Nike’s small earnings and sales beat. But not all is rosy, despite those better-than-expected numbers. Shares fell nearly 10% in extended trading as inventories rose 44% ahead of the holiday season and continued weakness in China, the country’s third-largest market. Including currency, China’s sales fell 16% year-on-year. That matches the estimate. Offsetting that drop were better-than-expected sales in North America. However, domestic sales may have been helped by the discounts Nike made to help clear up inventory. The price drop may have helped with the sale, but the price drop has dented profits. Nike’s overall gross margin came in at 44.3% – 1 percentage point below estimates and a few percentage points lower than the previous year. Nike pointed to the reason for the weak margins, specifically: “The overall decline in margins was mainly due to North America, which took measures to liquidate excess inventory through reductions in inventory. NIKE Direct prices and actions on the wholesale market.”