and apparel, sales of NIKE Brand equipment, sales from our Direct to Consumer operations, and sales from our Other Businesses. 

Gross Margin 

Fiscal 2011 Compared to Fiscal 2010 

For fiscal 2011, our consolidated gross margin percentage was 70 basis points lower than the prior year. The primary factors contributing to this decrease were as follows: 

• Higher input costs across most businesses, 

• Increased transportation costs, including additional air freight incurred to meet strong demand for NIKE Brand products across most businesses, most notably in North America, Western Europe, and Central & Eastern Europe geographies, and 

• A lower mix of licensee revenue as distribution for certain markets within our Other Businesses transitioned from licensees to operating units of NIKE, Inc. 

Together, these factors decreased consolidated gross margins by approximately 130 basis points for fiscal 2011, with the most significant erosion in the second half of the fiscal year. These decreases were partially offset by the positive impact from the growth and expanding profitability of our NIKE Brand Direct to Consumer business, a higher mix of full-price sales and favorable impacts from our ongoing product cost efficiency initiatives. 

As we head into fiscal 2012, we anticipate that our gross margins will continue to face pressure from macroeconomic factors, most notably rising product input costs as well as higher transportation costs, which may more than offset the favorable impact from our planned price increases and ongoing production cost efficiency initiatives. 

Fiscal 2010 Compared to Fiscal 2009 

For fiscal 2010, our consolidated gross margin percentage was 140 basis points higher than the prior year. The primary factors contributing to this improvement were as follows: 

• Improved in-line product margins across most geographies, driven by reduced raw material and freight costs as well as favorable changes in product mix, 

• Improved inventory positions, most notably in North America and Western Europe, which drove a shift in mix from discounted close-out to higher margin in-line sales, and 

• Growth of NIKE-owned retail as a percentage of total revenue, across most NIKE Brand geographies, driven by an increase in both new store openings and comparable store sales. 

Together, these factors increased consolidated gross margins by approximately 160 basis points for fiscal 2010. These increases were partially offset by the impact of unfavorable currency exchange rates, primarily affecting our Emerging Markets and Central & Eastern Europe geographies. 

Selling and Administrative Expense 

Fiscal 2011 Compared to Fiscal 2010 

In fiscal 2011, the effect of changes in foreign currency exchange rates did not have a significant impact on selling and administrative expense. 

Demand creation expense increased 4% compared to the prior year, primarily driven by a higher level of brand event spending around the World Cup and World Basketball Festival in the first half of fiscal 2011, as well as increased spending around key product initiatives and investments in retail product presentation with wholesale customers. 

Operating overhead