Nike Q2 results soar past expectations

The world’s largest sportswear company posted its third consecutive quarter of growth as it toppled sales expectations.

Nike achieved $9.37 billion (£7.39 billion) in overall sales, comfortably ahead of analyst estimates of $9.18 billion (£7.24 billion) for the quarter.

The brand and retailer also said earnings per share and gross margins outperformed expectations.

In the second quarter ending November 30, Nike’s namesake brand saw a 14 per cent increase in constant currencies, reporting revenues totalling $8.9 billion (£7.02 billion). 

The brand attributed its progress to the strengthening of its digital channels and its direct-to-consumer approach, as well as accelerated growth across all geographies and in Nike Direct.

Back in June, Nike announced a major overhaul of its business to reduce its reliance on third-party brick-and-mortar retailers, in a bid to sell directly to more consumers.

Gross margins rose 80 basis points to 43.8 per cent during the quarter, with the higher selling prices more than helping to offset rising input and transport costs.

In June, Nike also revealed plans to reduce the number of items it sells by 25 per cent in order to speed up product development and cut the lead time needed to get new items on the shelves. 

The efforts saw sales up nine per cent to $3.78 billion (£2.98 billion) in Nike’s North American market.

Europe and Greater China, Nike’s next two biggest markets by revenue, also turned a strong performance, rising eight per cent and 26 per cent respectively to $2.31 billion (£1.82 billion) and $1.54 billion (£1.21 billion).

“Nike’s ambitious digital transformation is driving strong results and momentum in North America and in our international geographies,” Nike chief executive Mark Parker said.

“We’re incredibly energised about 2019 – with a full innovation pipeline; the most personal, responsive retail experiences in the industry; and a supply chain that’s delivering speed at scale.”

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