Although Nike Inc’s quarterly revenue and profit blew past Wall Street expectations on strong sales in China, the brand registered a lower-than-expected growth in North America, its biggest market. The world’s largest footwear maker faces intense competition from brands like Adidas , Skechers and VF Corp’s Vans in North America, even as it pushes to sell exclusive merchandise through its tap-and-buy SNKRS app and retail stores.
Nike’s revenue from North America rose by 5.3 per cent to $3.98 billion in the second quarter, compared with the previous year’s 9 per cent rise, but missed Wall Street expectations of $4 billion. The company’s gross margin of 44 per cent was also slightly below estimates of 44.1 per cent, hurt by higher product costs due to incremental tariffs in North America.
In Greater China, the fastest-growing market for Nike, its revenue rose by 20 per cent to $1.85 billion. The company recently introduced its app in the country. According to IBES data from Refinitiv, Nike’s net income jumped 31.6 per cent to $1.12 billion, or 70 cents per share, in the quarter ended Nov. 30, while analysts on average had expected 58 cents per share. Its overall revenue rose by 10.2 per cent to $10.33 billion, beating the average analyst estimate of $10.09 billion.
