Nike has reported better-than-expected quarterly revenue and profit, fueled by higher demand across markets such as Western Europe and Greater China and lower costs. Sales in North America, its biggest market, rose three per cent in the second quarter ended November 30. Sales in Greater China rose 12 per cent in the latest quarter. Excluding the impact of currency changes, sales in the region jumped 17 per cent. Net income rose 50 cents per share in the three months ended November 30 from 45 cents per share a year earlier.
Selling and administrative expenses fell two per cent. Revenue rose 6.4 per cent. However, gross margins contracted 140 basis points to 44.2 per cent, due to increased product costs, a strong dollar and higher off-price sales. Nike has been facing intensifying competition from rivals such as Under Armor and Adidas in North America.
A resurgent Adidas has been chipping away at Nike’s dominant position through its popular Yeezy collection designed by rapper Kanye West. Nike’s basketball category has come under pressure from Under Armor's NBA-star Stephen Curry’s signature shoe line.
Nike is the world’s largest athletic apparel and gear maker. Nike’s gear is widely seen on courts and running trails, but the brand also has remained on-trend as part of the growing consumer interest in athleisure — a term that describes the growing acceptance of wearing athletic apparel and shoes just about anywhere.