Nike profits soar in Q2

Sportswear brand Nike says sales rose four per cent in the second quarter – but profit soared 20 per cent.

The company says strong consumer demand drove revenue growth across the entire Nike brand portfolio and improved gross margins led to the profit boost during the three months to November 30.

“Our strong Q2 growth and profitability show that Nike continues to drive real momentum through the category offense – by going deep with consumers by sport and serving them completely,” said Mark Parker, president and CEO.

“And our powerful global portfolio of businesses, combined with strong financial discipline, continue to drive significant shareholder value. We see tremendous opportunity ahead as we enter an Olympic and European Championships year with a full pipeline of inspiring innovation for athletes everywhere.”

Revenues totalled US$7.7 billion, up 12 per cent on a currency neutral basis. Of that, the Nike brand accounted for $7.3 billion, up 13 per cent, driven by double-digit growth in every geography and most key categories.

Revenues for Converse were $398 million, down five per cent on a currency neutral basis, as strong growth in North America was more than offset by a decline in Europe

Gross margin increased 50 basis points to 45.6 per cent, primarily due to higher average selling prices, partially offset by higher product input costs and unfavorable changes in foreign exchange rates.

Net income increased 20 per cent to $785 million.