Nike reported fiscal second quarter net earnings of $1.3 billion, or $0.85 a share, compared with analyst estimates of $0.64 a share. Revenue was $13.3 billion, up 17% from a year ago and ahead of expectations of $12.6 billion. In a conference call with analysts, CFO Matthew Friend said he expects annual revenue to grow in the “low teens” this year.
Also in the conference call, CEO John Donahoe noted a rebound of business in China and improving inventory levels because of strong consumer demand. However, higher costs squeezed margins for Nike, and while inventories rose on an annual basis, they declined from the previous quarter.
Nike sales in China, its third-largest market by revenue, dropped by 3% compared to last year, as the country contends with lingering pandemic lockdowns and a slowdown in retail spending. Nike said direct sales were up 16% for the quarter, while digital sales rose 25%.
Shares of Nike are down about 38% year-to-date.