Double-digit growth in every geography and most key categories drove another slam-dunk quarter for Nike.
The Beaverton, Oregon-based athletic giant on Tuesday reported that revenues rose 4 percent to $7.7 billion in the second quarter of fiscal 2016, compared to $7.4 billion in the same period a year ago.
If business continues as usual, the company should have no problem reaching the $50 billion in annual sales it’s promised to reach by the end of fiscal 2020.
Diluted earnings per share (EPS), meanwhile, were up 22 percent to $0.90 versus last year’s $0.74, beating estimates by Thomson Reuters analysts who had predicted $0.86.
Strong consumer demand for the Nike brand triggered a currency-adjusted 13 percent increase in second-quarter revenue to reach $7.3 billion, while worldwide futures orders for apparel and footwear scheduled for delivery from December 2015 through April 2016 were 15 percent higher than orders reported for the same period last year.
Revenues for Converse, however, were down 5 percent to $398 million, as sliding sales in Europe offset robust growth in North America.
“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,” Mark Parker, president and CEO of Nike, stated. “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.”
For the three months ended November 30, footwear revenue in North America—Nike’s largest market—was up 12 percent to $2.2 billion, while apparel sales increased 8 percent to $1.2 billion. Shoes weren’t so strong in Western Europe, though, posting a 2 percent decline to $845 million, but apparel rose 2 percent to $391 million.
Greater China reported the greatest global sales jump, with revenues increasing 24 percent to $938 million, compared to $758 million in the prior second quarter.
And despite a solid quarter of sales, even Nike couldn’t escape the pile-up caused by unseasonably warm weather. Inventories as of November 30 were up 11 percent, driven primarily by an 8 percent increase in Nike brand wholesale units.