Demand may be down in general, but people are still spending at Nike.
The athletic wear retailer said Tuesday that revenues were up 8 percent to $9.1 billion for the first quarter ended Aug. 31, thanks largely to strong global demand and good growth in the North American market.
“Fueled by an incredible summer of sport, Nike delivered strong global growth and led the industry through disruptive innovation,” company chairman, president and CEO Mark Parker said. “We’re amplifying every category through sports style innovation, transforming retail by connecting the digital and physical experience and ushering in a new era of personalized performance—through product, consumer connections and our supply chain.”
Revenues for the company’s namesake brand jumped 10 percent to $8.5 billion, thanks to double-digit growth in markets like China, Europe, Japan and emerging markets. Sportwear, running gear and Jordan Brand products led the charge.
At Converse, a Nike subsidiary, revenues were up 4 percent to $574 million due mainly to growth in North America.
Earnings per share for the quarter were up 9 percent to 73 cents, which Nike attributed to the strong revenue growth, operating overhead leverage and a lower effective tax rate, among other factors.
Nike did take a hit on margin, however, reporting a 200 basis point fall in gross margin to 45.5%, which it blamed on higher average selling prices that were offset by foreign exchange effects, a higher off-price mix and the impact of getting out of the golf equipment business.
The retailer was holding 11 percent more inventory at the end of the first quarter than at the same time last year, which according to Nike is because of a 3 percent increase in Nike brand wholesale inventory, higher average product costs per unit and growth in its direct to consumer business.