Nike Sales Jump On Digital Gains

Nike is heading into the new year with strong results, crediting better-than-expected performance to its ongoing digital transformation.

The Beaverton, Ore.-based giant says fiscal second-quarter revenues increased 14% on a currency-neutral basis, reaching $9.4 billion, with digital sales jumping 41%.

Sales at the Nike brand rose 14% to $8.9 billion, led by double-digit growth in footwear and apparel. Revenues at Converse also gained, up 6% to $425 million, helped by a strong digital performance and increased demand in Asia.

Net income climbed 10%, to $847 million.

“We have a clear roadmap of how we stage our new platforms -- giving each one the space to shine through high-energy storytelling, then ramping up scale and choice to serve diverse consumer needs,” said Mark Parker, chairman, president and CEO, in remarks prepared for the investment community.

Sales in the Jordan division, a weak spot in recent quarters, gained in the double digits. “We’ve returned to healthy sustainable growth in North America,” Parker said.



“At the same time, we’ve continued our pace of double-digit growth internationally,” he noted, calling the launch of the Jordan 11 Concord Nike’s most successful sneaker introduction ever. “The Concord shows that the Jordan Brand yet again has the power to drive launches with incredible volume and create energy for the brand.”

The company announced plans to debut an adaptive performance platform basketball shoe in the new year, selling at $350. Parker calls the smart shoe “a major step in advancing and connecting our digital transformation to product.”

Nike also says its women’s marketing efforts are paying off, with a 20% jump in sales of both women’s footwear and bras.

And while trade tensions between the U.S. and China have escalated, Nike doesn’t seem worried, touting double-digit revenue growth there, marking its 18th consecutive quarter of gains. In last month’s Singles Day, Nike was No. 1 sport brand on Tmall, up 40% from last year.

Nike’s performance comes at a transitional time for sneaker culture. In the most recent quarter, NPD Group reports that while overall sales for the industry climbed 4%, the meaningful gains are in sport lifestyle, up 8%.

Performance footwear's sales continue to atrophy, including basketball, training, running and hiking. That slump is now in its fourth year, writes Matt Powell, NPD’s sports analyst: “With declines seen in key segments there is no evidence that performance-as-fashion will make a comeback any time soon.”

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