While the bottom line was impressive – aided by a substantial reduction in costs – the top line growth trailed Adidas’ impressive 18 per cent growth achieved in 2016.
In the three months to February 28, Nike sales totalled US$8.4 billion, up seven per cent on a currency-neutral basis.
Of that, the Nike brand accounted for $7.9 billion, driven by 15 per cent growth in Greater China, 10 per cent in Western Europe, 12 per cent in emerging markets and 8 per cent in Japan.
Diluted earnings per share were up 24 percent and grew faster than revenue, primarily due to selling and administrative expense leverage, higher other income (net), a lower effective tax rate and a lower average share count.
Revenues for Nike-owned Converse were $498 million, up three percent on a currency-neutral basis, driven by growth in North America.
“The power of Nike’s diverse, global portfolio delivered another solid quarter of growth and profitability,” said Mark Parker, chairman, president and CEO of Nike.
“To expand our leadership and ignite Nike’s next phase of growth, we’re delivering a relentless flow of innovation through performance and style, increasing speed throughout the business and creating more direct connections with consumers leveraging digital and membership.”
Inventories for Nike, Inc. were $4.9 billion, up seven per cent compared to the prior year as a three per cent decrease in Nike Brand wholesale unit inventories was offset by increases in average product costs per unit and higher inventories associated with growth in DTC.
Cash and short-term investments were $6.2 billion, $1.1 billion higher than the prior year as growth in net income and proceeds from the issuance of debt in the second quarter of fiscal 2017 as well as proceeds from employee exercises of stock options more than offset share repurchases, higher dividends and investments in infrastructure.
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