Nike’s (NKE) recovery in North America gathered steam in the second quarter when the sneaker maker registered double-digit revenue growth, aided by its digital transformation initiatives. Both the top-line and earnings beat estimates, sending the stock higher in the after-hours trading Thursday.
Revenues moved up 10% to $9.4 billion in the second quarter and came in above Wall Street estimates, with all the geographical regions registering growth. Nike brand revenues were higher by 14% compared to last year, and Converse revenues up 6%.
Revenues of the footwear and apparel segments rose 11% and 10% respectively during the quarter, while equipment revenues dipped 1%. In North America, where the sports apparel company witnessed a decline in demand in recent quarters, revenues rose 9%.
In North America, where the sports apparel company witnessed a decline in demand in recent quarters, revenues rose 9%
Driven by the strong top-line growth, the company’s profit rose to $847 million or $0.52 per share from $767 million or $0.46 per share in the second quarter of 2018.
“NIKE’s ambitious digital transformation is driving strong results and momentum in North America and in our international geographies. We’re incredibly energized about 2019 – with a full innovation pipeline; the most personal, responsive retail experiences in the industry; and a supply chain that’s delivering speed at scale,” said CEO Mark Parker.
During the quarter, the company repurchased 16.1 million shares for about $1.3 billion. The positive sales numbers indicate Nike is regaining its foothold in the local market. Of late, North America has been a challenging market for sportswear manufacturers and footwear companies due to the changing shopping trends and mounting competition.
Among Nike’s rivals, Under Armour (UAA) suffered significant market cap loss after some of its recently launched premium brands were not received well by consumers.
After gaining 6% over the past twelve months, Nike’s shares closed Thursday’s regular session lower. The stock, which has been on a downward spiral since last month, gained sharply during the extended trading session Thusday.