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Nike’s shares were down about 2 per cent in extended trading, as the company continues to see pressure from tariffs.Carlo Allegri/Reuters
Nike on Thursday edged past market expectations for quarterly revenue, helped by resilient demand for its running shoes amid a big marketing push to fend off stiff competition from upstart brands in North America.
The company expanded its exposure to wholesalers and refreshed its product lines to focus on categories such as running and basketball, to reclaim its sporting roots under CEO Hill’s extensive turnaround plan.
Executives noted in September that Nike’s recovery would not be linear, as consumers have turned increasingly picky about spending big bucks on non-essential items with tariffs and inflation squeezing their budgets.
Nike’s shares were down about 2 per cent in extended trading, as the company continues to see pressure from tariffs and its efforts to clear out aged inventory on its gross margins.
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The company’s gross margin for the quarter ended November 30 fell 300 basis points, compared with a 320 basis points fall in the preceding three-month period.
The need to stay relevant through sleek marketing campaigns and innovation in its product lines has become more pressing for apparel makers.
Nike has been investing in introducing product lines such as its NikeSKIMS partnership with Kim Kardashian’s brand, as well as announcing a motorized footwear system to help casual athletes and mobility-impaired people move faster.
Increasing its exposure at wholesalers has also hit margins, even though the company has been introducing fresher, higher-priced products at its direct-to-consumer channels.
The company reported second-quarter revenue of US$12.43-billion, compared with analysts’ average estimate of US$12.22-billion, according to data compiled by LSEG.
