For its second quarter, Nike, Inc. said, reported revenues were 11.4 billion dollars, up 1 percent compared to prior year and flat on a currency-neutral basis due to the ongoing impact of supply chain challenges across the marketplace. The company said in a release that Gross margin increased 280 basis points to 45.9 percent, while diluted earnings per share for the quarter was 83 cents, up 6 percent.
Nike direct sales were 4.7 billion dollars, up 9 percent on a reported basis and up 8 percent on a currency-neutral basis. Nike brand digital sales increased 12 percent, or 11 percent on a currency-neutral basis, led by 40 percent growth in North America.
“Nike’s strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment. We are now in a much stronger competitive position today than we were 18 months ago,” said John Donahoe, president and CEO, Nike, Inc.
Highlights of Nike’s Q2 results
The company added that revenues in Greater China and APLA declined, largely due to lower levels of available inventory resulting from Covid-19 related factory closures. While closures had an impact across the company’s portfolio, North America and EMEA delivered growth due to higher levels of in-transit inventory entering the second quarter.
Despite continued inventory constraints and supply chain challenges, Nike direct grew 8 percent, led by North America Direct growth of 30 percent, including record Black Friday week results.
Nike brand digital delivered strong revenue growth of 11 percent, led by double-digit growth in North America and APLA, partially offset by a decline in Greater China. Contributing to Nike direct growth was the steady normalization of owned physical retail with Nike owned stores up 4 percent.
Revenues for the Nike brand were 10.8 billion dollars, flat to prior year on a currency-neutral basis, driven by Nike direct growth, offset by lower revenues in the wholesale business. Revenues for Converse were 557 million dollars, up 16 percent on a currency-neutral basis, led by strong performance across all channels in Europe and North America.
Net income was 1.3 billion dollars, up 7 percent and diluted earnings per share were 83 cents, increasing 6 percent.
In the second quarter, Nike returned approximately 1.4 billion dollars to shareholders, including dividends of 437 million dollars, up 14 percent from the prior year.