Nike reports sales beat overshadowed by Converse, China slumps

NIKE posted better-than-expected sales in the latest quarter, showing progress in its turnaround efforts, but weakness persisted in China and the Converse brand.

Revenue in the fiscal second quarter rose 1 per cent to US$12.4 billion, above the average of analyst estimates. Earnings per share also outpaced expectations. Direct-to-consumer sales missed expectations, however.

The shares fell 5 per cent at 4.32 pm in extended trading in New York. The stock has dropped 13 per cent so far this year and is headed for its fourth consecutive annual decline.

Nike is sharpening its focus on key sports and cities, while also rebuilding its ties with retail partners, in order to recapture growth and win back investors and consumers.

The company is regaining momentum, but management still faces questions about Converse, which declined 30 per cent in the period, and China.

This quarter, chief executive officer Elliott Hill said the company is “making progress in the areas we prioritised first and remain confident in the actions we’re taking to drive the long-term growth and profitability of our brands.” BLOOMBERG

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