Nike (NYSE: NKE) reported second-quarter earnings that surpassed Wall Street expectations and consequently raised its outlook. The company’s shares rose over 10% during after-hours trading amid the news.
The multinational corporation reported earnings of USD0.85 per share, compared to the expected USD0.64 a share. Revenue amounted to USD13.32 Billion, higher than analysts anticipated USD12.57 Billion.
“NIKE’s results this quarter are a testament to our deep connection with consumers,” said John Donahoe, President, and CEO, of NIKE, Inc. “Our growth was broad-based and was driven by our expanding digital leadership and brand strength. These results give us confidence in delivering the year as our competitive advantages continue to fuel our momentum.”
Inventories rose 43% to USD9.3 Billion within the quarter, in comparison to the previous year. The excess merchandise caused aggressive markdowns, which helped reduce Nike’s gross margin to 42.9% from 45.9% a year earlier.
According to Executive Vice President and Chief Financial Officer, Matthew Friend, said, “Consumer demand for NIKE’s portfolio of brands continues to drive strong business momentum in a dynamic environment. We remain focused on what we can control, and we are on track to deliver on our operational and financial goals — setting the foundation for sustainable, profitable growth.”