Revenues from continuing operations grew 7.4 percent, to $5.96 billion from $5.55 billion, and were up 10 percent on a constant currency basis. Nike’s closely watched futures-orders metric stood at $9.3 billion, up 6 percent.
Gross margin contracted 30 basis points to 42.5 percent of sales, as favorable pricing and raw-material costs were offset by higher labor costs and currency fluctuation.
Shares advanced $1.22, or 1.3 percent, to $99 during the trading day and rose another $5.15, or 5.2 percent, to $104.15 following the disclosure of results.
The Nike brand’s footwear and apparel businesses registered similar sales increases, with footwear up 6.7 percent to $3.3 billion and apparel ahead 7.2 percent to $1.8 billion. North America, the brand’s biggest market, generated the largest increases in both sales and profitability, with sales expanding 17.2 percent to $2.42 billion and operating income moving up 30.5 percent to $556 million.
Mark Parker, president and chief executive officer, told participants on an early evening conference call, “In North America we created great momentum. This is somewhat counterintuitive to some, given this market’s size and assumed maturity. But I see tremendous growth opportunity in North America fueled by continued success in transforming the marketplace along category lines.”
Charlie Denson, president of the Nike brand, cited double-digit growth in running, basketball and men’s training for the successful North American performance. Also contributing to the strong showing was Nike’s launch of National Football League merchandise. “We delivered a new level of performance and style for every player in the NFL,” he said.
In China, the only market to experience sales or profit declines, sales pulled back 11.2 percent, to $577 million, while operating income slid 15.9 percent to $185 million. Donald Blair, chief financial officer, said on the company call that gross margin in China improved “as the impact to clean up the [distribution in the] market was more than offset by the benefits of higher prices and easing raw-material costs.” He noted other positive signs in China — including lower inventory levels, improving comparable-store sales and higher apparel sell-throughs — as the company works to better tailor its assortments and marketing to the Chinese market.
“That said, we still expect lower revenue and [earnings before interest and taxes] from this geography over the next few quarters as we work to position our business to realize [its] tremendous growth potential,” Blair said.
For the first half of the year, net income, including discontinued operations and associated costs, fell 14.6 percent to $951 million, or $2.07 a diluted share, as revenues rose 8.7 percent to $12.43 billion. The discontinued Umbro and Cole Haan operations are excluded from revenue figures.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye