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.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)