Nike stays bullish on China as it reports higher profits

NEW YORK: Nike scored higher second-quarter profits, thanks in part to strong sales in China, where the company reported no fallout from ongoing trade tensions between Beijing and Washington.

Net income for the quarter ending Nov 30 was US$847 million, up 10.4 per cent from the year-ago period. Revenues were US$9.4 billion, up 9.6 per cent.

A key driver was China, where Nike notched a 26 per cent increase in revenues to US$1.5 billion. That was Nike’s strongest region, although sales also grew in North America and the other operating regions.

US President Donald Trump and Chinese leader Xi Jinping agreed on December to hold off on further tariffs or retaliation at least until March 1. But relations between the two countries remain brittle and many analysts are sceptical the two sides will reach a comprehensive deal by that date.

Nike has pushed ahead with new marketing programmes in China, as with the Shanghai Marathon last month, said Chief Financial Officer Andy Campion.

“While there has been uncertainty in US-China relations, we have not seen any impact on our business. We are bullish about our ability to continue to deliver strong and sustainable growth in this important market,” Campion said.

The sports apparel and footwear giant reported higher costs, in part tied to new direct-to-consumer e-commerce ventures. But the company benefited from increased profit margins from goods sold directly to consumers.

Results topped analyst expectations in both earnings per share and revenues. Shares shot up 7.2 per cent to US$72.36 in afterhours trading. — AFP