Nike’s Global Sales Climb on Strong Demand for Athletic Wear

(Bloomberg) -- Nike Inc. is on the comeback as sports leagues and events resume in the U.S. and Europe reopens for business, driving renewed demand for its sneakers and apparel.

The athletic-wear maker posted sales growth across regions last quarter, boosted by record revenue in North America. Global sales almost doubled to $12.3 billion in the period ended May 31, the company said Thursday in a statement. That beat analysts’ expectations.

The shares rose 4.9% as of 5 p.m. after regular trading in New York. The stock was down 5.6% this year through Thursday’s close.

The boosted sales aren’t just a sign the retailer has moved past pandemic challenges. They’re also indicative of Chief Executive Officer John Donahoe’s push to radically cut down on wholesale distribution by eliminating many of its retail partners in favor of more lucrative direct-to-consumer sales. That’s led to a rise in sales for its Nike Direct division, which spiked 73% in the latest quarter. It has also ushered in improved margins.

“We are building a new financial model that will continue to fuel long-term sustainable, profitable growth,” Matt Friend, Nike’s chief financial officer, said in the statement.

North America had previously been a problematic market for Nike, hindered by supply-chain issues that kept products from reaching consumers. Some of those delayed shipments were bumped into this quarter, aiding wholesale revenue as U.S. states eased virus-related restrictions and many sporting events returned in full.

At the same time, Nike’s sales growth in Greater China, which had until recently led the company’s revival, is starting to cool off. The revenue climbed just 17% -- and less when excluding currency swings -- to $1.93 billion, missing analysts’ expectations of $2.25 billion. The results may reflect the impact of boycotts of Nike and other brands over corporate statements on forced labor related to cotton production in the Xinjiang region.

Meanwhile, store closures persisted in Europe, the Middle East and Africa throughout the period. But Nike has been able to reopen almost its entire network, with 99% of stores in the region now fully operational or open with reduced hours.

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