Nike reported second-quarter 2019 earnings of $10.33 billion, beating analyst expectations of $10.09 billion. The company noted that growth in its Jordan brand allowed for the sports apparel provider to exceed projections for the quarter.
According to CNBC, the company revealed in a statement that its Jordan brand reached $1 billion in sales during Q2, marking the first time any of Nike brands achieved the said volume of sales.
The growth in sales was attributed to the increased number of customers who visited both the Nike website and physical stores to purchase limited-edition Jordans. On the other hand, the earnings beat was also attributed to more consumers patronizing sports apparel through the website.
"I've never been more optimistic about the future of this company," CEO Mark Parker said, despite Nike shares dropping by over 2 percent in Thursday's after-hours trading. Analysts said the slump in shares may have been due to news of North American revenue coming in at lower figures than expected.
While North American sales didn't record notable growth, the company's Black Friday sales jumped by around 70 percent in the said region. Industry experts were also expecting up to $4 billion in sales but revenue only reached $3.98.
Growth in revenue during the second quarter was not expected to beat expectations, especially after Nike announced in October that Parker will be replaced by John Donahoe next year as the CEO.
Meanwhile, industry analysts noted that Nike's progress during the the second quarter is also thanks in part to the company's growth in the massive Chinese market.
According to the Financial Times, sales in China reached $1.85 billion during Q2. While sales in North America was still much higher than in the Chinese market, the latter has shown significant interest in the company.
Some analysts said Nike's efforts in reaching out to Chinese consumers helped boost the company's growth in the world's second-largest economy. Among the said strategies that the athletic apparel company used is the launching of an app exclusively developed for customers in China.
The said app is available for download from Android and iOS app stores. It also immerses customers through personalized settings, while encouraging consumers to have a more healthy and fit lifestyle.
Nike global vice president and general manager for the Greater China area, Dong Wei, noted that the Chinese consumer market has shown great potential and digital consumption has higher development compared to other regions.
Nike has had some ups and downs over the past few months but it is expected to keep experiencing good growth over the next months, especially with economists starting to raise their outlooks on the Chinese economy.
