Nike Inc (NYSE: NKE), the world's largest manufacturer of sports clothing and footwear, reported a better-than-expected quarterly revenue and profit, and pointed to a recovery in the basketball category of goods.
"We have seen incredible momentum in basketball, I want to say that basketball is back," - said the Nike president, Trevor Edwards, on a conference call.
According to him, the company expects its basketball business return to growth in the second half of the fiscal year, which ends in May 2017.
The share of basketball goods had 5.1% of total revenues from wholesale sales, which reached $27.23 billion during the fiscal year ended in May 2016.
Nike expects a growth in annual revenue by 7-9%, noting that orders for the company's products, an indicator of future sales, excluding currency fluctuations, increased by 2%.
In the second half of the year, the company is waiting for the continuation of growth in North America, its largest market, along with a return to growth in gross margin and the reduction of inventories.
Nike sales in North America rose 3% to $ 3.65 billion in the second quarter, which ended on November 30.
Sales in China during this period rose 12% to $ 1.06 billion. Excluding the impact of changes in exchange rates, sales in the region jumped by 17%.
At the same time, gross margin decreased by 140 basis points to 44.2 percent, due to the increase in production costs, the strengthening of the US dollar and the increase in sales of goods at reduced prices.
The net profit rose 7.3% to $ 842 million, or 50 cents per share, in the three months to November 30.
Analysts polled by Reuters on average had expected a profit of 43 cents per share.
Commercial and administrative expenses decreased by 2% to $ 2.51 billion.
The revenue increased by 6.4% to $ 8.18 billion, higher than the forecasts at $ 8.09 billion.