• Q2 net profit up 3% to US$469m
  • Revenues rise 18% to $5.7bn
  • Inventories surge amid rising input costs

Sporting goods giant Nike posted a narrow increase in second quarter profit, as a double-digit surge in revenues was offset by falling margins.

Nike brand revenues were up 18% in the three months to 30 November, excluding currency movements, with growth reported in every region except Japan, and in every key category except Action Sports.

However, gross margin was down 260 basis points to 42.7%, thanks mostly to higher product costs, offsetting the positive impact of increased direct to consumer sales, price increases and cost reductions.

Meanwhile, inventories were up 35% to $3.2bn, while Nike brand inventories rose 39%, with 20% of that growth attributed to strong demand and more timely deliveries from suppliers.

The other 19%, however, was due to “significantly higher product input costs”, Nike said, adding that inventories remained “broadly consistent” with pre-downturn levels.

Futures orders for Nike brand products scheduled for delivery in the December to April period totalled $8.9bn, up 13% on last year’s figure.

Nike president and CEO Mark Parker said of the results: “Our strong second quarter results demonstrate that the Nike portfolio is a powerful engine for growth.”