Nike Inc. beat Wall Street estimates for quarterly revenue on Tuesday, as persistent demand for its sneakers and sportswear in North America and Europe helped offset a sales slump in China, its most profitable market.
Shares of the company rose about 7% in extended trading.
Nike reported a sales jump of 30% in North America, its largest market, while its China business posted a 3% decline after COVID-related restrictions in the country hurt sales in the region.
Analysts have said the company's efforts to offer steeper discounts and increase promotional activity in an attempt to get rid of excess inventory may help Nike boost sales and attract recession-wary shoppers.
However, the company's profit margins were pressured by a stronger dollar, higher freight and logistics costs, as well as higher markdowns to clear excess inventory.
The Beaverton, Oregon-based company's gross margins decreased 300 basis points to 42.9%, while net income for the reported quarter was flat on a year-over-year basis.
The world's largest sportswear maker's revenue rose 17% to $13.32 billion for the second quarter beating analysts' estimates of $12.57 billion, according to IBES data from Refinitiv.
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