Nike's second quarter earnings show revenue growth amid uncertainty for retailers
Shares of the Nike grew by 10% during off-hour trading
Rosecliff founder and managing partner Mike Murphy joined 'Varney & Co.' to discuss why he chose to invest in the latest selloff.
Nike released its quarterly earnings on Tuesday that showed the retail giant exceeding Wall Street expectations with growing revenue despite investor fears of an oncoming recession.
The athletic retailer was able to clear a significant amount of its previously reported inventory, and shares of Nike increased by over 10% during off-hour trading.
Overall revenue for the second quarter had grown by 17% to $13.3 billion compared to the same time last year. Moreover, revenues had increased by 27% on a currency-neutral basis.
Net income for the period that ended Nov. 30 stood at $1.33 billion at $0.85 per share, which was similar to the prior year of $1.34 billion at $0.83 per share.
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Nike beat prior Wall Street expectations with growing revenue in the second quarter amid global economic uncertainty. (Carlo Allegri REUTERS/Carlo Allegri/File Photo / Reuters Photos)
"Nike's results this quarter are a testament to our deep connection with consumers," said John Donahoe, president and CEO of Nike, in a statement. "Our growth was broad-based and was driven by our expanding digital leadership and brand strength."
Donahoe added, "These results give us confidence in delivering the year as our competitive advantages continue to fuel our momentum."
The company's direct sales had increased during this period by 16% to $5.4 billion while growing by 25% on a currency-neutral basis. Digital sales also increased by 25%.
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Diluted earnings per share for the second quarter also slightly increased by 2% to $0.85. However, the company's gross margin fell by roughly 300 basis points to 42.9%.
Nike's inventories had increased by 43% to a total of $9.3 billion compared to the same period last year.
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