Nike sprints ahead as sales defy China economic slowdown

China sales rose by 30 percent year over year in Nike’s first quarter ending in August, up from 18 percent growth in the previous quarter. This marked the company’s ninth straight quarter of better-than-expected profits.

Profit increased 23 percent to $1.2 billion while diluted earnings per share increased 23 percent to $1.34, reflecting strong revenue growth, gross margin expansion, selling and administrative expense leverage, a lower tax rate and a decrease in the weighted average diluted common shares outstanding. Sales rose 14 percent to $1.64 billion in Western Europe and 26 percent to $401 million in Central and Eastern Europe.

The economy of China is now experiencing its weakest growth in 25 years.

China’s stock markets may still be falling, but sales of Nike trainers in the world’s second biggest economy are booming.

Edwards said that “throughout the first quarter, athletes like LeBron James, Kobe Bryant, Anthony Davis and Paul George all participated in Nike basketball events throughout China, connecting with thousands of consumers through their shared passion for the sport”.

“While we are very mindful of the macroeconomic volatility in China, our brand has never been stronger and our marketplace has never been more healthy”, said Andrew Campion in his first earnings call as Nike’s chief financial officer. It also gained a pull from young customers through social media and mobile apps.

What is reportedly helping Nike is their investment in product innovation and collection of feedbacks and data from customer’s activities.

The most significant growth came from China and Japan. Sales of footwear in the region surged 36 per cent and overall sales rose 30 per cent.

Futures orders for footwear and apparel scheduled for delivery from September 2015 through January 2016 were 9 percent higher than orders reported for the same period past year, and 17 percent higher on a currency-neutral basis.