Nike Inc. reported both digital sales and total revenue grew in its second fiscal quarter of 2024 ended Nov. 30. Revenue grew 1% year over year to $13.4 billion, Nike said. The athletic apparel retailer did not disclose revenue from digital sales. 

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales.

Nike Digital sales grow despite challenges

Online sales grew in most regions but faced challenges from price-conscious consumers this quarter, the retailer said. Nike Digital, encompassing global sales through the retailer’s website and mobile app, grew 4% in Q2. Digital sales grew 2% in North America, Donahoe said. That’s on top of 31% digital growth in Q2 of fiscal 2023. Meanwhile, online sales grew more than three times as quickly in Europe, the Middle East and Africa, increasing 7% year over year. Digital sales grew 14% in Asia Pacific and Latin America.

Sales were bolstered by the retailer’s strongest Black Friday week ever, CEO John Donahoe told investors. Holiday sales in both digital and brick-and-mortar channels grew 10%. However, outside of major shopping events like Black Friday, consumer demand was down online, even as in-store traffic grew over the quarter.

“While Nike’s store traffic continued to grow, we saw softness in digital traffic and higher levels of promotional activity across the marketplace,” chief financial officer Matthew Friend said. “We are seeing indications of more cautious consumer behavior around the world in an uneven macroenvironment.”

The retailer is planning to keep a tight leash on promotions going forward. “We’re not going to race to the bottom on digital. We’re going to focus on prioritizing brand health and brand strength,” Friend said.

Nike Digital sales in China

Nike Digital revenue declined 22% year over year in the Greater China region, the retailer said. At the same time, total revenue in China grew 8%. The retailer faced the same problems in China as in the rest of the world, with high promotions eating into margins as consumer demand online dwindled. However, in-store traffic remained strong enough to offset some digital losses. 

Double 11 Day, also known as Singles Day, was a bright spot for digital sales in the otherwise disappointing quarter. Nike was the top sports brand on Tmall for the shopping holiday. 

Tmall is an Alibaba-owned marketplace, along with Taobao. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Tmall ranks No. 2.

Female Nike members drive sales

Nike members remain a key sales group, the retailer says of its loyalty program. Women now make up 40% of members and are poised to become a more significant portion of the total as they sign up in greater numbers. 

Female Nike members are exhibiting greater demand than members as a whole, presenting an opportunity to sell more performance and lifestyle products, Donahoe says. Nike added new lines of leggings and bras, with pieces priced above $100, a higher price point than the retailer’s regular offerings. 

“More and more women are joining our brand by purchasing these leggings. In fact, statement leggings fueled our fitness apparel growth in women’s for the quarter,” Donahoe said. He noted similar results from appealing to women in footwear through both new brands and established franchises like Air Force 1s and Dunks.

Average order value grew among members in the quarter, although Nike did not specify by how much.

For the fiscal second quarter ended Nov. 30, 2023, Nike reported:

• Revenue grew 1% to $13.4 billion, from $13.3 billion.
• Nike Digital sales grew 4% year over year.
• Gross profit grew 5% to $6.0 billion from $5.7 billion.

For six months ended Nov. 30, 2023, Nike reported:

• Revenue grew 1% to $26.3 billion.
• Gross profit increased 3% to $11.7 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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