On December 21, 2023, Nike released its financial report for the second quarter of the 2024 fiscal year. In this quarter, Nike achieved a revenue of $13.4 billion, a year-on-year increase of 1%. The gross profit margin increased by 170 basis points to 44.6%, and inventory decreased by 14%.
Nike Group President and CEO Tang Ruoxiu stated that Nike's second quarter performance demonstrated how it has steadily developed in key areas of innovation and growth, demonstrating the strong execution power of the Nike team. They focus on innovative products, unique brand stories, and differentiated market experiences as the key to victory.
This quarter, as the popularity of large-scale sports events, marathons and other national sports continues to rise, the overall sports consumption market shows a trend of recovery and improvement. Nike is making dual efforts both online and offline in the Chinese market, and continues to lead key tracks including running and basketball. During the reporting period, the revenue reached 1.863 billion US dollars, a year-on-year increase of 8% on the basis of unchanged exchange rates. Nike's revenue in Greater China has continued to grow for five consecutive quarters, continuing Nike's sustained and stable performance in the Chinese market.
Key tracks continue to lead
Nike started with running, which has always been one of Nike's core businesses and an important driving force for its development. Nike is constantly committed to supporting the development and progress of running in China, and focuses on a wider range of athletes and the future, helping Chinese runners run faster and better.
Nike invited legendary marathon runner Erud Kipchaug to embark on a trip to China in October, visiting the gathering places of runners in Beijing and Shanghai, interacting closely with elite coaches, folk running groups, and more young runners, injecting new vitality into Chinese running culture. Along with Kipchak's trip to China, Nike's collaboration with Kipchak to launch the EK Umoja Collection series of products has also received much attention.
In November, after a three-year hiatus, "Getting Rid" returned to Nike for the 12th consecutive year, calling on more runners to participate in urban marathons and running sports, once again providing high-quality professional services and products for every participant. Nike has also achieved multiple impressive results in "getting on the horse", including: Nike running shoes ranking first in the wearing rate of all participating runners and the top 100 runners in the horse in terms of wearing rate; Nearly 40% of the runners are wearing Nike running shoes.
In addition, Nike Vaporly running shoes dominated the top three in the women's group, Nike athlete defending champion Zhang Deshun won the domestic women's group championship, and Nike's first signed mother track and field athlete Ding Changqin won the runner up in the domestic women's group.
Nike has also been a leader in the basketball market. In the second quarter, Nike further highlighted the brand's unique competitive advantage and leading position in the basketball field through continuously increasing innovative products and diverse consumer experiences. In October, Nike's "Only Basketball" event attracted over 200000 basketball enthusiasts online and offline to participate in interactive activities, showcasing the unlimited influence of Nike basketball.
Collaborate online and offline efforts
This quarter, Nike has made joint efforts both online and offline to grasp the recovery momentum of the sports market and the trend of consumers gradually returning to offline. This year's "Double Eleven", Nike continued to maintain a strong momentum, winning the top spot on the Tmall Sports Brand Sales List for nine consecutive years and the top spot on the other seven lists. With the further upgrade of the Nike Membership Promotion Program, the emotional bond between the brand and consumers has been further strengthened. Compared with the same period last year, the average consumption per member has increased by over 30%.
In addition to traditional e-commerce, Nike has shown outstanding growth in content social and private channels, with nearly 4000 products presented through short videos and live streaming. The sales of live streaming on the entire platform have achieved double-digit growth year-on-year. In terms of offline retail, Nike achieved dual growth in sales and participation during the Double Eleven period.
With the return of offline consumption, offline sales in Greater China have achieved double-digit growth. Nike is also accelerating the implementation of its "Internet Membership Solution" and working with partners to enhance the offline shopping experience. As of the end of this fiscal quarter, over 500 partner stores in over 130 cities have joined Nike's membership system. At the same time, Nike has partnered with local partners to further expand and upgrade the digital ecosystem, continuously promoting the integration and innovation of e-commerce and physical retail.
Both online and offline efforts, market performance continues to improve
Continuous optimization of localization and innovation capabilities
At this year's CIIE, Nike announced that it will build a Nike Sports Research Laboratory at its Greater China headquarters in Shanghai in 2024, which can combine sports science with Nike's existing capabilities, such as regional product design and local digital consumer experience, to make Nike more closely connected with consumers.
In addition to emphasizing the improvement of product performance through innovation, Nike also carefully listens to the voices of Chinese consumers, using product design and ingenuity to help consumers release their personality and express themselves. In October, Nike held a Culture of Apparel event, showcasing the potential of Nike's new season of clothing products in terms of styling and style display, combining the needs of local consumers. The event showcased Nike warm winter equipment designed for winter and Nike street dance exclusive series inspired by the new generation of dancers, meeting the personalized needs of consumers from multiple circles. Through continuous innovation, it gained the attention and recognition of consumers.
The Local Product Fast Track (GEL) is also an important way for Nike to further transform its insights from the Chinese market into innovative products and services. In the second quarter, Nike also achieved a rapid response to local market demand through the local product fast track, launching innovative products including the latest street dance series, and the market response was enthusiastic.