Nike’s efforts to reinvigorate its business are showing some results despite continued challenges in China and with its ailing Converse brand.
Sales rose 1 percent in Nike’s most recent quarter, which ended Nov. 30, propped up by strong performance in North America, the company said on Thursday. Still, income fell 32 percent, weighed down by woes in mainland China, Hong Kong and Taiwan, where revenue fell 17 percent.
Broadly, Nike is trying to recover after a series of missteps led to a lengthy sales slump and lost market share. The company, based in Beaverton, Ore., had leaned into lifestyle product lines and lost ground in performance sectors such as running.
China has been a sore point for Nike in recent quarters. Nike executives previously told investors that a revival in China would require both time and investment.
Nike’s chief executive, Elliott Hill, who came out of retirement to take the job last year, has been working to clear out old inventory and jump-start product development, especially for performance shoes. He has also reorganized the company’s corporate structure and replaced many top executives.
Mr. Hill said that Nike must “reset” its approach in China, beginning with investments in Beijing and Shanghai, and that it would change its product assortment in the marketplace.
“What we’ve done is a start, but it’s not happening at the level or the pace we need to drive wider change,” he told investors during a Thursday conference call.
The results in North America signal that Nike has made significant progress in its turnaround.
“It would seem like Nike is accelerating its growth,” said Simeon Siegel, an analyst at Guggenheim Securities. “They’re selling more things and getting people to buy more.”
Yet tariffs have hindered Nike’s progress. The company expects tariffs to add $1.5 billion to its costs and reduce its gross margin for its current fiscal year. To cope with higher costs, Nike has raised some prices of its sneakers, apparel and equipment.
Mr. Hill has been careful in setting expectations, telling investors in September that the turnaround’s progress “won’t be perfectly linear.”
Nike’s Converse label also remains troubled. Sales fell 30 percent, declining across all regions. Management is resetting the brand’s Chuck Taylor line, its most popular shoe.
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