What drove Nike's operating income growth in Q2 2024?

Nike's operating income growth in Q2 2024 was driven by several key factors:

1. Revenue Growth: Nike's revenue grew by 1% on a currency-adjusted basis, reaching $51.4 billion for the fiscal year 2024, with Nike Brand contributing 96% of the total revenue. This growth was primarily driven by strong performance in the Performance products category, which saw double-digit growth in many key sports.
2. Operating Margin Improvement: Nike's operating income grew by 0.28% to $1.25 billion in Q2 2024, up from $1.6 billion in the previous quarter. This improvement was due to effective cost management, which led to a reduction in the cost of sales and operating expenses. Strategic pricing actions and lower logistics costs also contributed to the expansion of gross margin.
3. Digital Leadership and Direct-to-Consumer Strategy: The company's digital leadership and Consumer Direct Acceleration strategy were significant tailwinds, driving growth in NIKE Direct revenues. Strong member buying trends and a record digital performance in the quarter underscore the success of these strategies.
4. Regional Growth: Nike experienced strength in key regions such as North America, EMEA, and APLA, fueled by increasing traffic, higher conversion rates, and growth in average order value. This regional growth was supported by robust product innovation and compelling marketing efforts.

In summary, Nike's operating income growth in Q2 2024 was driven by revenue growth, operating margin improvement, strategic digital and direct-to-consumer initiatives, and regional expansion efforts. These factors collectively contributed to the company's sustained business momentum and profitability.