(Reuters) -Nike on Tuesday reported a surprise rise in first-quarter revenue and beat expectations for quarterly profit as the sportswear giant rebuilds its presence at wholesalers and CEO Elliott Hill's turnaround efforts take hold.
Its shares were up about 3% in extended trading. They have fallen about 8% so far this year
The company's first-quarter revenue rose 1% on a reported basis to $11.72 billion. Analysts had expected a fall of 5.1% to $11 billion, according to data compiled by LSEG.
Nike,
for years synonymous with sports culture, is trying to rediscover its identity after a string of weak quarters.
It has lost market share to younger rivals such as On and Deckers' Hoka, which are increasingly seen as more exciting, while demand in major markets - especially China - has been choppy.
CEO Hill, who took the reins last year, has vowed to refocus the brand around core sports like running, and to producing the kind of cutting-edge products the company had been known for.
The company also launched its much anticipated women's athleisure line NikeSkims in partnership with Kim Kardashian's brand this month, as it takes on competitors such as Lululemon.
Investors have also been closely watching the companies efforts to trim inventories. For the first quarter, the company reported inventories down about 2% year-over-year. However, Nike noted that it was seeing some impact from higher tariffs in North America, which was leading to higher product costs.
The company's gross margin for the quarter ended August 31 decreased 320 basis points to 42.2%, compared with a 440 basis points fall in the preceding three-month period.
Nike reported first-quarter earnings per share of 49 cents, compared with analysts' average estimate of 27 cents.
(Reporting by Juveria Tabassum in Bengaluru and Nicholas P. Brown in New York; Editing by Devika Syamnath)
