Nike improves its outlook following progress with its inventory issues

Nike Inc. increased its revenue forecast and reported that its inventory issues are improving. This demonstrates that the sneaker giant's efforts to eliminate excess inventory through discounts are beneficial to the business.

The company said that its second-quarter sales were up 17% from the same time last year, but its profits were about the same. This was better than expected, and after-hours trading sent shares up more than 11%.

Nike expects its full-year sales to go up by a percentage in the low teens, excluding the effects of currency fluctuations. This is a higher growth rate than it predicted in September, when it said sales would go up by a rate in the low double digits. Executives say that the most optimistic prediction is based on what Nike has seen from customers from August through the first two weeks of December.

Analysts have been monitoring Nike and other retailers for inventory reduction progress as many consumers have shifted discretionary spending in response to inflation's impact on their budgets. Executives said that demand has been high, but the company knows that consumers are still having trouble with their finances.

Nike reduced its first-quarter inventory levels, but they remain elevated. The company reported that the value of its inventory for the quarter ending November 30 was $9.3 billion, up 43% from the previous year.