Dive Brief:

• Nike Inc. wowed investors with a 23% jump in Q3 profits, aided mightily by sales in China.

• Sales rose 5% to $8.41 billion, or 14% excluding currency fluctuations. Sales in China rose 30% to $886 million.

• Lingering effects of last year’s delays at West Coast ports have led to a 10% rise in inventories in North America, which it partly attributed to buildup from the port slowdowns last year. Clearance of this excess inventory could tamp down margin growth for the next two quarters, the company said.

Dive Insight:

Nike is facing stiff competition these days. Rivals Under Armour and Adidas are benefiting from the current spikes in sportswear sales to people who aren’t necessarily athletes — the so-called athleisure movement, as are other apparel companies that don’t usually compete in the space. And its footwear, long a reason for Nike’s dominance, is being challenged by Under Armour — which has increasingly attracted big-name athletes and teams, and has demonstrated a fair amount of swagger about its ambitions. 

But Nike remains dominant and is happy, as it should be, about its performance in China, despite economic headwinds there. The truth is, China continues to see healthy growth economically, if not the significant growth of recent years. And its urban population includes a healthy middle class consumer base.

“While we are very mindful of the macroeconomic volatility in China, our brand has never been stronger and our marketplace has never been more healthy,” CFO Andrew Campion said in his first earnings call.