Dive Brief:

• Nike on Tuesday announced revenue of $10.7 billion for the first quarter, an increase of 7% from the year prior, according to a company press release. By brand, Nike brought in $10.1 billion, up 10% from the year-ago quarter, while revenues at Converse increased by 8% to $555 million.

• Net income rose 25% in the quarter, reaching $1.4 billion, thanks primarily to strong revenue growth and gross margin expansion, the company said. Gross margin increased 150 basis points to 45.7%, which the company attributed to higher average selling prices and margin expansion in Nike Direct.

• Selling and administrative expenses rose 9% to $3.3 billion, due to higher advertising expenses and sports marketing investments, as well as "continued investments in transformational capabilities, particularly in NIKE Direct and global operations."

Dive Insight:

Everything came up roses for Nike in Q1, with double-digit growth in sportswear apparel for the 22nd consecutive quarter, inventories rising 12% thanks to strong consumer demand, international growing 16%, digital up 42% and double-digit growth in the women's business.

Kids also had a good quarter, with footwear and apparel in that segment having its biggest back-to-school season ever, according to CEO Mark Parker. Even the weaker points of Nike's results were ultimately positive, with North America revenue growing 4%.

On a conference call with analysts, Parker pointed to strong growth in footwear and apparel, and said that despite the strong growth in the women's business, "we see great opportunity ahead, even greater than we've capitalized on to date," according to a Seeking Alpha transcript. Women's has been a focus point for Nike lately, as well as the rest of the athletics market, though the brand has struggled with some corporate culture issues related to women in the past year or so as well.

"Even though expectations were very high heading into 1Q20 earnings, [Nike] somehow managed to clear the high bar with a rock-solid print that was strong top-to-bottom," Wells Fargo analysts noted in emailed comments.

The looming shadow of tariffs didn't concern executives much either. Parker admitted that the short time frame regarding tariffs would present some challenges in Q2, but he expressed confidence in Nike to manage them, saying the brand has "a lot of levers we can work with, from sourcing to other levers."

"Historically, we've effectively navigated through excessive duties and we're confident that we'll continue to do so under the current dynamic," he said.

In terms of tech, the brand's mobile apps performed well for the quarter, executives said, and the company is beginning to extend its mobile app to work with retail partners, including Foot Locker. Over the past three years, active users across the apps have more than doubled, Parker said, commenting that members drove over 50% of the company's Nike Direct digital growth in the quarter.

The brand also gave an update on its recent Nike Fit technology, which is now available in all North America locations and "is moving quickly into Europe and Japan" with plans to launch an at-home experience through the app later this year.