Some of the original Chuck 70 issues.
Nike’s rather chill Converse brand has surprisingly sprung back to life in the face of surging demand for athletic and fashion-focused sneakers.
And it’s really all because of one sneaker. The stylish, yet somewhat pricey Chuck 70.
Nike (NKE) said Thursday evening that Converse sales surged 15% in the fiscal 2020 second quarter, fueled by double-digit growth in Asia and Europe. The sales pop marked a second consecutive quarter where sales for Converse grew at a faster rate.
Talk about a reversal in fortunes.
Converse sales in fiscal year 2019 were unchanged year-over-year with declines in the U.S. and China as the brand battled a consumer shift to athletic centric sneakers. The brand represents about 5% of Nike’s overall business.
“We've got some real momentum within the chuck franchise, in particular driven by a style called the Chuck 70, which is growing really strong double to triple digits in all geographies. In fact, it's already a pretty significant percent of total chuck business in markets like China and elsewhere and it's ramping up quickly in the U.S,” Nike Chief Financial Officer Andy Campion told analysts on a conference call.
The momentum with a cooler version of the classic Chuck Taylor now has Nike thinking about expansion opportunities for the brand.
Campion added, “So, we see great energy providing more choice and differentiation within a style that has the kind of expansive opportunity that the chuck has. And that is a more premium version of the chuck, which also kind of raises tentpole and adds the opportunity to expand on that franchise.”
Converse sales outpaced the 12% growth notched for the Nike brand. Impressive, especially considering the Jordan brand had its first $1 billion sales quarter.
Nike’s overall sales came in at $10.33 billion, surpassing analyst estimates for $10.09 billion. Net earnings came in at 70 cents a share versus forecasts for 58 cents a share.