What happened 

Shares of Nike (NKE 1.21%) popped 6.2% on Tuesday after the athletic apparel titan's fiscal 2022 second-quarter earnings exceeded investors' expectations. 

So what

Nike's revenue inched up 1% year over year to $11.4 billion, driven in part by a 12% jump in digital sales.

Nike's gross profit benefited from a 9% rise in direct sales, which include those produced by its retail stores and e-commerce sites, to $4.7 billion. These sales tend to be more profitable than the company's wholesale operations. Nike's gross margin, in turn, improved by 2.8 percentage points to 45.9%.

"Our second-quarter results reflect our deep consumer connections, the continued strength of our brands, and strong marketplace demand," CFO Matt Friend said in a statement.

A basketball player is about to slam dunk a ball in a net.

Nike's apparel is popular among athletes and sports fans around the world. Image source: Getty Images.

Nike ramped up its marketing campaigns, which contributed to a 15% rise in selling and administrative expense. However, its revenue and gross profit gains, combined with share buybacks and a lower effective tax rate, drove Nike's net income higher by 7% to $1.3 billion, or $0.83 per share. That was well above Wall Street's estimates, which had called for earnings per share of only $0.63. 

Now what 

Impressively, Nike was able to overcome significant supply chain disruptions. Inventory shortages caused by factory closures led to a 20% decline in the apparel maker's sales in China. These losses, however, were mostly offset by a 12% rise in Nike's sales in North America.

Moreover, although Nike warned investors that manufacturing challenges will continue to weigh on its results in the coming quarters, management reiterated its guidance for revenue to grow "mid-single-digits" in fiscal 2022. The company also expects its gross margin to improve further in the year ahead.

"Nike's strong results this quarter provide further proof that our strategy is working, as we execute through a dynamic environment," CEO John Donahoe said.