Nike topped Wall Street estimates for first-quarter profit on Thursday as higher prices of its sneakers and apparel helped offset a hit from waning demand and persistent cost pressures.

The company’s shares were up about 2 percent in extended trading.

Nike’s inventories also fell 10 percent, indicating the company has been successful in reducing excess product stocks ahead of the holiday season, quelling some investor concerns that it would be forced to offer steep discounts.

The company’s strong brand would help it maintain its premium pricing even in a more promotional environment, analysts have said, adding that as competition in sportswear heats up, its leading position and innovative products would also help Nike outpace other brands.

That comes against the backdrop of US consumers having sharply cut back on discretionary spending, which has prompted wholesalers to place fewer orders, denting business in North America, Nike’s largest market, where revenue slid 2 percent in the first quarter.

Meanwhile, in China, Nike’s most profitable market, revenue rose 5 percent driven by strength in apparel, but that was short of the 15.4 percent jump expected by analysts, as consumers in the country pulled back spending amid high youth unemployment and growing worries about the economy.

Nike posted total revenue of $12.94 billion in the quarter, missing analysts’ estimates of $12.98 billion, according to LSEG data.

By Deborah Sophia; Editors: Shounak Dasgupta

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