Nike Inc. reported its best quarterly revenue growth in over a decade barring one quarter and handily beat profit expectations as North American shoppers rushed to stock up on sneakers and sportswear before the holidays.

Shares in the world’s largest sportswear maker surged 13 percent in after-market trading.

Steeper discounts and increased promotions to reduce excess inventory through the quarter helped the Beaverton, Oregon-based company boost sales and attract recession-wary customers. As well, wealthier shoppers helped maintain a pandemic-led boom in athletic apparel sales.

A profit of 85 cents per share for the second quarter ended November topped estimates of 64 cents, per Refinitiv data.

Nike’s revenue jumped 17 percent to $13.32 billion in the period, beating an average estimate of $12.57 billion.

That was its best showing in 42 quarters, barring a 95 percent surge in the fourth quarter of 2021 when retail stores had just started to open up after a year of pandemic lockdowns.

Sales in North America, Nike’s largest market, surged 30 percent, while those in its most profitable market, China, fell 3 percent due to COVID-related restrictions in the country.

“The Greater China business is still hammered but showing signs of coming back recently in the last few weeks since the Chinese government has relaxed the zero COVID policy, which is a big positive for Nike,” Morningstar analyst David Swartz said.

Nike’s margins in the quarter were pressured, though, due to a stronger dollar, higher freight and logistics costs, as well as higher markdowns to clear excess inventory. Gross margins decreased 300 basis points to 42.9 percent, while net income for the reported quarter was flat on a year-over-year basis.

The company said it expected revenue growth for the year ending May 2023 to improve slightly to the low teens on a currency-neutral basis from its previous forecast of a low double-digit increase.

By Ananya Mariam Rajesh; editor Anil D’Silva

Learn more:

For Nike, Is the Worst Over?

The activewear giant has struggled this year with inventory problems and a slowdown in China. It may have turned a corner.