Strong top-line revenue growth from NIKE shows robust consumer demand continues. FY revenue guidance raised NIKE’s Q2 Group revenues were up 17% (+27% CC) vs Q1 +4% (+10% CC), with NIKE direct sales +16% (+25% CC) and wholesale revenues +19% (+30% CC). Key wholesale partners are ‘seeing good market share growth’ as supply improves, having been starved of stock for 6-8 quarters. NIKE’s gross margin declined 300bps, reflecting higher markdown (particularly US) to liquidate inventory, unfavourable FX rates and elevated COSG costs, partially offset by single digit price rises in Q2. The better-than-expected Q2 meant NIKE raised its FY constant revenues guidance to low teens growth at constant FX vs low double digit previously. Gross margin still down 200-250bps (of which FX c.95bps). Wholesale 2H growth expected to be slower than Q2. Q2 was a soft comp and good demand meant a stronger pull forward of shipments into Q2 from Q3. We believe positive industry momentum bodes well for JD Sports to deliver on consensus FY expectations. NIKE’s N.America sales were up 30% (footwear +39% & apparel +14%). Footwear growth is of most importance to JD as apparel is less than 20% of US sales. EMEA total revenues grew 11% (+33% CC), with footwear +14% (+37% CC) & apparel up 7% (+28% CC). Positive news on apparel inventory and encouraging early results from Connected membership programme NIKE has made progress on reducing inventory, predominantly in apparel, with management saying the inventory peak is behind them. Clearance is in-line with Q1 plan. Total inventory dollar & units were down QoQ. In dollar terms, YoY growth in inventory value decelerated from 65% in Q1 to 54% in Q2. The spread in total inventory growth to revenue growth should narrow further in 2H as the future buy is tightened. Total US units were down low double-digit from Q1’s levels. Full price sales are strong with NIKE brand ASP up YoY despite higher discounting to clear inventory. NIKE is seeing good early results from scaling its Connected membership programme with its key wholesale partners Dicks, JD Sports, Zalando and Top Sports. NIKE’s team believes ‘it will make NIKE a better retailer and a better wholesale partner.’ Wholesale partners are finding ‘engaged members are driving improved traffic conversion and mutual profitability for them.’ We continue to regard JD Sports’ market valuation as undemanding, and not reflective of the strength of its market position or its future growth potential.