NIKE (NKE) 27 Jun 192019 Q4 Earnings call transcript

Good afternoon, everyone. Welcome to NIKE, Inc.'s Fiscal 2019 Fourth Quarter Conference Call.

For those who want to reference today's press release, you'll find it at http://investors.nike.com. Leading today's call is Nitesh Sharan, Vice President, Investor Relations and Treasurer.

Before I turn the call over to Mr. and you based on those materially. on subject certain remind make call statements me cause to statements, could forward-looking current risks let that to this participants will are actual Sharan, results that differ uncertainties expectations and risks in reports the are filed filed on detailed annual including the report uncertainties Form and with These the SEC, XX-K.

expectations or gross Some growth forward-looking margin. revenue statements of future may concern

intended to to measures, financial context In to addition, also statistical constant-dollar references to financial and constant-dollar performance revenue revenue. discuss make information financial are eliminating fluctuations. non-GAAP the participants to measures. including References business foreign provide to as non-GAAP references the Participants non-public and may of other exchange may

of available measures be To reconciliations will NIKE’s comparable at quantitative the non-public discussed, GAAP and extent and made financial http://investors.nike.com. statistical website, information presentations is

Now Nitesh to call I Sharan, and turn Vice like would Treasurer. the Relations Investor over to President,

and to full fiscal for operator. you joining Hello you, results. today year fourth everyone, XXXX us Thank Inc.'s thank quarter NIKE, discuss and

the call indicated, discuss non-GAAP financial measures. As on may participants today's operator

was the find which press release, investors.nike.com. ago, about our an in hour our will appropriate or reconciliations at You issued website

Joining NIKE, President CEO, Financial Inc. Parker, will call and Chief us Officer, and Chairman, our Campion. today's Mark Andy on be

time. your prepared remarks, you allotted we possible We Following of their to will questions. as as like our in many take allow would to questions ask

you. you have free that Thanks to we on would your feel two. best do and to questions limiting initial the you additional cooperation So your will come event appreciate not to others, re-queue this. we covered questions are for to please by back our In

President over Mark to now CEO, I’ll and Parker. the NIKE, Inc. call Chairman, turn

our strong fiscal and from XX% everyone. expectations NIKE 'XX results outpaced the neutral currency Nitesh, and growing good basis, of beginning year. afternoon which Thanks, the in hello on a year delivered

that sport is direct opportunity thriving is capturing demand athletic and proof of are performance the more offense for results Our consumer our further and every that day. lifestyle product

our continues only not across men's fuel in What's with portfolio. target triple-double. that women's new defining product geographies, the 'XX key direct Investor our XXX% NIKE sportswear. total accelerated speed 'XX win and growth delivered Day also our as we the that we incremental is to long-term fiscal platforms exciting in growth, exceeding broad-based fiscal that is Innovation drove In capabilities through innovation, consumers which of and and we of but performance was complete for year innovation our Overall the out most balance We saw laid XXXX. high-impact categories. at roughly

started. digital remains inventory know real-time XX% we're responsive connected with our data Speed our revenue on focus and we're In capitalize demand. we're and growth. connected cycle an well to the on a our to in And in manufacturing, in that opportunity, getting consumer audience we way just digital half cutting creation meaningful and ways. towards our advantage brand emotionally more wider incredible digital product throughout finally NIKE is investing led optimizing year, accelerating and

an environment in we're to where our led dynamics the geopolitical like foreign have volatility. and important triple-double tensions is right triple-double, on in Our exchange especially focus now, trade

and and delivering serving great the under have, mindful engaging we conditions building And that of we're control. brand. leverage our command the certainly importantly the more of our managing that's We’re consumer in risks, are products, and experiences the

past come blueprint more business geography growth those incremental for We how dimensions of together. this $X than year. China in greater over the is all Our the added billion

We're in will business of brand and decades energizing for to China a remain that in our China. of proud NIKE and this we sport to come. for we've China and are and confident marketplace. grow relationships the the made investments continue is developed We we've

creates and as growth, capabilities three distinctions the catalysts to us with for lifestyle XXX well for and speed. NIKE's innovation innovation, innovation. XXX, top want year. that's The on deeper go tell innovation continues Refueling which I'll let's they consumer product. as are Max greatest to better direct Now start and in And were that perform volume styles that their amongst VaporMax drivers Max that like the demand the with NIKE's

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platforms Looking we new to fiscal markets. opportunity in space the out to continue ahead carve 'XX great see to both year for lifestyle

month with the QX. MVP season. have growing next In digital shoes connection platforms the consumer. were with exciting accelerated in to own forward double growth continue the his the most basketball NIKE's to from come passionate looking signature lead addition all performance Giannis KD, greatest way, direct first footwear, where following basketball KYRIE and the another adding LeBron signature his The incredible mix And to to we of with continues collection digits. personality and And

XX%. Jordan as a growing returned market to High both Heat in be Brand the in Line success year we we continues America the in see X global Jordan styles. poor The had Jordan year. a a strong Air The earlier North very and reset after In [ph] to marketplace phenomenon,

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digitally is thoughtful distribution. designs, moving great focus of brand led powerful messages, momentum renewed a women's the how in and really needle our example through Our

around You're obviously now seeing it the energy all with World Cup.

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for athletes focused serving on world. the continue wellness as we're fuel dimensions. delivering health around equally the to the more we movement everyday portfolio, We're broader the and of women in Across

America one first in claimed we share the for in for quarter in number bras NIKE’s time North history. This position the market

across size Through strong this our growth double [indiscernible], collections specific Max apparel Air and with for and specific to research And train women's the live. this footwear later quarter. based we’ll the body types and and unveil like and XX run, market digit we're styles geography sneakers of expanding inclusive sizes. sportswear, our we over Asian on fueled year women's Dia, And apparel

way, opportunity to consumer in to continue in future one question when biggest a see and One right of someplace our Distribution addition is In Women's able the the unlock is the brand often that plan over several a product we inspirational digital product growth years the I we provides. Business? to they're experiences, new. get how accelerate forward female more our lot to we responding. present that next barriers. And we’re we is take find asked And the major the

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With for our demanding refreshing core consumer. business, today's about of the footwear collections talked our we've importance

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with that way our agenda launched Max week, years fiscal platforms innovation React new for we to This on XXX. ’XX, As reloading next And merges we two shape the the new several hybrids shoe more Air our celebrated of footwear start we that the will come. platforms, have seasons. for we're most in the

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of for platforms future As for we 'XX as look well are will these NIKE launchpad into innovations and the products growth the foundation These and ahead, serve company. beyond. collections fiscal the our

noted we our that earlier accelerate digital, mobile, our the also mobile. all XX catalyzing was growth. within Direct And advantage. 'XX membership. year builds and saw it's our that its this apps. Fiscal And Within of digital I leverages year is NIKE digital, within Direct a it's

members total and pace at Plus lifetime of higher Our ahead better in just identify ecosystem Day. serve NIKE the value. enabling We've personally, to driving million XXX our passed investments communicated are we Investor which us the is members consumer

The sneakers channel and with digital brand, acquired NIKE. other checking app daily, has new our members has than asset incredible users in to for any become more an

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We're also XXXX. of footprint target renewable minimizing our with a energy XXX% by globally environmental

and the waste value at each that are of aerosols, the are consumers we're steps scale we share diverting even landfills material bringing and We pounds million XX which expect and as recycled driving is transparency today sustainability NIKE kinds These brand. more our stories our in dimensions through year. of from to

delivered strong leading brand areas advantage. the in is investing We're over in NIKE digital itself, 'XX, growth creating with in but all of our up in team an right three sustained iconic and were an future for more to with proud We're and fiscal pushing our inspiring continue results the making long-term. earnest importantly, deliver extend competitive value. and amazing formula a advantage that NIKE confident ended the products, through facets to through shareholder the pace

Andy. that With here's

afternoon on Thank the you, Mark, and good call. everyone

ahead themes 'XX close we key look year year we financial to As from fiscal out and perspective. fiscal stand 'XX the three

terms and shareholders. is a NIKE for how the NIKE is paramount growth of value we Growth how First company. creating growth is creates consumers measure value for in we're

transformation. deliberately requires you today. extrapolating aspire is growth NIKE's what driving Accordingly, transformation in the Transformation be learning acceleration investment. about Second, future, being it innovation, toward fueled about strategic to is and it by not just requires continuous are what requires you

in and a neutral provides view profitability and extraordinary value expanding volatility our financial into especially FX Third, performance NIKE's strong times create our for to growth, currency shareholders. of geopolitical fundamentally clear potential

first digit consumer five year fiscal new growth. strategy growth full accelerated in on first box, said Day high Let's we our our generate on a go would we of the Investor this In deeper year little the that with 'XX single our expectations. October exceeded that new At XXXX, in next over out years. revenue offense average direct growth executing

full grew revenue basis and roughly At the the neutral billion that NIKE Scale $X XX% on in a incremental NIKE, one in recent For revenue just of year. most year XX% Inc. currency is quarter.

our at is above each growth at targets or we all geographies long-term that also Investor geography communicated for four Our the broad-based with growing Day.

second me Now that to brings key the theme.

leading a of operate day the growth next and years, strategic aspire that being with to global of and were transformation These of we designed XX is countries. transformation double cadence At three the XX pillars our growth greater by globally. key innovation, Our our our and speed our key cities said over connection drive to and digital. to we to fueled investor direct to across with impact strategy consumers, five NIKE agility and double

for to those year and total already quality also 'XX. To Today are the all pace key help as fiscal of on to gauze measures. our platforms we measures recently we've by fiscal of success. launched doubled communicated generated percentage exceed Take compared of In revenue year innovation growth, the we 'XX, impact innovation. on of example several

XX potential performance that We innovation across are prioritizing delivering scale in to Air and both investment platforms React greater have in like sportswear. by

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we 'XX, digital, concepts in leveraging are wide significant consumers platform capabilities invested better investment us in the NIKE new capabilities app, Plus in and new data consumer NIKE ways. concepts $X enterprise In store include fiscal the and membership serve over that new sneakers that year analytics billion and our and app, helping NIKE

With and to versus long-term focused expenditures. investments, our our shifting we're SG&A prior these clearly nearly incremental editing within year all also of transformational equating legacy

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triple digits has NIKE to mobile growth In globally. We out potential is broader and roll app America, NIKE's starting growing products. we're of also invested just significantly in portfolio offering the North The NIKE access extraordinary to app. revenue app NIKE

new two enhanced our including 'XX. greater fiscal launch the digitally digital concepts that we'll leverage in year Shanghai also investing NIKE app new China in and We're mentioned, innovation format Live. smaller in Mark York and houses in New store As the NIKE

they ways are exceeding the to at use of These These as investments ways. retail. in That life membership platform. serving store revenue significant new of consumers us focused brings serve the concepts NIKE have bring in consumer help me that we're investments better six to through know NIKE the plan our the capabilities largely new making Plus to them our been building organic, on app

measure accelerated That consumer our individual's value. an Invertex service Zodiac Zodiac has and acquired accelerate on ago, product membership one to lifetime both also and year said, offense. impact we offerings roughly of ability our to targeted the

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I NIKE's As expanding these, shareholders. third perspective growth, clear said reflection offers in to potential earlier, create that theme profitability the currency from performance, for value is NIKE's key financial neutral fundamentally financial and like times strong a a of

it global that a XX appeared exchange months slight growth was ago, for tailwind turn to harmonized into NIKE. beginning foreign

the year China to over U.S. have around led strengthening and by dynamics However, fueled uncertainty geopolitical Brexit past trade. dollar largely

year within plan our million taking into revenue drove So in fiscal account reported $XXX billion headwinds strengthening after of our year ‘XX, versus entering EBIT on over nearly and ‘XX FX alone, fiscal dollar $X.X our hedges.

that late know We of transient. be foreign exchange headwinds the may

currency primarily remained in we've we can you on in that our executing And levers our the neutral strategy. see focused performance. So control

and product transformation the marketplace growth portfolio strong of our neutral America driving distinction heat leveraging NIKE's Our and brand and we're in and all expansion the The key digital. North strength currency in markets. international reflect in margin

the function a Our core in investments legacy required transformation drive to expenditures. gaining in 'XX accelerating leverage year of while fiscal SG&A growth our was

we're retail. consumer and most optimizing our on notably are gain to while differentiated within differentiated experiences We digital leverage leveraging geographies, editing creating where shifting

for sales to what factory That business efficient call an respect We're to at digital shifting with also store digital includes, new we price models example, optimizing testing fleet. NIKE off platform and for wholesale. buying our NIKE.net, customers wholesale many

it and targeted Over drive in scaled the growth, more next three years, digital focused resources will as increasingly areas. edit we and we shift

to that year ’XX over is basis growth advantage turn strategic fiscal leading One points. adjusted into investment key capital. competitive In and XXX ROIC unrivaled NIKE’s financial NIKE's ability return measure invested on industry reflects expanded

drive margins, the direct expanding growth, strong consumer invested strategic continued and on see we returns through transformation capital forward, NIKE as high at offense. we Going

for reporting with on X% dollar But ago. our QX 'XX outlook basis before revenue a the basis, NIKE QX briefly I XX share Inc. expectations on meaningfully both touch real currency year neutral increased days on we fiscal let's exceeding and results. XX% communicated strong

reported full a revenue For offset Inc. on as headwinds. neutral XX% was year strong the growth partially by X.X% increased currency NIKE FX basis,

expansion QX, Gross strong margin and points XX by expanded full also profitability sales, NIKE price Margin basis guidance. was Digital in driven growth. exceeding product enhanced our

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quarter Fourth EPS diluted EPS $X.XX. increased and year was $X.XX to diluted full

up X% full forward supported XX As tight May and were supply inventories sell price and through demand. reflecting continued strong of looking strong

turn double-digits. revenue our to channels X% have a performance leading segments. currency Digital America, strong basis on operating grew QX financial let's neutral with the North NIKE Now In for all

NIKE's NIKE Foot NIKE distinction Growth North also That includes Locker, and Digital is Nordstrom. significant our branding growth. our gains these partners strong reflect Goods wholesale of in product the for and Dick's with Well, strength to share gaining and growing leading double-digit America, wholesale share portfolio. and our Sporting double-digit growth continues power partners. NIKE strategic within within

continues innovation demand. classifications apparel resonate short-term. to and in it's some that very In strong so on putting pressure we our footwear see supply Our strong

expansion. gross strong For margin North revenue X%, amplified increased the year, full by America's

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NIKE to continues are started. another in truly Digital EMEA Yet where quarter. the EMEA, market XX% fourth up just in getting lead is we

fully countries year As into XX App of 'XX. Mark fiscal additional mentioned, leverage launching in we will the more NIKE mobile, power the

the The our and in NIKE prior also QX EMEA strong double-digit strength gains most JD by year brand in apparel in our partners, of into growth significant growth is translating strong and strong Note EMEA with football the the strategic Zalando. World that fueled overall wholesale share growth notably was also men's Cup. comping in

the revenue neutral X%. strong grew For 'XX amplified reported a fiscal expansion. margin XX% grew currency full was year, revenue year basis, and by On gross

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and app branded strength NIKE partners with by in fueled XX% of WeChat. the and grew sneakers the as digital experiences Tmall QX, such NIKE

revenue Greater neutral We see China year strong full a fiscal basis, revenue basis. reported 'XX. growth XX%. China a up currency was the increase in continued FYXX For year in On in XX% on

we with the relationships brand deep a of and China, are building consumer. China meaningful As Chinese for

consumer's the coming and for and Ministry top and On for creating Cup sponsoring note, around products consumer, Sport we're sport our of investing in fuel fitness the China. amplify World working specifically the FIBA federations closely athletes the We're with China in and basketball local and Education passion that to to increasing to in talent, China's in team Chinese an passion team QX. participation excited for designed

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by Our and as fueled by is entrepreneurial digital partners with Flipkart the others. taking growth led ZOZOTOWN, mindset digital we're in APLA such

out own the our will our we NIKE of to 'XX, eco expand digital system. Looking fiscal through year footprint ahead signify app scaling

neutral on and on the new basis, revenue basis X% fiscal For digital fiscal Converse full APLA reported platform. X% increased a reported 'XX year Converse's neutral increased fueled and on by X% currency XX% a year commerce at currency on basis, finally a China a revenue basis and and

Looking forward, brand Converse's in the Pro product through leadership we BB basketball focused in begin diversification, with Converse And reigniting All-Star positioning launch have team that energized of at basketball. on a new QX. including the fueling shoe growth authentic

With that let's turn to 'XX. fiscal our outlook year for

Our reported taxes currency envision couple with spoke are on more guidance the months, a we fiscal account, headwind said, outlook to quarter. over That creating last of when you past 'XX. neutral then dynamics intensified our continues basis, we for we offsetting improve our these into of year a taking reiterating

'XX. growth range revenue reported reported full-year in high year fiscal for outlook the remains Our single-digit slightly our exceeding in revenue growth

our with model. long-term another delivering growth year expect geographies on all financial four broad-based We of

margin. expansion gross would items, RFID points potentially innovation in That foreign points. and clear, guidance. XX headwind but will exchange, see for and XX model two otherwise expanding exceed we our To strategic supply chain for continued investments on operational strong our margin as headwind factored create basis to be expect margin a is that we roughly Air approaching financial long-term basis As such manufacturing expansion

line currently strategic grow As eventually revenue 'XX. for with fiscal offset initiatives SG&A we very expect should in to in growth. leverage productivity in SG&A investment, SG&A slight by year result

That mid quarterly $XXX discrete and we expect OIE As expect range. the in tax teens tax continued net high for other U.S. our said to million see publishing We items. interest based the $XX million for rate, of income to reform on expense the year. volatility effective to of we relative guidance

primary and on focus Our is the long-term. full-year

QX dynamics to line few respect with we expect our revenue revenue a reported growth growth QX. specifics in provide slightly I'll However, impact in QX. in In above to reported

by points impact neutral on Based offset fiscal currency forward. had within revenue XXX the worth 'XX. FX year four of expect React squarely in range, high scaling Air were XX, We should the that FX It's rates already headwinds. abate also FX of current single-digit late growth fiscal in year revenue QX which the on been and QX from Max noting we largely launched

Joyride we forward. of year QX the from and in QX of coming will the Now tail launch launch products at scale new innovative fiscal other end 'XX with

anomaly As will NIKE strong sales. expect reflects full for gross within This timing rates, losses. to as direct with expansion exchange as to in of XX on margin well XX we gross in significantly fueled underlying points our and margin XX a price expansion which basis by QX hedge based That FX foreign deliver gains said growth of gross and potentially the will flat QX. strong an be moved headwind very QX. year, margin FX basis be of margin year-over-year to points last

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As the range line we're the of neutral growth with in in digit revenue rate projecting growth. currency SG&A high single for

we of mid in the of income range million As interest net for in OIE QX. expense QX see and $XX roughly to tax rate expect we teens our $X effective to in high

value 'XX ever. poised sustainable As and fiscal we year The than enter profitable NIKE another brand growth is are creation. for of strong we year stronger

and market. extend continue We innovation strategically And will robust NIKE to to our we of transform advantage. digital pipeline have a bring to

for will questions. now call up With open that the

Drbul comes [Operator Bob Instructions] Your with Securities. from Guggenheim first question

line is Your open.

day. the basis I and go China of little strength see was you expectation. results your and morning. running. just Good afternoon, what in have apparel a of just if been I deeper strong sorry. is on And long ongoing just terms the with first I a good China, Hi, basketball could, It's the wondering you of sort on question guess

growth I the said decade. think you next continued

brand? from there are American seeing Just you the pressure around any consumer

that on just I wondering are guys update of bit from It perspective. And could maybe little doesn't thinking in you the anything's but in numbers, that wonder how if to so changing, about, appear you the trade just us here the unfold U.S. a discussions if just some continue

Great, question, Bob. the thanks for

‘XX. relates in first short while making year sportswear, basketball, also the marketplace. drivers global drivers growth categories group across the in the your that biggest of of Firstly, Jordan, in the by broad women's last of growth which year's football, of primary China course men's training, over versus We're growth based answer question, comp is All running around and and and with drivers China broad to across was but Cup. World The exception categorically. of based general, led the fiscal digital, extremely growth. The of the real

And the late we about dynamics fiscal seeing we we then of enter And strong impact U.S. our to have from to-date. as ‘XX. seen China momentum not on question any impact to see your year continue business

use to The been years innovation sentiment has messaging is effort urban the a really, We've for around China China. actually that and said, of take NIKE with strong. insights through as we consumer connect drive made to to marketplace quite to lot in the

have kind So the China. we're up seeing that continue. coming of And complete and we China, in it's the results really seeing we're proud offense I'm out of in team showing the results. that of

how of or guys NBA designer the on if if free just RJ Barrett, orange of zone staged, for on weeks? I I and And sounds you raw NBA opportunity, agency, insight ahead positioning and few capitalized terms as has have follow this material you some what recently you’re wonder give blue just Can weekend basketball. just a gold? and could it in the by up. us NIKE in created on next just purple colors But jersey the

Good one.

Okay.

obviously in figured hometown? Yeah. Right. my out [ph] You March

spectrum. okay. coast the You the We spectrum got -- the color got covered? Well, covered

So and certainly Thanks I purple bases and Bob. No and But, for think got Yeah. we than yeah. we're orange, blue insights the other covered. gold. other anything, ready

luck. Thank you. Good

please. Thanks, operator we’ll take the next question,

from Morgan Cassel comes question Lauren Stanley. next with Your

open. is line Your

your coming in raise thanks gross of much. What of year And the China? my terms end the on to wouldn't the this supply second here sit quantify go fourth impact so manufacturing exposure he should the that investments is quarter? then if just the we maybe question at And is margin then had et percentage any, where that do of into Great, cetera, any fiscal Could chain during prices, commentary on -- the U.S.? just through? you

is goods The investments. fourth is for because investments that basis may points your short cost XX And just and take long we chain that term capture I'll sold roughly our on margin. question those, answer in within quarter. the other of to clarify, first be the supply

terms current somewhat can profitability. distorted it product in of quarter So be

sorry, was levers second pricing is that… question Lauren, And your to with respect again, China

China? been, diversify the at we much exposure how think of have trying manufacturing just the is Yeah into I the end of do the where U.S.? coming sit to guys current just to you actively year of sort and that

I'll Sure, take We, source to that one we continue as well. product in China.

in continue for globe. produce externally the China. a about that our China do We we We in to quarter source product product report of

China to the great At see of America in product time for China same of a other potentially and in terms markets. to North relatively in we produced is and continue modest. production exposure for the product China, opportunity Our expand

The a short got perspective. multiple nodes of approach agile it relatively production to distribution is from and we've a sourcing

is always certainly so it positioned for certainly And respect dynamics. with well out -- we while to we're have there relatively dynamic trade, macro are dynamics while as the been

our be source we to critical space. see And part continuing China a of

Lauren. also For parts that world will other China, the you, of continue. but Thank

Thank you so much.

the please. take question, next will Operator

Your next question comes from Brian Nagel Oppenheimer. with

is line open. Your

Hi, for I afternoon. appreciate Thank my questions, it. you good taking

data you challenges closer there more through at have that than want I any was that -- top very bit. not your in were period quite any we indications course, reflected aggregate there clearly the actually, the as were totally is, line the weakness The talk I -- look currency maybe of So United a question in results -- Southwest in the strong. neutral to been We on were There results? elsewhere more could, here, strong States. of there

Air, demand. which a to years distinctive problem very a Its couple to of nice from is top enter One a NIKE year NIKE. Brian, line have, particularly which strong perspective strong we've where is, challenge innovation broad and AIR, based a obviously as is a relative demand frankly we to the have relate got we

And in to U.S., related out there year. to in is that Mark really in mentioned, directly So closely to half being expanding and second we within that this and dynamics got manufacturing Air capture about point your tied the investment fully able powerful our portfolio our is to the as his we've are that NIKE the of remarks, innovation actually in past demand that weren't an we marketplace, in AIR. obviously

other based growth respect could to on with up a in ramping got revenue few in areas strong the growth apparel very our supply marketplace, we're the And and fleece. greater In have classifications around particularly apparel. been demand where

overall, being about It's most when that in extrapolation. market. we an by then transformation notably, It's it's And just NIKE. not going in correlation about our speak And a transformation really really not innovation. what's just to fueled growth, is we the a on said that

have creating Again, new in something we're the digital. creating we in the marketplace and So in something different digital terms new and connection marketplace we're consumers. with the different and of

for areas there's other I strong. opportunity There's very of performance quickly. couple out actually has think how women's going and But mentioned I forward. the A more been I call we us it's have fourth quarter. going on the double-digit growth for 'XX. the accelerating been very we're But through bullish in year move fiscal opportunity we women's forward as the actually into and

also of about NIKE. styles with work the $XXX refresh called of zone, have is And that core core in in zone a we space, in for to price coming that only that unique leveraged footwear. within sort that And XX% out the then existing design being not refresh technologies products product product point but under going whole

more So for us. that's to opportunity some create going

That's all.

Brian. Thank you,

I appreciate the detail. Thank you.

All Operator, question, take please. our next right. we'll

comes Omar Evercore question with next from Your ISI. Saad

open. is line Your

Hi, more see evolving. thanks taking Kind how on manage in you're comments kind it the of first term, diverse differently, especially the what your sharing thinking to either management demand opportunities as question. you about you RFID inventory more I are inventory, inventory of about consumer inventory questions my talk ask for actually, Two about wholesale What accurately? and wondering wanted longer channel. the to matching

is you know that explosive second How scale the my as do that you before is on lose starts Thanks. growing the right to also through saturation big how there. unique And keep growth to those question but do special I platform don’t and keep word platform, special? create obviously about then and that think see, consumers the SNKRS you did it you experience app, runway that how it the for

question on RFID touch Let me Omar. first just the

of that’s all fall I across we're should through technology. going RFID in As to beginning and apparel, the mentioned season 'XX non-licensed launching the footwear, and RFID majority there QR were in you the enable essentially apparel I say

a for capability inventory improve that’s accuracy. big our dramatically of terms upside to our in visibility and us So

it. serve I supply chain. and ultimately across And consumers to throughout product they when want allow us the that with that's the want, marketplace think the going to they

across through upside I we're capability And time quite capabilities this supply and is rollout RFID own retail actually up we doors fiscal and think have owned our see key throughout consumer within on globally that over a and to the chains. scale RFID partner we 'XX powerful. the So then going is

this in position So the where the I want it's ultimately, when us way create again a the and profitably they breadth capability of think to it they in the them want will and need help consumers they putting grow portfolio it. product gets that to across serve ourselves that

with that respect Omar tremendous where we opportunity. on to will We then And opportunity dimension your question still give see I see sneakers. sneakers. on some take I you will

that were small to still on as launching of of special supply what kind that In of on seeing referred nature percent were We sneakers. the sneakers. of demand you very terms product the a

some a pretty we minutes. fantastic this within but few saw launched of also again sell In our fact in collaboration just out and styles morning, unique of create, an That’s that the terms heat opportunity.

in can surface apparel. to are apparel overstating demand connectivity Couples have. with and done we apparel it terms other and or say sneakers in of scratched and launched where really It's we heat we create consumers opportunities cases What of see around within to innovation almost the either we've we we the collaboration an apparel. apparel limited incredible

mind. sneakers through that the get two is another the I dimensions great in membership that's data Women's app and speak we through then product app opportunity to the last done with sneakers creation,

app. in shoe is that Based that see and the year. the which to and was New opportunity, we York, directly received branch. community well on, on for based also people analytics this innovation the in in provide Around launched we to data past We on Dominican incredibly launch touched love the as Mark who innovation demand members. relatively Sneaker

finally, experience expand to we on what a that markets focus us in all because here globally of America sneakers North the on app here but as then North tremendous we them businesses consumers both in touched often in to have the America we the world. is continue And potential got around we geographically

to to to core that be your sneakers about going question answer the add the in sustaining itself. product have is heat I the

I day continually the ratio evolve compelling right we comp whole on check experience. sneakers and day kind it, making strength the of to is to is refresh how going the in have now of sure back to to demand a think So it in the very product, supply make experience

you, Thank Omar.

you. Thank Understood.

Operator we please. question take our will next

Stifel. Your is Duffy question from with Jim next

now line Your is open.

the interested Hope of in the being as all are on ecosystem. go intersection you comments demonstration new the then rethink cities the And this you're question. that's in to there market and in physical strategies? key to I’m With doing customers of of dovetail the Thanks. respect my maybe along efficacy successful role you second that strategies, to the will well. that digital digital physical and Does would city with highlight strategy? further been how retail recruiting make

physical the of intimate all, digital continue see is and more of the to and to be relationship. intersection going we more first Well,

it's dimensionalized about experience we're think Ultimately, at making some of trial or error and experimentation, the I learning physically doing. tests more the richer, lot for a consumers. looking more from digitally we're experience of that

seeing have We cases through the rise significantly. engagement where those actual like we're at the spend app retail, are up dramatically. NIKE jumps digital consumer consumers those connections saying we per from actually in And

better it's do lead space. going investment to of not a we priority. is to And our is this to current -- and future members. source ambition how a this a something see of it's physical us. continue. that is just a the dramatically. you'll of this in continue So that for huge around is the digital customers think ultimately we serve evolve trend, is that don't just us And It's It's And fusion

brand over And on as cities over perspective. then the countries also in growth they your cities, to key which seeing We're are. from key a seeing our indexing to compared indexing results question, in we're

and your tell was I is spirit key cities. New bringing London, the of in Our would Offense to in number Consumer brand prioritization, one which our York, brand think each those of our Shanghai. in question, you life, been the Direct have priorities first that terms I of in

marketplace. from having where York us in Shanghai, invested of New that what see segue Mark that's new houses which of So and in you do is digital -- a speaking that the innovation NIKE just bit a expectations. or to Those and merging the physical experiences was hasn't in anyone experience for an had exceeded really else consumer in have the our well

bring where life NIKE market this another to to started we've Live. with smaller is LA our format, concept

in your we're where So think, say answer to the cities. I that the short, I New and But each cities furthest question, key got in teams energized London, would of Shanghai, York are along. we've really

our not all can In another at to we and what one ago, a teams city of key key or couple globally on fact, city. just leverage we together weeks align to had of our share and create in here learnings city best and jammed how headquarters key practices just

we're the So feel about making that against progress we think offense. really great

Thanks, Jim. please. question, take Operator, our we will last

last from Sam with comes Your Susquehanna. question Poser

open. is line Your

I was brands. my taking really wondering, about for view you question. how Thank you your

view on perceived a your in you As how follow-up brand's China.

I on comment one German Somebody perceived or U.S. that. is -- perceived brands. or said were that you to Love But other brands were your as have question. NIKE. brands as NIKE American perceived other And get

Yes, That had leadership the our dates it thanks been I'll based in we two, dynamics And in have Sam, in has approach to I China. for of in said, on talent three That's product ranges of there question. is for for China. team sourcing start. our decades. new to late. consumer. it approach that's the our be Mark not China been that understands the not for approach as And approach. Sure, a with China both we've place strong history, from and Obviously, the of local back

having terms purpose create, China. and in consumers us about being not in for the years, the the a China, in of the bigger participation in a could commercial passion sport, lively of sport impact the but terms it's simply and been we that enterprise Over fueling view in

of then extends point with and relationship the to Sport Ministry And Education. last that our

but partnerships more invested their and in athletes the as China. in partnerships, probably in global well there consumers federations and we're on local China, those out athletes why terms as Our is our teams, in impact of and sponsoring teams of of impact the in Federation's front because

And Thank -- secondly you. then

the us China we're actually but of that's helping getting for create world. insights And other relevant also -- also are China more parts for as that the products China

much So a use China to about trying position actually take Western as we isn't offering. gain a our enrich importing into product is concepts in and insights as China it to the brand as and as global it this

a position So truly a local. to local global it's putting It's be not company. better just for in us China

so And whole be then to and to you. prior to make The interact be with maybe core as able question. partners, Nordstrom follow-up so on your your more and RFID, mean and between overtime, a Locker this with and them a you on Thank act just systems does Dick's to interact will able efficiently? that Foot your on, inventory

Yes.

Go you Sorry. ahead. more Sam, question. to that did add

I'd love Well, from something color may add But there. go yes, and else. and

NIKE but to Direct also wholesale partners, the what which of Yes. that and to partners do, the aspire marketplace connect is as RFID through view through do of future. an that us we business, we part Network NIKE the do provides strategic opportunity being our

down consumers color the visibility testing RFID able of to use to in already style, and for. into are they're looking We that greater the being product size give

color probably and broad distribution the marketplace, in opportunity RFID into of NIKE an And visibility time real most being is we that's our somewhat into consumer able moment. what our size a style, demand our with across to sharpest aspect for portfolio give of opportunity company like this within the across depth is limited intuitive our the the marketplace have, meeting by in and visibility leverage of incredible I'd XXX% say almost the inventory and to breadth is terms

RFID get help beyond that? lastly, will speed this how initiative, to then your speed certainly long initiative speed And that or the double with do your you for --

that's expect about lot some the the success. the strong doubling seen products We what we're On past one of results making. over really progress measures Well, We've that we and Yes. half of percentage we And good call market. to really feel time the next XX% through of one year. actually year. think, And the And of revenue coming our is Lane our is continue I by of what to Lane Express that Lane. I I commented product, as call we EMEA Express mentioned, a the sale led from in the effort initiative. that Express

really to So through a advantage accelerating year. to the And big we ultimately competitive be in for see fiscal speed the it's half us. NIKE, this market initiative going time next for initiative, cut

Thank Thanks. and with look you, for Take you Thank joining we care. quarter. to today you, next Bye. Sam. thank forward us everybody. you And speaking

concludes today's This call. conference

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