NIKE (NKE) 29 Jun 232023 Q4 Earnings call transcript

Good afternoon, everyone. Welcome to NIKE, Inc.'s Fiscal 2023 Fourth Quarter Conference Call.

For those who want to reference today's press release, you'll find it at investors.nike.com. Leading today's call is Paul Trussell, VP of Investor Relations and Strategic Finance.

Now, I would like to turn the call over to Mr. Trussell. Paul ahead. go Please

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

and Joining NIKE, our call today's Financial CEO, President Chief Friend. us and John Matt will Officer, Donahoe; on Inc. be

and remind me cause materially. on call risks based with that participants expectations, and are to actual certain and differ those uncertainties uncertainties let will begin, on risks NIKE’s forward-looking could make results in we to reports These SEC. you the Before subject that statements current this detailed statements are filed

measures In unless refer non-public are presented addition, on otherwise participants release for may neutral discuss year-over-year earnings quantitative a NIKE’s on measures and non-GAAP or Please comparisons and financial reconciliations. information. GAAP call website our growth currency investors.nike.com and noted. comparable the statistical today press basis NIKE’s financial to and All

you would to possible questions. We allow would for as will up so question time, limiting open start appreciate of on cooperation your for Thanks ask then we with you remarks your to like our and allotted to initial questions one. We prepared many this. in as

turn now and John over to the NIKE, CEO, Inc., President call Donahoe. will I

unique on today's that our milestone strategy you, Paul, and set continue financial It's clear Fiscal delivering drive and advantages goals. NIKE's hello to to for on XXXX is was while Thank and a NIKE records call. everyone competitive year new we as our separation. that operational working,

across full-year and and construct geographies. billion is women's, and EMEA, kids, in to APLA based XX% the growth double-digit on China exceeded returned men's, growth at broad lifestyle growth performance America, QX. all Looking and North of our consumer our year. we in saw Greater and across revenue, growth double-digit $XX all with results, across This of

record Jordan's and and and driving I growth women's, all interesting-leading mid-XXs with fiscal to North In highlight year. which impressive NIKE, strength kids, Converse, particular, XXXX. through brand across International. want growth apparel of footwear and in also strong Jordan our brand's grew with both Jordan, portfolio achieved men's, in We're and America

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of And return last inventory ahead but not competition. to our healthy we least,

flat they The is XX giving continue marketplace to we've us in for it. taken in down we profitable a they units consumers want, forward. how business, be and inventory when versus value want served addresses months Our Across they and that what want to want actions year-over-year more how growth moving ago. our build them position it,

across direct a create we've physical experiences by distinction marketplace and and the drive truly experience industry in digital our digital growth distinctive consumer own the segmenting to consumers platforms. with through deep accelerated investment grow converging, creates marketplace. NIKE connections the with Today to

growth the traffic in both This helped and delivers serve digital conversion fiscal billions, XX% year, in XXXX increase to Every XX% in strong to improve. order compared rate XXXX. average we as share success digital to our as which business of value fiscal the continue

continue to digital the XX% and growth. For growth had digital expect lead to we of strong year, our we

new into Now, this at will only translating end-to-end marketing, our and NIKE, are consumers insights consumers as scale. chain, We membership serve built by growth merchandising. and accelerate able product is better for This value our offense. profitable capabilities including serve driven we this is add believe fueling sustainable with all our creation, and know powered data them to growth better we to and

but we base, we XXXX, deepened fiscal consumer expanded importantly, more elevated membership relationships. these and our In

increasing our brands. their they members loyal with are ecosystem, Once members journeys engage and Our sport with more now more us are lifelong buy us. our more, join frequently, to

also NIKE course, marketplace channels. members across shop of Now

and access, marketplace as to always in distinct expanded we're convenience. We multi-brand three grow, complementary our we our serve that managing actively groups needs. consumers about each so, think And choice, serve partners with

greater to working growth. digital we've to know, experiences past years, five in and focus and have the differentiation scale invest the long-term as with membership over retail partners. drive fewer First, connected you created These large partners multi-brand

we've also authenticators validate to our sport Second, consumer neighborhood, access, brand. and sharpened investment in commitment community our both as deep energy ensures local brand drive connection. to lifestyle and This well in as

Collective, to that from of access not we provide Live, segments opportunities help responds elevated unveiling growth across female being And time, creates insight third, NIKE And price and to [rebrand] serve we partner partners. NIKE Well with the which concepts recent and retail. The distribution NIKE an consumers, points. approach and our our that store different addressed create consumers continue us to currently invest same deep in wholesale at to by new our accounts [ph]

Well NIKE on energy with new focus our sharpens we brings the opportunity Collective and women. serving see

the consumer acceleration how marketplace, experience So, landscape. addresses our of strategy drives a consumer opportunities direct the across see we this as led is them that the seamless member future the

and was Last month, how to I Beijing, experience the Shanghai live I was comes away blown there. marketplace and entire by in

building and partner seamless I And will doors. is owned and journey tell you social, team a best-in-class. digital connected merchandising and China and Greater the across Our physical, is commerce

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in China. the in on strategy this our were performance holiday, Tmall, confident record-breaking our and X/XX I'm with during even which more one year's number in playbook brand we And sports shopping

some and Today, to Williams marketplace quarter, in made XXXX end, Heidi Craig Brands' To expand that elevating this separation. and senior our with will excited we and Oneill NIKE two fiscal our growth Presidents. looking our competitive become leadership to team we deepen advantage, we're within front continue shifts will And accelerate and opportunity further to beyond, that our the of confident see us. we

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today, For of all who do my putting defines we the the to remarks like together brand be It we to No Sport something sport I can. will the grow brand sport, through that want that's are. and of always is we our everything walk pieces like remainder can NIKE. connects of people you world No by sport. differentiator.

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where Let sport greater me walk through areas see opportunity world the three ahead. and we we of even where have expanded

Football. In to XXXX, faster, discuss Mercurial grew XX%, Global and high nearly growth. let's pitch. and businesses NIKE win franchises First, Phantom, growing as fiscal key Football saw like even doubling share overall women's boot full Global continue we on realization kids' With price

step future while record game, that cements the joined the our as grassroots the invest in sports’ pace the our any to and with partner comprehensive this is his with We game, other the we of wait his we've this greatest. women's roster than matched and more for World quarter the on Haaland tournament also ever. with federations collection brand, energy goal Erling football can't partnering summer's of of scoring Cup. proud most in NIKE

features more history. we'll woman's the football and traction] After the than two proprietary our a that boot in [ph] led most Luna pattern female For testing players. boot and provides stability designing, Phantom for cleat innovative watch years of example, [peak new

a innovations specific and movements. debut In significant to addition, kits our woman's mapped Cup World will fit material

but last not ever least, football collection. sportswear our inspired largest And we've created

and the sport. and For just connect we're when popular of most one both energy the aligned fans weeks next and no we from like out pitch. else off to to as fans drive We're the generation world’s tournament athletes, focused they're

basketball. expanding basketball, ahead. we competitive NIKE see as we to we separation let's leadership. look significant continue where Today, market landscape, Next, only see discuss at defines And

in by of NIKE, portfolio Our Converse. brands, the our basketball is Jordan, and influence elevated strength of

which season. is this fact, already game's the standard set new roster, a In our greatest,

in ever, XX three unprecedented and For Rising This from All-NBA is from the speaking Jordan, Nike, Jason XXXX from Giannis all LeBron’s And years first an were first marked the signature Luca game's and the With of team. fiscal represented brands accomplishment. our Converse. Star time shoe. of Shai Gilgeous-Alexander greatest, of

in helping reaches energy the for strongly be excited you it's business his to Sabrina a since these stage new igniting in court, it of an the relaunch We're double set consumers. X summer, what advance And as onto Day to two new was Kobe X/XX. retro earlier versus bringing months the know, on brand been ago. the business years models few of dimension launch, by as styles with as short back And addition, our resonating going It's brand continued for great the by Kobe is basketball. potential a LeBron we the exciting already WNBA

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in holds week NBA draft, the the excited overall future And Wembanyama have Antonio earlier thrilled by in fact, for Victor week, family, last selected to Victor X the San number We're Spurs. and this we're in basketball. was what in the NIKE

little connection Jordan belief. upon brand of a with Jordan's with identity minute transcends bond to that the I sport, is a built game, special which people drives go connecting greatest advantage bit want sense deep and a self a and the authenticity its take This emotion, Now, generation. deeper has to generation into cultural to a brand.

[ph] the If and premium fuels Jordan continues a sportswear conversation to by dictate brand streetwear, this drives] being authenticity Jordan's [that that culture. leadership

You've AJ product seen X the High, Spider-Verse. to movie, the this Across to Jordan's with through brand's come Taylor like across Teyana partners culture, from collaboration Spider-Man: the top Women's meaningful the launches life

same this even Today, the strength growth Jordan scale has along QX, In Jordan at core plans the Signature Shoe. time, to Jordan franchises is offense opportunities. its place, with real now With Jordan biggest Tatum And Zion, men's. launched completes building in around energy foundation in four which Jordan's is the further. these and our X, Game Luca, extending

growth women's kid’s Jordan’s alongside XXXX, strength now apparel. also fiscal in Jordan had growth of but at over and Jordan's is retro business. discussion with, would In opportunity in footwear, And be complete indexing both its international no looking footwear today, in performance increasing outpacing

continue we Jordan's the is tremendous and to Jordan America, we differentiated Simply growth like In North penetration in to brand moving connection, drive for is of most a ahead. is it lower see plan about potential and to else. this the than nothing opportunity of put, culture, geos, our XX points growth capture and its ability amount

comment me lately saw We fiscal in roughly And our growth battlefield let been XXXX, today, more a competitive getting market. just business in and resource to and running joining business. Running's running started. compete the on our we're more win. Finally, more aligned footwear XX% for brands we're and with

as Now, and a know, everyday advantage consistency X, in And newness new they trail the pace through runners prioritizing in we're categories recent X of the Peg the most. needs shown to Vaporfly in key love we continue set running following as styles you and and racing led NIKE's reset, by the Trail innovation respectively. is

which quarter, last update major continues retail Since doubled last X, quarter, perform we its year. Run Invincible we're X, versus QX example, another next its sales has debuting And a Infinity launched to the For already to Invincible the franchise. launch, popular well.

right pair and they say, to have now, a wearing I'm fact, feel I great. In

women more The a Paris Infinity this of runners in summer. is line we more Olympics And ride reinvigorate we is our the build the breakthrough our momentum that's and offers to heading led innovation responsive newest years start into X following of with footwear unveiled as smooth sustainable just React be running and next X’s testing. A them. as

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women, attractive had Digital. already month, Motiva And a the one becoming has months shoe a style to for at particularly Motiva. distinctive price walking the approach performance see an the just A of footwear that's opportunities we're X strong sell-through. NIKE launched just we taking we aggressive post-launch, last market. with and a globally, point In design in two represented top

belief remain while look strategy work running our at ahead, our strengths. full of strategy the In the we're is go our working. a there's and all in lot business, we forward we with when compete to end, firm that we know Ultimately, confident in set CDA

Our brands have strong energy.

Our to consumers. we're position innovation and as will against industry XXXX, fiscal year And look after at we as same matters future. as executing year earned we leadership relentless ever, the is as into pipeline our most the what we occupy NIKE usher that

with that, call I'll turn over And Matt. the to

Thanks, our drove and rich market deepen and drive sustainable and strong rapidly the of across ability Throughout our NIKE sport separation consumer storytelling, doing competitive and midst fiscal call. our year, does actively Serve the demonstrated to voice a what to company hello key athletes profitable the John to everyone NIKE moments, and by on product XXXX innovation, growth connections through changing deliver the brand portfolio, growth manage growth. we is conditions. consumer marketplace amplify best. with in

we full-year, which with mid-teens mature in a the in basis, $X total neutral to performance adding our most our We of included For sustained billion delivered strength lifestyle. billion North business America, on and revenue $X revenue accelerating added and momentum currency market. largest growth

up and across In our ASP increases, consumer In growing sales the units price across versus full addition, we marketplace drove and mid-single-digit the retail and sales strong another in engines. QX, quarter with grew and franchises prior price double-digits year. saw product of our demand, we both top traffic online stores with total strong

DICK'S partners. a the we feel NIKE actions about decisive inventory the this Beyond strong from our momentum Goods, continue and We total top the improved marketplace growth, that to driven our marketplace top as Direct, and significantly our position, well very line including NIKE JD, results we see strategic with driving and over our specialty Sports wholesale year including with down Sporting finished by units, past good sales year-over-year. year, Direct as partners, city partners,

dollars year. the units deeper To down more versus are inventory flat than prior little a both go on apparel. and the across footwear Inc. double-digits Apparel units are prior XX% NIKE inventory, year, down with versus

in of inventory mix versus year. Our inventory has in-transit prior prior days improvement normalized, show the and and quarter the

may prior the of high-single-digit fiscal a Greater with us, closeout foot, being are versus strength. position year, compete All prior Closeout both with in-line down double-digits. the inventory our with average a North navigate of mix units perspective, is to have we inventory to and uncertainty And levels, pre-pandemic told, ready year. entering front the age and of China ahead that XXXX on improvements ready in down any be from versus from geography dollars our America

future we as a are for forward, Now move on we strong building foundation growth.

power and in of confidence depth. connected Our authenticity the in consumer, grounded NIKE's centered fueling is the in culture, Deeply and breadth and distinction, portfolio. to youth unrivaled sport

to our digital and sports investment with our our from marketing Our in reach. and our platforms global membership, innovation, our begins strength scale portfolio,

still the grow for scale NIKE's most world, We ahead. growth the opportunity advantages, has what and Consumer been sustainable us around interest the is as leveraging competitive And greater been. to to the it's over wellness potential long-term. and is NIKE's and consumers around ever and shareholders excites returns health, world today as sport, drive in create strong never value large to

Let me share just a few examples.

NIKE's are platforms, in XX James innovation. everywhere. of greatest We and innovation right athletes new concepts, relentless fuel is innovate growth. Innovation world for more advantages athletes, and of And years next to the competitive to Center, better make our creating new and our capabilities one new make First, serve LeBron to of NIKE's to now, we better, pace athletes

to investment continue in for we me to for innovation NIKE. value growth and athletes, long-term will drive this gives create increase We confidence can

year We innovations to have some global on stage. our great opportunities over fiscal sports this next latest showcase the

brands, unlocking for who direct the our also By Second, consumers consumer serving strategic better are and benefits we're love NIKE. accelerating platforms. across our and financial relationships knowing digital we

in returns per in demand Adobe have member X-to-X higher click example, ad rates, personalization, enable and with For member conversion, we member spend. and driving resulting partnered through digital to on retention, gains

consumer only and platforms capabilities these to to and come. We're opportunity our even on greater operationalize experiences beginning new see digital we

seeking is and with of innovation, active one generation Third, our South digitally of in Gen we youth This ever. our a the international growth region with includes of one Central connected see largest meaningful top potential world's young consumers America, of and as China, are Korea, Z country's markets. the where of our markets, deep And, love Asia and most coming Southeast age product a populations. course, most India, sport,

the can profitability are pressured we improve fiscal combined we we profitability the improvement that on average continuing with XXXX now see deliver When will XXXX. and drivers to that Last, of in many opportunities XXXX. fiscal corner grow, headwinds XXXX structural into cost around we fiscal confident above the transitory margin our as in with

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per $X.XX. for Diluted quarter rate was was share earnings the tax effective Our XX.X%.

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strong on frequency consecutive engagement trends. consumer Member marketplace across us levels. to buying retail was For drove NIKE's traffic double-digits sales inventory double-digits total up drive grew to revenue demand another all-time surpassing marketplace, healthy grew store an enabling and quarter, industry platforms a quicker all-digital the and at return high.

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we Spider-Verse this fact, X's kids a our set sneakers up inventory, the ever ability confident grew look and app. healthy X%. are robust in revenue mix North and product to we quarter's AJ In chain, drop launch of shock XX%, as drove in Direct NIKE normalizing supply NIKE's EMEA, a pipeline, pace grew In America largest With was on a NIKE QX the XX%. ahead. Digital

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year. index declining basis. XX%. on reported over buying as the NIKE grew revenue QX Digital a grew with Direct NIKE XX% brick-and-mortar China, Greater EBIT grew consumer in versus XX% prior XX% to continues In

brand left is is This NIKE's growing. Consumer Sport momentum quarter back. doubt. rebounding, is confidence no and

inventory school with And price healthy with into high We eight celebrated momentum activations energy the full of that in seasons by sport our accelerated position. Day. full product around sell-through our basketball Air Day, extended return league, marketing Max the Super Chinese strongest Brand and we

led community Running around Invisible Basketball grew NIKE we saw activations athlete, edition Ijen storytelling, for strong in the X GT XX. jump longtime and GT fueled And players executions double-digits, by including Pegasus athlete, sell-through for hyperlocal NIKE Cut. exceptional by lane inspired Leon. newness our double-digits, grew by express

NIKE's our performance that next month, results we in X/XX first Beijing. China by up year's this tour Earlier And record the week, welcoming athlete on with sales Giannis last we double-digits. since momentum breaking build will pandemic surpassed to as kick-off

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in quarter highlighted the growth balanced region. This our

Brand doors continued strong and Seoul its double-digit with as international expansion new Tokyo in energy. flight world growth our Jordan of brand local create

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over In reinforcing across India, the ahead this global kids by we women's business the We XX% with milestones building Southeast the new cup. in In APLA finished in market. grew opportunities Asia double-digit summer's in and we we see men's, with year, the this world football, drove our and women's, potential year of region. and new growth excitement that

X.X can across app argentina.com and quarter, first NIKE and first launch the to our downloads to digital drove demand. its continue elevated grow. Korea, And in region, From $XXX NIKE's accelerate incremental showing introducing footprint India. within in launching consumer In how direct demand experiences investing we million million digital peru.com local

macro robust a to monitoring closely trends. of flow and our inventory, me the innovation XXXX clear behavior, we normalized let retail Now, with and strong financial year new a consumer supply. environment, That fiscal advantages, consumer We healthy product said, pipeline, enter outlook. turn momentum, the are

in full our priority drive is healthy agility, operating price XXXX Our model. and for to growth, while fiscal efficiency unlocking speed,

best. position at its We control we are can we focused as to what compete NIKE on

proactive taking than months business, six are buys] more [ph]. planning our approach our building [tighten ago a to on balanced We decisions to

an profitability returns capital. to this translate cost higher of marginal We invested growth, expect into improved on and expanding

that taken We the factors will also growth, quarterly comparisons. as from overall of year impact rates have into prior as account well non-count several

For led and Direct. approximately year prior mid-single-digits, the reported XXXX headwinds four fiscal of This wholesale by from liquidation full-year, we grow timing accelerated activities. revenue the shipment includes expect NIKE points to from

In addition, on do spot rates, translation based impact on in current expect not we any fiscal XXXX. revenue material

expect foreign headwinds. more points which of We margins the margin ocean versus and a points a a exchange reported translates to the XXX rates basis basis gross XX from the XXX expand a favorable to approximately XXX starting headwinds, negative on modest reflects halfway recovery to from basis, impact improvement gross points second transitory expansion, This basis prior of in quarter excluding markdowns including points beginning basis year. of freight operational through

We focus business. on more price shift plus our increases direct also a our value, expect from ongoing from including continued in price structural low-single-digit gains to XXXX, benefits fiscal

in of with be costs to higher by supply higher labor fulfillment chain. parts inflation product partially expenses causing this expect our and offset We

We revenue global effectiveness. for as and speed launches in to expect transform greater investment SG&A in above to demand to we increase product NIKE's support capabilities sports key moments operating and model grow and invest creation slightly

to as continue pre-pandemic percentage remain will below a manage We of to SG&A revenue. levels

similar XXX million fiscal to interest we expected and effective income and net XXX other to is of year, income to tax Our XXXX. income, the be to be expect rate million including expense, our

important provide let few Now, first quarter. insights our a into me

restrain our to up be reflecting growth tighten decision first half expect to buys inventory. flat revenue to marketplace low-single-digits, quarter first and We

XX excluding points of to quarter operational We gross margin, exchange impact on expect a foreign points gross XX basis basis sequential of XXX reported points to to headwinds. basis basis XX negative in basis another points of of which down a expansion, translates points margin improvement the XX basis,

including We the expect next efficiency digits and SG&A double creation to reported of investments driven on basis, World increased women's around activation North America. the demand transformational implementation stages investments the grow to in ERP Cup of our by low a drive

investing our the offense, us. agile and of that remain uncertainty, developed we opportunities through capabilities in will experience, growth ahead, the on have the capture times leveraging front while to Looking of we lead and to

athletes future For starts always with NIKE, creating serving the and sport.

we it ready athletes incredible the have of to Paris World be to look an sport remember, to bring the our of will we just Games, like year to us from road this XXXX, and best. serve, be to Cup NIKE we the fiscal a summer's year Olympic As will ahead

up let's that, open questions. call for the With

you, Instructions] question from Thank Securities. with first [Operator take our Nikic sir. We'll Tom Wedbush

you wanted – now partner kind And year helpful. [ph] not the Thanks. Hi that everybody. about maybe So that Thank you question. you're recently deemphasized of about exited to What been was going in there ask taking and know, drove what retailers. mindset guess, I news some very want with, be wholesale channel. and just much America any et of to would back but had you North insight decision? changed somebody wholesale your you saw Macy's, my that and think, the into now I I color you specifically maybe cetera? a or do [SW] really And ago, there's for partners you or some two either those some or

Tom, Yes, take that. I'll

of same evolution And years. been Let remind this marketplace up it's strategy simply same they our the want start I get they how it. end want the in they when day, consumer, that we strategy right is last the several what as is at age the of and driven And you marketplace to saw mean, want, day the want it, and front, marketplace I'll me consumers the our by remains strategy. this consumer. just the a with over continued very

us different want both a use consistent access. seamless different mono-brand want and and channels, us They to channels. want they occasions shopping they shop to said are, They Consumers multi-brand. who across have know and to a consumers digital they physical Consumers experience. use and expect

it driven our with strategy. starts know, digital the connection with or you what has And And marketplace so is that direct a as consumer.

We owned Our augment with with directly mobile fastest-growing building our another. our NIKE in and stores, because of that underserved wholesale that be that our out will in we say those our segments digital industry, in we are apps, by women's the currently to fastest-growing apps connect digitally. the channel continue retail, are we that's consumer partners, is channel Jordan being where one are would stores cases unmatched

So, really we're play as important I my remarks, And partners wholesale there's role. And then different multi-brand in doors. selectively opening said segments. new a

last So, and we Foot and that talked attention, we authenticate, We've lot Direct. partners that's an the years lot have segments a then where we've focus doors the larger like help or JD we accounts neighborhood us DICK's points. of talked some spent serve and a consumers and price of Sports multi-brand and Locker of about over around And role. distinct such important couple

And past extension over quarter an what simply done we've so is the that. of

business but to enable consumers marketplace to continue Our possible grow to many drive continue fastest, will growth. expand and access Direct as strategy our as the we'll to

Boss, is up next And Matthew JPMorgan.

Great. Thanks.

in on So Matt, John, awareness share terms the takes, NIKE with full-year. full-year? would this for the to the helpful help just Maybe of some greater And and on wellness could the getting of sport first globally? revenue believe quarter relative market the I and of you of that think, capture bridge expanded then, year, XQ guide you could to to elaborate health be from how puts really you you and definition cited, is the positioned the brand

the Matt. take Thanks, first. And Friend, I'll Matt

So Matt just you tailwinds structural the Boss, described. we same see

them minute how grow not and tailwind again, the expand, by strategy athleisure. around to gain only it. an want give expanding to ago, geared sport, advantages are I they is simply as competitive definition being this but with market are. where movement related our consumers also blessed said of and when structural leverage health structural around particularly want, marketplace And they And We a tailwinds around our a wellness toward share, to

to mind. Two cannot is tell just important how I digital. our examples it One mobile is, come you apps.

in in EMEA, our fact, the APLA, over QX, North the or SNKRS, million In XXX doesn’t and four U.S. just apps, and and NIKE App, Mobile the mobile count NRC in China. visitors within NTC that's America, had quarter, even

consumers' pockets of and phones. cherish the position what no industry real means And their that. has So, we're in anything is, their of in privileged to we that there's one estate. on screens are – home That's the close that in in else being

shopping the of and huge And the It shopping and and help of a consumer team a is Collective. just when will Well team what is, this the women's our second consumer, around and sport, mobile they're NIKE women the sharp us out. consumers example us they're Amy style. talked around be browsing A through market gain about health is, and working [Amy connects doing wellness, leading us with fabulous her both It infused it's female occasions share. eyes [ph] remarks this insight the in give consumer, really to So, occasions our in will it SNKRS. job. intersection Montagne] all wellness have on advantage when grow and we because apps my globally community creates creates women's, and

distinction women nuanced style performance The of thing. for integrated a and and is more much

come our retail to to NIKE been storytelling Well have a to those Collective. both her NIKE so, we Live know. Well as Nike doors. but life, rebrand her you our will and Collective our is And a that We'll opening And Doors, and voice also branding way

the are fitness, you product, as strongly tell bras, performance women around NIKE around well. lifestyle around will and doors, leggings very Live which women's consumers, focused women's on I largely are performing

that women our And we're way, so access expanding in to consumers.

reiterates want us. want said they the to aggressive being in there continue strategy. a of where is, us I us, when and consumer marketplace they minute we'll we're want so, how what And that be ago our so It where really they

just the And question jump in on Matt, I'll revenue guidance. around

we start currency-neutral and on even with on XX% me saying a our at America basis, EMEA XXXX results our by incredibly delivered we're the just fiscal growth in And North look higher. year currency-neutral basis. that growth if was in a you growth by Let pleased

quarter When you drove the strong Direct grew retail then sales trend compare to year, versus the the NIKE to to our double-digit the reported fourth in into XX% revenue growth growth in growth consumer retail marketplace, we including across And the prior the fourth the year. quarter. continuing that throughout consumer sales

fourth terms strong that healthy to into we a the in continued sales moderated marketplace. of across So, marketplace, prioritize we and quarter, in in the but this still wholesale, retail remember growth trying sell drove

and the see pressure the approach it assessing then on with we we the see fiscal been trends As and we that around starts the consumer and taking pressure that guide, mid-single-digit consumer. look our potential health the we've ahead marketplace that XXXX to –

the second tighten so first prior made And And actually, to consumer the so, trend, retail half had and planning consistent our the expecting the retail we're the done for year, half of the to to first continue in growth consumer. buys look we we to a at a second retail sales and we sales are continue the decision that half trend of actually half, but fairly a continue a sales when of trend versus next we level year. to growth

to year. inventory the half, particular, we products look scaling manage year continuing with growth. brought about first to health. the them Direct marketplace market half that continue And NIKE The and we're to at continue just to distinction excited we next is we're the going when lead is new that this year and our second marketplace in in next manage to

We're introductions around excited that in XXXX, about wholesale energy revenue Olympics, for the includes then product on of NIKE. liquidation headwinds plus is Paris which we But the four that non-comp from wonderful shipment moment and full-year, new timing fiscal have. capturing the mid-single-digit some the year activities growth a accelerated of points and ultimately

environment, told number. all So, this a digits is in like we mid-single great feel

next. up Duffy And is Jim from Stifel

Thank you questions. taking for my

and inventory to marketplace. inventories, you the on improved the spoke progress great posture Some in an

across promotional Thank growth your the backdrop growth the fiscal factor you can business? DTC into mid-single-digit Just fiscal XXXX? in were then that thinking the you dynamics, expectations clearing promotional about inventory for elaborate to outlook and your XXXX, how does on competitive specifically the And you. very for for that, related

Sure. Well, we And general, happy that say, last highly finished the step we look promotional. when remains the actions we're marketplace where with the year, Jim, at would I and year. very we took in back

competition. year. good our units incredibly of total levels that are feel versus the down marketplace half of inventory going where next the inventory particular, are about inventory prior first at the NIKE-owned saw ahead We our the fact, In plan into ahead we year. and of in and plans And have we when we look we

large also elevating of trade-offs through have beautiful balancing job done through partners the inventory. retail majority moving moving connections, and a The our the the consumer inventory of strategic investing environment, and in

of are, even managing to And of through recognize so, we terms year. that they we is great about but partners pressure that to we our the continue how puts first promotional feel in where wholesale on be next think environment year, about going the half the and

well great And growth recovery of the price a focus year, extra mid-single-digit full that margin focus so, to were the when profitable believe growth and through both because year, price aggressive that sets for for fiscal are we growth, in EBIT us channels. a plan we line, comp reflect recall partner higher profitability. full also in attention The growth. and into for look see margin right as our non-comp does was a NIKE plan XXXX, at it's but on at recovering of I bit is growth level timing gross last of for and guide own as a you that wholesale from more our profitability next liquidation But I channels long-term late four inventory – XXXX, supply we on and of lot and points, I partially the feel which adjusting impacts, mentioned, shipment year moving headwind our came little up look there and like the XXXX

is Kate McShane, Your Sachs. question Goldman next

is This for filling our Roach question. Thank afternoon. you so in Kate. taking Good for much Brooke

transitory transitory anticipate You pressured and recapture what's the the remarks costs the around commented the to you still see in Thank prepared XXXX? you. have XXXX, horizon there. XXXX on we'll that corner start to And profitability and FY beyond? FY that speak on for to headwinds relief you Can your seeing about FY in cost some proportion of

Sure.

the So, look on about when we to at and the we've we growth made XXXX. in we our ended year healthy good ability drive inventory, where feel progress that really

the that And guide. we points, back margin and includes see operational you XX basis margins out gross by basis that FX, XXX so XXX guiding and approximately in We're XXX If – negative to points it's expansion. expand basis points basis margin point headwind. gross to FX our a of

majority headwinds. basis large The points beginning the recapture is of of XXX transitory the

transitory When talking we've are We headwinds, several will in higher product for by supply inflation been to benefits years. in chain. parts offset fiscal large and majority partially see but continue past the look costs at about our XXXX, being year the I structural our those of two of

freight and that halfway freight second Those negotiated XXXX, partners we've don't and rates is, logistics; kick-in through One second fiscal the is, ocean quarter. levels. are benefits rates We've liquidation. pre-pandemic the year our for and negotiated with one until now near

year in And that and so, then we'll tailwind see start come XXXX. in QX then and to in, accelerate and QX fiscal carry QX into

little that our we As but Jim bit an mix markdowns. for year in marketplace. as relates fiscal are baked the operate to promotional it the liquidation for continue a to we price I for recognize, question plans a And full we've planning answered impact, into XXXX, improvement earlier, in and we that

as extraordinary levels we a XXXX, and for year also And as of threshold you'll And comparing read result react. planned to XX% were that to those well in a above we're we've recall continue provided recovery so, that modest target. of realization, our fiscal And price to full that, the we going of costs. had

this instead, realization, full now living. but new we're of And recover point that planning at be of way time, so, operating the we're not to going also around we've back to that we at XX% will a in that level, level but seen or price

then we've things But that our more be going that as it beyond two focus to us that's that we margins there to – those our to or going give tailwind on look drivers we've benefit structural from than is the opportunity be confidence there's consideration, that margins from in to the about. us long-term and optimism going been sorry, the so, some some be freight even And achieving talking gives that taking provided. into can And some XXXX, that comes freight. come metric structural

next Cristina Fernandez, Telsey Advisory the question. Group has

the you're athletes big recovery and today about to ability in taking quarter? the thank the you if it when China? marketplace, progressed Hi, question. to wanted you see and versus influencers drive your different you look sales? I is talk And through seeing and how use that good overall, could just afternoon my your at pre-pandemic for to How

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so, continue invest And China. in to we'll

Our think, very very, well. China going I for is China strategy,

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the effort activity come best. the the position operating mono-brand the that last where you we that the three add had quarter thing I marketplace. in the stores in just full life is other over really reported. a taken see we've when think breadth inventory NIKE which the our improve another seasonal you full at in And that to and I to marketplace, quarters is, get We our would its where that you assortment, is of can see breadth a is great

and any that assortment Leading largest quarters. consumer with China our consumer healthy demand. we've breadth the penetration is drive we what the shows the depth that marketplace have improved in this terms geography bear full with can quarter, innovation, our of of for. John actually to inventory as we've of in when for operate that looking price of the is to what innovation the bring of highest we particular, we we and referenced position, stories in, seen our just of well eight saw of connects But and consumer a and strength And in the NIKE the selling level that

will today question final John Kernan our from come And TD Cowen.

the way margin terms takes of we long-term know targets think how maybe shift were I operating to Matt, a and long-term? margin wanted in of high-teens a Excellent. that back a but bit question. in of talk thinking issued back fiscal then, and Thanks and about we the mix for lot DTC? XXXX. And my just the margin go about taking the the to little do margin since are DTC still profile has puts changed

ago. a asked back the start question. you goals highlighted years I'll Well, progress in to and We're long-term the of couple the me John. we – substantial front Sure, towards let start with the I'll had making of that the terms come way

business XXXX, progress to we we've in Acceleration against our Consumer mix we the relative strategy. it. fiscal strategy has at been consumer-led Our when Direct significant And of Direct where year look were a in and made in Digital

based digital want to invest they wholesale to in or to product to the before find continue our that consumer fact in try the the channels channels shop choose that marketplace. in on and digital we stores they engage to to our our go in And least grow continues at

XX% Digital. fiscal And at we're very in pleased so, a today. and mix Direct XXXX with mix are We XX% where we year total in finished a

we not, company. exactly decide will the a endpoint. to going that a what we consumer long-term it and are really or more that be XX% Direct by whether doesn't I we're And mean confident But what land the ultimate matter. is is, more And at profitable

basis, at our And XXXX to fiscal for gross so, we're planning making year margin transitory we're back the expansion come significant when progress we I where the impacts. on prior for operational guidance to to were and an look that

drive of see difficult of We've to increasing value going predict. to – the us But creates then line to margin is, we for through mix when and channel opportunity And prices to as still to some benefits and products get we talking about quarters raise before. our our of line we the to the see an the having talked is that structural of long-term. include a opportunities we're end-to-end create in our to we've the the efficiency. cost couple that about price those Those product impact opportunities predict SKU time been simplification for there, cost of

of towards continuing even achieving we're predict we foreign going a cases, confident control goal. our direction. And order on the path we're exchange the on between a basis there, to last within at that headwinds long-term though time a that to that point XXX year these bit path high-XXs move this we're in that And to point, the margin gross to we in think get but exact do to on year. us got we're long-term difficult But this we've little it's are that and in goals, points more

to together in I'll channels our that Matt fuel That's has momentum team what just not her going offsite the Direct is ultimately line, had seeing product what's of week brings people thing accelerating to this to earlier Digital creation, people pace also Heidi the to John, the things and and on our key Matt, brings our best bottom consumer brand innovation, to the accelerating the the kids, with And design, that having And really innovation the build ability channels. of top teams, our is women's, men's, storytelling industry. whole only one the but says, our connect the line.

confidence feeling structure. of move is so, growing into the more momentum and And really as we this streamlined

like And thank to everyone, that for We you also conclude does conference our your session. participation. today. our for question-and-answer It concludes all would

You disconnect. may now