NIKE (NKE) 28 Sep 232024 Q1 Earnings call transcript

Good afternoon, everyone. Welcome to NIKE, Inc.'s Fiscal 2024 First 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. Paul Trussell. ahead. go Please

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

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

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

measures In unless refer nonpublic 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, are growth currency investors.nike.com, and noted. comparable the statistical today press basis NIKE's financial to and All

the Instructions] Inc. questions. We your cooperation. I'll will up Donahoe. John open start turn for over then with remarks for Thanks and and CEO, call to [Operator prepared now President NIKE,

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our question from take We'll Partners. Instructions] Bob [Operator first Drbul, Guggenheim

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from Straton, a Morgan take Stanley. we'll Alex question Next,

you focus kind running Perfect. on times the innovation that of of highlighted a number the to guys wanted on areas. I across just call

wanted I perhaps think it wanted didn't you had running or it said years, few launched more in as some but you as scale connect the to much you last you effectively.

what to you touch what the kind to plan do last differently could So that? just you approach few maybe reignite and on then in in of changed years NIKE's

Alex. Yes,

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is up And next Matthew JPMorgan. Boss,

Great.

forward. next just what curious share you Acceleration further maybe could any that underlying of Direct market drive trends to And we North I'm as you leg look demand that multiyear, any you early fall you're in seeing China. see America first progressed? gains see the to Consumer trends as John, the speak the both strategy So Or quarter and or then initiatives as

demand, that don't ] take first and the Matt, [indiscernible] I'll why the Actually, you [ and about close part in on second. the of take

into And sales a sales have what of difference what from as expect communicating go that of Matt, I the we unique mid-single-digit year. reporting into Sure. saw We because sell-in a we're dynamic referenced, we a as to reported growth we and quarter. this of couple is, the we're perspective quarter. we NIKE's Well, the that in quarters quarter, where saw or that's this retail of second last continue do because revenue restriction retail we place versus last put

we this perspective. When this we in like at so consumer Greater at big delivered the look so that sales for in long point we moments time, were quarter, you retail ago are with And mid-single-digit but seems and XXX in growth quarter on we planning performance building back And horizon. quarter at XXX Tmall to time momentum be the this when what China, school. quarter, school, we to line over from a impressive our we to saw heading saw #X outperformed throughout the sports the into growth brand And industry. back double-digit the over within look

what saw the high And we so by prior from partners single-digit in were anniversary-ing what strong we growth a in in consumer to growth seeing important Direct we're most NIKE year. encouraged quarter mentioned this our that were double-digit and we given low perspective. I

of continue ago. it as and digital locations. brick-and-mortar dynamics strategy of in we of starting right and So digital the that's resilient. There are strong. We some seeing is forward. And consumers our our demand proving years are couple consumer with believe we we physical partners very, for and our the this a XX% of shifting in continue to journeys to strategy brands terms serving quarter, to products be demand in from to their see for consumer growing, happening that very and is time But to spending Sport shopping saw our serve consumers are channels. more look so at be we

a see still We asked, structural in And if right? definition tailwinds same is some fundamentals, as just longer the extend little our out, are The sport -- we you Matt, back. bit step term, of which we the industry, expanding.

will of movement And like toward areas interaction favorite one the big huge elite with places X and lot last in who the other campus, of Asia -- in wellness here breakdancers the my of is movement months new Olympics and health seeing coming. compete a so on throughout had breakdancing and we've the Paris a dance some with of But market. and fitness dance,

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market we what to great do great in global do extraordinary storytelling see expand that growth; into future those great we Innovation we tailwinds. have we lifestyle got do women's. football. our strong plus to We've tailwinds. And believe with something those plus just And then so marketplace, makes in -- think and we're driving think, So Jordan, is drive as industry, has basketball, growth well. and And are structural our in growth. real industry the attractive. we this some will performance then great business we mentioned, great we our Running, growth. a continuing Matt quite

from Sole the UBS next question. Jay has

underlying about you're in long-term how guidance structural Can ago long-term context about talked of about NIKE's and for the ability for couple margin to you margins. time? high Matt, of gains the the get teens years gave a to you feeling margin talk Great. you seeing you're opportunity just profitability in a EBIT over

long-term fiscal that our I Jay. ability a we of drive reason Well, our feel achievable. what those us -- long-term I But are emphasize this is is really timing quarter proof a believe turning confident the the I that price 'XX in across structural growth. The all why is point profitable And feel that emphasized referenced, financial to But for we we with I value benefits goals margin value continue strongly and still year remain this profitability And the see Sure, predict. difficult the I gross to NIKE and that it with referenced, consumer and the point managing should to brand through say, our creating across I geos things ASPs for I our starts up in drivers, our structural products for NIKE quarter. products. pricing the to of drive more goals. strategic

of in channels. And to increased the We've able both few consumer service the order, like serve the examples it are in our the regional costs way doesn't overall our very a of opportunities the lowering seen where X And supply that to we've digital boxes are fulfillment demand we we saw years in to we're centers that be address of so our closer One continue efficiency greater to teams couple business, is size for the way chain outbound driving consumer now last investment see that benefit is. a focused get costs. our same mentioned shipments growth in demand on lowering consumer chain that reducing supply across in I our through quarter split some we of this the the digital. and and that

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margin So on company year, we our performance on believe the continue to based greater profitability corner for and starting to achievable. goals in gross our believe a plans this turning are these we we're to a the as And climb first quarter, as brand.

next The RBC. question comes Piral Dadhania, from

that be low a wanted your high whether their I QX, sales maybe registered single-digit to number. was that ask a whether Matt, your just period. the said would clarification very in could think Most just partners that a sell-out or was Any there have to I follow-up, answered, double-digit understand I number been helpful. you so sell-in clarification. growth in

That sellout a number. Sure. was That was a sales-to-consumer number.

We'll take from Jonathan next Komp, question Baird. our

thoughts the the the just unusual of as of segments? recovery shaping a balance picture, some would if any ask to to the you some follow-up, about of think China of second bigger quarter, I profitability the as willing sort look you Matt, and the the across in of any shape guidance share could year? the we could the And on just you're given seeing if then that comment of comparisons, and be sales you

so more as quarter, the delivered we the ensure of this is I marketplace remainder restricted expecting just to I did we to consumer, level the slightly to we've a so And we this that retail what the full the said second the X was set across we marketplace. versus up be that towards line to the with look in the expect year. that managed together, quarter really that to -- Matt's answer I'll second the our season mid-single be could last but we Sure. that quarter to sell-in digit right as prior was it growth year. are question relates and the connect Well, sales, the sellout

much QX, quality As delivering number the XX% the on what referenced in I is comparisons as growth the the the quarter. focused about we're and health more QX, far think go, growth neutral the I we're of wholesale currency and we're but in earlier, but comping that

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because So lower we through the as get the into this think rolling half second this about as of a going see even year. year We're product to into headwinds gross our quarter. in in expecting and our freight start bit the are to half, margins, see back to we're this FX costs to abate get we half little more those second and going ocean impact are we from midway of

of some year. the the will expansion we of balance those through drive increasing carry so elements And as margin

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we good feel well. quite with we feel that And so as

quarters are of because to exchange couple China of next the in headwinds. numbers challenging be reported foreign Our for going

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next to Sherman, We'll Aneesha go Bernstein.

strategy, shifted, NIKE you've of years. from points Digital a I X Wholesale more so as of result to the over direct-to-consumer mix last So sales or than your XX guess,

returning stores year. seeing You're to shoppers this

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

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