The paragraph introduces the NIKE Inc. Fiscal 2024 Fourth Quarter Conference Call, with the operator announcing the speakers and providing a reminder about forward-looking statements and non-GAAP financial measures. The CEO, John Donahoe, briefly comments on the financial results, stating that revenue grew 1% for the full year and was flat for the quarter, with strong gains in Performance product.

Despite declines in lifestyle, Nike is making progress in their comeback through strategic shifts and a focus on sport and innovation. They have adjusted their playbook to compete and win, and are seeing momentum in all areas, especially in Performance. They have accelerated their innovation pipeline and are seeing double-digit growth in Performance as they prioritize speed to the consumer.

NIKE is focused on accelerating their innovation to deliver impact at scale and have implemented a new way of working called Speed Lane. This has already resulted in the acceleration of several new models and will continue to bring exciting new franchises to the market. The company's focus on newness and innovation is evident in their performance in key sports such as basketball, where they have seen double-digit growth driven by new products and partnerships with top athletes. They are also expanding their presence in women's basketball with the signing of new athletes and the launch of new signature franchises.

In this paragraph, the speaker discusses the success of the Jordan brand's marketing efforts during the NBA Finals, as well as the company's investments in the fitness market, particularly for female consumers. They highlight the growth in apparel and footwear, specifically in statement leggings and the Free Metcon shoe. The company is also focused on the road running market, with recent releases and simplifying their running construct at retail. They also mention the launch of the Pegasus 41, a new addition to their performance franchise.

NIKE's Peg 41 running shoe has received positive reviews and is supported by a comprehensive marketing campaign. The company plans to introduce more innovations in the second half of the year, including Pegasus Premium and Vomero 18. In the lifestyle category, NIKE has launched the Air Max DN, which has become a top-selling franchise and will continue to be developed with new iterations. The company is also focused on diversifying its lifestyle footwear portfolio and creating unique consumer benefits through innovation.

NIKE is diversifying its lifestyle portfolio by taking advantage of its unmatched vault and focusing on retro running. They expect to triple their retro-running business by the end of fiscal 2025. They are also reducing their three largest franchises to make room for new lifestyle offerings, with exciting footwear concepts coming in the second half of fiscal 2025. The Paris Olympics will be a pinnacle moment for NIKE to showcase their vision of sport and will be accompanied by a bold and clear brand campaign. The brand is regaining its edge and driving the business forward with the passion, clarity, and grit of its global team.

In the fourth quarter, NIKE faced challenges in their lifestyle business and saw a decline in their digital sales. Despite this, they remain confident in their long-term growth and are repositioning their portfolio to be more competitive. The decline in digital sales was due to lower traffic, higher promotions, and underperforming classic footwear franchises. However, these franchises are still driving retail sales growth at full price in multi-brand retail.

In this paragraph, the speaker discusses the various challenges faced by the company, including a decline in brick-and-mortar traffic in key markets, uneven trends in other markets, and foreign exchange headwinds. Despite these challenges, the company remains focused on returning to strong growth and has adjusted its plans for certain classic footwear franchises, particularly on NIKE Digital. The speaker also shares past examples of successfully rebalancing the company's portfolio in order to strengthen its competitive position and fuel brand momentum.

Nike has made strategic decisions to reduce supply of some classic franchises and focus on new models in their vault. This has led to positive growth in performance across all channels and geographies, and they plan to continue this momentum in fiscal 2025. They are also seeing strong growth in key focus areas and plan to scale new products in the spring of 2025. Nike is managing expenses tightly and reallocating resources to fuel their next phase of growth through their Safe to Invest initiative.

In fiscal 2024, the company has implemented cost-saving measures and plans to reinvest nearly $1 billion in consumer-facing activities in fiscal 2025. In the fourth quarter, revenue was down 2% on a reported basis but flat on a currency neutral basis. Gross margins expanded due to strategic pricing actions and improved supply chain efficiency, while SG&A was down 7%. The effective tax rate was lower and diluted earnings per share was $0.99, up 50% from the previous year.

In the fourth quarter, NIKE's revenue was flat on a reported basis and up 1% on a currency neutral basis. Diluted earnings per share grew 15% and cash flow from operations increased by 27%. The North America segment saw a decline in revenue, with NIKE Direct down 9%, but wholesale grew 6%. In EMEA, revenue grew 1% and in Greater China, revenue grew 7%. The company saw strong growth in basketball, fitness, and kids, but declines in lifestyle and Jordan. Performance innovation and new product releases drove strong sell-through in a cautious macro environment.

In this paragraph, the company discusses its financial performance for the quarter, highlighting a decline in traffic and sales across all marketplace channels. They also mention growth in their kids business and certain product categories. The China marketplace is described as highly promotional, but the company remains confident in its long-term competitive position. In another geography, revenue and EBIT grew, driven by strong momentum in performance and Jordan Brand. The company then explains that they are revising their outlook for fiscal 2025 due to a product cycle transition and shifting channel mix dynamics.

In summary, Nike expects a decline in reported revenue for fiscal 2025, with the first half seeing a larger decrease. This is due to factors such as lower traffic, declines in classic footwear franchises, increased macro uncertainty, and the scaling of product innovation. The company also expects a slight increase in SG&A expenses and a decrease in first quarter revenue due to various challenges and timing factors.

The speaker discusses the company's first quarter gross margins and SG&A, as well as their upcoming events and inspiration from athletes. They thank their employees and express confidence in the company's future. The speaker then addresses a question about changes in their outlook and gross margin, and mentions their comeback plan and continued execution.

Nike is working to put sport back at the center of their organization and has aligned their teams along sport-based lines. They have reignited their innovation pipeline and are pulling forward key innovations like the Peg Premium and Vomero 18. They are also focusing on building speed as a capability and strengthening their brand with campaigns like "Awaken Your Madness" and their upcoming Olympics campaign. On the marketplace side, they have been working closely with wholesale partners and have received positive feedback and strong order books. Overall, Nike feels they have made strong progress in executing their comeback strategy, which will take time. Financially, they have seen positive implications compared to 90 days ago.

In the last quarter, the company predicted a decline in revenue in the first half of the year, with a more significant impact in the first quarter. This was due to a decline in the lifestyle business on NIKE Digital, specifically in April and May. The company has updated its guidance to a mid-single digit decline for the full year, with factors such as foreign exchange, a softer outlook in China, and aggressive actions on key franchises driving the change. The first quarter was also impacted by timing, with the 6/18 period coming earlier and favorable shipment timing in North America. The company expects a significant improvement in the second half of the year.

John Donahoe discusses the intangible but important qualities of the NIKE team, such as their heart and hustle, teamwork, and focus on the consumer. He also mentions that the team is feeling more confident. In response to a question about second-half improvements, Donahoe explains that they have considered various factors and scenarios, but the biggest impact on the first half is the adjustments being made to manage the health of their franchises, particularly in NIKE Digital. This is expected to have a significant impact on revenue in the first half.

The company plans to maintain the impact of its franchises in the multi-brand environment by reducing offerings through its digital channel. The second half is expected to see significant improvement due to the launch of new products and scaling of innovation. The company is confident in the indicators seen in the marketplace and the initial read of the spring order book. The second question is about the visibility of the business, which was discussed in response to a previous question.

Nike CEO John Donahoe discusses the company's visibility and ability to predict shifts in the business, particularly in regards to the channel shift from wholesale to direct and digital. He acknowledges that the company was surprised by the results in the fourth quarter, which led to a revision of guidance. However, he expresses confidence in the company's ability to drive growth in the digital business and manage franchises, and states that adjustments have been made based on data and insights to improve predictability. Donahoe is optimistic about the future of the company.

The company had a lower number of launches planned for Q4 due to a large number of launches in the previous year. The digital business was healthy and showed growth, but there may be a headwind in channel mix in fiscal year 2025. Despite this, margins are still expanding and the company believes there are other opportunities for profitable growth. The company aims to be where the consumer is, whether it be digital, outdoor, or wholesale, and evidence of a healthy marketplace is seen in double-digit growth in performance, wholesale, and digital.

NIKE has had a successful launch of Peg 41 in both wholesale and NIKE Direct channels. The company is focused on providing new and innovative products to consumers and has a strong pipeline for the next six to 12 months. They have set a goal to double the growth of their new innovations by 2025 and have received positive feedback from wholesale partners on their upcoming products.

The feedback from wholesale customers has been positive, and the company's goal is to consistently deliver strong innovations and sustainable growth. The lifestyle side of the business has also seen success in creating demand for new products, such as the Dunk franchise, which has grown significantly in the past three years. The company plans to continue utilizing its vault of assets to bring new products to market and capture consumer demand.

The speaker, John Donahoe, responds to a question about the importance of NIKE's larger classic franchises and their impact on the company's sales compared to historical averages. He explains that these franchises are the largest in industry history and have been successful due to consumer demand. The company has been intentionally managing these franchises in order to increase newness and balance in their portfolio. This will have a significant impact on their financial outlook for FY 2025 as they restrict supply and create better balance in their product offerings.

The speaker discusses the actions being taken at NIKE to address challenges and transitions in product cycles. They mention the company's history of successfully moving consumers to new products through aggressive actions and effective marketing. Looking beyond 2025, the speaker addresses potential changes in channels, geographies, and franchises, and discusses the potential for future growth through innovation and leveraging performance to drive lifestyle products.

John Donahoe and Matthew Friend discuss the tailwinds in the sports industry, such as the growing focus on healthy lifestyles globally and the blurring line between sport and lifestyle. They also mention the opportunity for sport-based lifestyle innovation in footwear and apparel, particularly in the men's, women's, and kids' categories and with Jordan Streetwear. Additionally, they highlight the consumer's desire for comfort, which is reflected in Nike's focus on fit and comfort in their products like the Peg Premium, Peg 41, and Vomero 18. These products are expected to be popular not only for performance but also for lifestyle use.

Matt discusses the challenges of balancing consumer demand for both performance and innovation while also leveraging the company's vault to bring back classic products. He also mentions the importance of driving unit growth and taking back market share, but acknowledges that the product transition will take time. An updated outlook on growth and profitability will be provided at the Investor Day in November, considering marketplace dynamics, the product transition, and strategic shifts implemented over the past year. Aneesha Sherman from Bernstein asks a follow-up question about the challenges of private life cycle management in the next few quarters.

The company is expecting to see improvements in their top line performance by the end of the fiscal year through aggressive actions in their own channels. This will also involve reducing supply in the broader marketplace and scaling newness throughout the year. The company expects to exit the year with momentum and for new products to outweigh the impact of franchise management. The majority of the $2 billion cost reallocation is expected to be completed in the first half of the year.

The company is focused on managing their franchises in line with consumer demand and driving energy around new products. The organizational reset is behind them and the teams are now focused on driving growth and innovation. The company has reallocated a billion dollars into consumer-facing activities and has invested in product design and building out the merchandising function. They have also created sport-focused teams and are putting more investment into demand creation while managing operating overhead tightly.

In fiscal year 2024, the company made efforts to manage operating overhead and reallocate resources to reignite brand momentum and attract consumers. The company plans to continue managing expenses tightly and investing in initiatives to drive growth. The CEO thanked the company's employees for their hard work and emphasized that their culture and people are their competitive advantage. The call concluded with an invitation to attend the upcoming Investor Day in November.

This summary was generated with AI and may contain some inaccuracies.