The paragraph is an introduction to NIKE, Inc.'s Fiscal 2025 Third Quarter Conference Call. The operator introduces Paul Trussell, Vice President of Corporate Finance and Treasurer, who then welcomes everyone and mentions that NIKE President and CEO, Elliott Hill, and CFO, Matt Friend, will be part of the call. Paul Trussell highlights that the call will include forward-looking statements subject to risks and uncertainties, as well as possible discussion of non-GAAP financial measures. He encourages participants to review related financial documents on NIKE's website. Elliott Hill then begins by expressing pride in the progress made over the past 90 days, acknowledging they met expectations but emphasizing a goal for further improvement.

The paragraph outlines NIKE's strategy to drive business growth through sports engagement and innovation. The focus is on sharing inspiring athlete stories, enhancing sports events, and launching new products. The author highlights the importance of strong partnerships, particularly in Asia, and emphasizes cultural and priority commitments within the company. Key strategic priorities, termed "Win Now," include fostering a winning culture, enhancing brand storytelling, and accelerating product portfolio development. Despite economic uncertainties, these actions are believed to propel progress.

The paragraph details NIKE's strategic efforts to enhance its market presence and brand visibility. It outlines key actions like supporting wholesale partners, repositioning NIKE Digital, and celebrating local athletes. One significant highlight was NIKE's involvement in the Super Bowl in New Orleans, where the brand showcased its partnership with the NFL through high-performance gear, iconic brand presence, and a notable ad campaign. Additionally, NIKE focused on grassroots initiatives, such as promoting girls' participation in flag football, and engaged with the community through pop-up retail spaces and events.

The paragraph discusses NIKE Inc.'s successful marketing campaigns following a major sports win, including the creation of themed ads for notable events like the Eagles' victory and an MVP award. During the NBA All-Star weekend in the Bay Area, NIKE and its brands, including Jordan and Converse, showcased their dominance in both performance and cultural impact. Events celebrated basketball's future and brand milestones, such as the debut of a new Converse signature shoe. NIKE's San Francisco flagship saw record sales, and partnerships with Foot Locker and Shoe Palace generated excitement. Moving forward, the strategy focuses on leveraging NIKE's brand portfolio and diversifying products to reduce reliance on established franchises.

The paragraph discusses Nike's strategy of diversifying its product lineup by promoting multiple styles rather than replacing existing iconic products. The focus is on segmenting wholesale partners, enhancing product presentations both digitally and physically, and executing strategic campaigns in key cities. Nike emphasizes performance by balancing new and scaling products, with the Pegasus Premium and Vomero 18 being highlighted as recent innovative releases. The Pegasus Premium features a unique air zoom unit for improved energy return, and the Vomero 18 targets everyday runners with its cushioning, both meeting strong market demand. Nike plans to expand the distribution of Vomero 18 and expects further product additions next fiscal year. For Nike's sportswear icons like Air Force 1, Dunk, and Air Jordan 1, the approach is about optimizing product sizing rather than discontinuation.

The paragraph outlines Nike's strategy for product diversification and innovation in the sportswear and footwear market. It highlights the successful growth of certain products, like the Vomero 5 and NIKE Shox, and the positive reception of new releases like the Air Superfly and LD1000. Air Max continues to evolve, with new innovations planned for FY 2026. In apparel, Nike is expanding beyond traditional categories with the 24/7 collection and a new brand collaboration, NIKESKIMS, aimed at combining style and performance. The company is focused on minimizing reliance on existing product lines, exploring market opportunities, and scaling globally.

The article emphasizes NIKE's commitment to expanding the market through innovative products across performance and sportswear categories for men, women, and kids, offered at various price points. The focus is on enhancing consumer experiences through an integrated marketplace, involving both NIKE Direct and wholesale partners in physical and digital formats worldwide. NIKE is working to restore its sales strategy and partner relationships by developing growth plans, creating consumer-centric assortments, engaging in early product feedback, and ensuring premium presentations. Digital changes are also highlighted, with a significant reduction in promotional days and discounting, particularly in North America.

The paragraph discusses NIKE's strategy to enhance content and storytelling, focusing on key performance areas and targeted geographical locations such as the United States, China, and the United Kingdom, and specific cities like New York, Los Angeles, London, Beijing, and Shanghai. NIKE aims to offer innovative products and establish a strong local brand presence while addressing Chinese market dynamics proactively. The company is prioritizing athletes and sports performance, with plans for consistent, long-term execution to capitalize on growth opportunities. Matt Friend adds that the team is working to reignite brand momentum and stabilize the business, noting that recent financial results reflect challenges associated with their "Win Now" initiatives.

In the third quarter, NIKE experienced a 9% decline in reported revenues and a 7% decline on a currency-neutral basis. Strong holiday sales in December, particularly from Cyber Monday, were offset by double-digit declines in January and February. NIKE Direct and NIKE Digital reported significant declines, while wholesale decreased mainly due to lower sales in Greater China. Gross margins fell to 41.5% due to increased markdowns and product costs. Despite a drop in operating overhead, SG&A was down 8% as brand and sports marketing investments increased. A one-time tax benefit lowered the effective tax rate to 5.9%, with earnings per share at $0.54. The Win Now strategy saw growth in performance segments like training and running, although this was offset by declines in NIKE sportswear and the Jordan brand.

The paragraph discusses NIKE's recent business adjustments and outcomes. NIKE Digital is being repositioned as a full-price business, leading to improved demand after reducing promotions in North America and EMEA. Wholesale partnerships have strengthened, with investments in product engagement and sales capabilities. While classic footwear franchises are declining, growth in performance categories like running and basketball is nearly offsetting these losses. Brand health initiatives have enhanced product launches and storytelling. Although inventory declined slightly, it remains high across regions due to prior purchasing decisions, with NIKE Direct buys as the main driver.

In the article's paragraph, Nike reports a stabilization in Air Force 1 inventory, ongoing strong demand for Air Jordan 1 and Dunk, and outlines their operational activities across North America and EMEA regions. In North America, Q3 saw a 4% revenue decline with digital and store sales falling, though wholesale sales rose 3% due to shipment timing and value partner orders. In EMEA, revenue dropped 6%, with digital sales significantly down, while store sales grew. The company highlighted strategic initiatives such as distributing core products, successful storytelling and sports events, product launches, and collaborations to enhance brand presence in physical retail spaces.

In Greater China, NIKE experienced a 15% decline in Q3 revenue, with significant drops in digital and wholesale channels. Despite challenging macro conditions and a promotional market, the brand saw strong demand for certain products like the Peg Premium and Kobe Protro. Efforts to clean up the marketplace negatively impacted revenue and gross margin, but the company remains focused on innovation and locally resonant products. In the APLA region, revenue declined by 4%, but Japan and Latin America returned to growth. NIKE's initiatives, such as the After Dark Tour and race events, boosted brand momentum in running communities despite mixed performance across territories.

The paragraph outlines NIKE's strategic plans to enhance its business balance and brand momentum. The company is accelerating its product portfolio transition by focusing on new sports performance products and reducing its reliance on classic footwear, planning a significant decrease in the latter by fiscal 2026. NIKE Digital is being repositioned within the marketplace by reducing promotions and markdowns, and moving liquidation to factory stores, which is expected to temporarily reduce digital traffic. However, organic traffic is anticipated to grow over time through new product launches and increased brand marketing. Additionally, NIKE is adopting a full-price business model for NIKE Digital and increasing markdowns in factory stores to move closeout inventory.

The paragraph outlines NIKE's strategies to address challenges with wholesale partners, including managing returns, adjusting supply, and offering discounts to clear older inventory, with these efforts expected to continue into fiscal 2026. The company aims to enhance product flow, brand engagement, and digital business alignment to support wholesale partners, targeting a return to growth. Progress varies by region, but collectively these efforts are designed to drive sustainable growth. For the fourth quarter, NIKE anticipates significant impacts from their "Win Now" actions, with expected mid-teens revenue decline and a 400-500 basis points reduction in gross margins. External factors such as geopolitical issues, tariffs, exchange rates, and tax regulations contribute to uncertainty, affecting consumer confidence. Despite these challenges, the guidance reflects NIKE's best assessment with current data, including shipment timing impacts in North America and foreign exchange headwinds.

The paragraph discusses NIKE's current strategic focus and outlook. The company is addressing the impact of new tariffs on imports and expects a slight increase in Q4 SG&A expenses. They emphasize tightly managing costs while investing in demand creation and innovation. NIKE anticipates other income and expenses to be between $45 million and $55 million and a mid-teens tax rate for the year. The leadership highlights the importance of serving athletes and reigniting brand momentum. Elliott Hill shares his commitment to reaffirming NIKE's identity as a sports company, drawing inspiration from interactions with figures like Coach Ryan Day to maintain a forward-focused mindset.

The paragraph presents a comparison between Ohio State's aggressive, relentless football strategy, as described by Coach Day, and NIKE's approach to success. The speaker appreciates the aggressive attitude and relates it to NIKE's strategy of not just protecting their position but actively setting trends and leading markets. The focus is on complete team commitment to maintain intensity, urgency, and passion to succeed collectively. Following this comparison, the conversation shifts to a Q&A session where Lorraine Hutchinson from Bank of America asks about the timeline for clearing classic shoe inventories in wholesale and direct channels. Elliott Hill emphasizes the importance of the strategies declared 90 days ago to ensure growth, suggesting confidence in the chosen actions to drive the brand and business forward.

The paragraph discusses a company’s strategic focus on enhancing their culture and product portfolio, particularly through a "Win Now" initiative. This strategy involves concentrating on five key sports—running, basketball, football, training, and sportswear—and targeting three countries and five cities to grow their marketplace. The company, which operates through brands like NIKE, Jordan, and Converse, plans to maintain a balanced product portfolio across various categories, including men's, women's, and kids' footwear and accessories. They are leveraging cross-functional teams to innovate and cater to specific sports markets. Additionally, they have significant experience in franchise management with iconic shoe models like the Air Force 1, Dunk, and A.J. 1, focusing on properly scaling rather than phasing them out.

The paragraph discusses the company's efforts to optimize its inventory and product portfolio, specifically focusing on reducing the supply of three key footwear franchises while introducing new products in the sportswear line, such as the Vomero 5 and Air Max models. Despite short-term challenges, including negative impacts on Q4 results, the company is confident in its strategies to drive innovation and reduce promotional efforts. By fiscal year 2026, they aim to significantly reduce the contribution of the three franchises to their overall footwear mix and are already taking steps on their Direct and Digital channels to minimize promotions and discounts.

The paragraph discusses NIKE's strategy for managing inventory and market presence. Toward the end of summer, NIKE tightened its digital sales and opted to transition excess inventory to factory stores, clearing it through value channels. On the wholesale side, investments are being made to clean up the marketplace in the first half of fiscal year 2026. Positive results are already visible, with Air Force 1 inventory stabilizing and growth in performance and sportswear categories almost offsetting declines in classic footwear. This approach reflects confidence in their partner engagements and market strategy. The paragraph concludes with an inquiry from an analyst, Brooke Roach from Goldman Sachs, who asks about the strength and direction of NIKE's innovation pipeline, particularly for fiscal 2026.

The paragraph discusses NIKE's innovation and product development strategy at the LeBron James NIKE Sports Research Lab. The company has a long-term focus, spanning three to five years, with a dedicated team led by John Hoke working on new innovations. In the short term, NIKE is driving innovation and fresh products across various categories, including men's, women's, and kids' sportswear, footwear, and accessories. The 24/7 apparel line and footwear innovations like the Vomero 5, P6000, and Shox are highlighted for their success and momentum. The Spring 2026 product review with global partners was positive, showing excitement for the upcoming products and demonstrating the company's focus on enhancing its product portfolio in running, basketball, football, training, and sportswear.

The paragraph is a discussion between Aneesha Sherman from Bernstein and Elliot Hill regarding the company's product pipeline and marketplace strategy. Hill expresses confidence in the innovation pipeline and highlights efforts to enhance retail presentations in wholesale and physical stores. Sherman inquires about the potential for performance growth to surpass declines in classics by Spring 2026 and asks Matt about expectations for gross margins as wholesale liquidations are addressed. Hill emphasizes confidence in the product pipeline and order book for upcoming seasons, stressing the importance of quickly cleaning up the marketplace to support brand and business growth.

The paragraph discusses the company's strategy to reset both digital and physical marketplaces to effectively present and sell new innovations, aiming to drive sales and achieve profitable, sustainable growth. Despite expecting temporary revenue and margin challenges in Q4 due to "Win Now" actions, the company anticipates these issues will moderate over time. They plan to focus on full-price selling and maintaining healthy order books while gradually liquidating inventory. The company is optimistic about their plan and confident in managing inventory through familiar channels.

The paragraph discusses NIKE's strategy for managing inventory and promotions while introducing new products. Simeon Siegel from BMO asks about balancing promotional activities and storytelling around new products. Elliott Hill responds by emphasizing NIKE's focus on removing underperforming products from both physical and digital markets through liquidation in value stores. This move aims to make room for new innovations. Additionally, the company's NIKE Direct Digital platform has shifted to a full-price model to enhance the user experience.

The paragraph discusses the company's strategy to quickly move both digital and physical retail setups to full price, using value channels to manage excess inventory. There is a focus on resetting the running category with new innovations like Peg Premium and Vomero 18, showcasing successful sales and diverse product ranges planned for 2026. Matt Friend emphasizes tight management of SG&A expenses while increasing investment in demand creation, highlighting successful marketing strategies around major events like the Super Bowl. The team is focused on maintaining expense control and addressing variable expenses from direct operations.

The paragraph highlights the company's efforts to improve productivity and manage expenses while focusing on investing in sales organizations and innovation. During a discussion, Alex Straton from Morgan Stanley asks about the wholesale channel, particularly about any surprises in returning to that model and its impact on margins. Elliott Hill responds by noting that previously the direct and wholesale channels might have been too siloed. He emphasizes the importance of integrating both channels to create a consistent ecosystem that aligns with consumer preferences across direct, wholesale, digital, and physical platforms.

The paragraph discusses recent leadership changes at NIKE, with Shannon Glass leading NIKE Direct and Erica Bullard overseeing sales, both working closely together to ensure an integrated market approach. The company is realigning its focus on strengthening relationships with wholesale partners through cross-functional teams, key account planning, and enhancing brand presentation. NIKE has prioritized its efforts in the United States, China, and the UK. The paragraph also touches on the challenges faced in wholesale profit margins due to supply chain disruptions and fluctuating ocean freight rates.

The paragraph discusses the company's efforts to manage channel profitability amid a demand-supply imbalance by adjusting wholesale discount rates. The aim is to ensure competitiveness and mutually profitable partnerships, allowing investment in brand presentation at retail. Elliott Hill emphasizes their global strategy, "Win Now," which focuses on consumer-centric approaches and is being implemented across 190 countries through four main geographical regions. This strategy is adaptable and applicable whether in the United States or Japan, focusing on aligning the right products, storytelling, and marketplace presence.

The paragraph discusses Nike's commitment to expanding its presence in China, highlighting the country's significant consumer base of 1.3 billion people. It mentions investments in sports teams and the introduction of a product creation arm called Geo Express Lane. Despite increased competition, Nike remains the number one brand in China and plans to accelerate its strategies, focusing on performance products and digital platforms. The company is working on cleaning up the promotional marketplace and collaborating with partners to implement consumer-led concepts. Overall, Nike is confident in its long-term opportunities in China.

In the paragraph, Matt Friend discusses the financial efforts undertaken in China during the quarter, highlighting actions such as marketplace returns, rebates, and inventory liquidation to facilitate their "Win Now" strategy. These aggressive steps are intended to quickly clear the marketplace, allowing for the introduction of new products and increasing consumer engagement. Although progress will take time, the goal is to improve traffic and momentum in the market. The paragraph concludes with an announcement that the question-and-answer session and conference call have ended.

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