Q4 2024 Nike Inc Earnings Call

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Operator: Good afternoon, everyone. Welcome to Nike Inc.'s fiscal 2024 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 Corporate Finance and Treasurer. I would now like to turn the call over to Paul Trussell. Thank you, operator.

Speaker Change: Good afternoon, everyone. Welcome to Nike Inc.'s fiscal 2024 fourth quarter conference call.

Paul Trussell: Hello, everyone, and thank you for joining us today to discuss Nike Inc.'s fiscal 2024 fourth quarter results. Joining us on today's call will be Nike President and CEO John Donahoe and our CFO Matt Friend. Before we begin, let me remind you that participants on this call will make forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in Nike's reports filed with the SEC. In addition, participants may discuss non-GAAP financial measures and non-public financial and statistical information.

Paul Trussell: Please refer to Nike's earnings press release or Nike's website, investors.nike.com, for comparable gap measures and quantitative reconciliation. All growth comparisons on the call today are presented on a year-over-year basis and are currency neutral unless otherwise noted. We will start with prepared remarks and then open up for questions. We would like to allow as many of you to ask questions as possible in our allotted time. So we would appreciate it if you limited your initial question to one. Thanks for your cooperation on this.

Speaker Change: These risks and uncertainties are detailed in Nike's reports filed with the SEC.

Speaker Change: In addition, participants may discuss non-GAAP financial measures and nonpublic financial and statistical information.

Speaker Change: Please refer to <unk> earnings press release, our Nike's website investors Nike Dot com for comparable GAAP measures and quantitative reconciliations.

Speaker Change: All growth comparisons on the call today are presented on a year over year basis, and our currency neutral unless otherwise noted.

Speaker Change: We will start with prepared remarks, and then open up for questions. We would like to allow as many of you to ask questions as possible in our allotted time. So we would appreciate you limiting your initial question to one thanks for your cooperation on this I will now turn the call over to Nike, Inc, President and CEO John Donahoe.

Paul Trussell: I'll now turn the call over to Nike Inc. President and CEO John Donahoe. Thank you, Paul. And hello to everyone on today's call. I want to start by briefly commenting on our financial results. For full year fiscal 24, revenue grew approximately 1% on a currency-neutral basis, and earnings per share grew 15%. Q4 revenue was flat.

John J. Donahoe: For the quarter, we saw strong gains within performance products. However, this was more than offset by declines in lifestyle. These declines had a pronounced impact on our digital results. These factors, when combined with increased macro uncertainty and worsening foreign exchange, have caused us to reduce our guidance for Fiscal 25.

John J. Donahoe: Thank you Paul and Hello to everyone on today's call I want to start by briefly commenting on our financial results.

John J. Donahoe: For full year fiscal 'twenty four revenue group revenue grew approximately 1% on a currency neutral basis and earnings per share grew 15%.

John J. Donahoe: Q4 revenue was flat.

John J. Donahoe: For the quarter, we saw strong gains within performance product.

However, this was more than offset by declines in lifestyle. These declines had a pronounced impact on our digital results.

John J. Donahoe: These factors when combined with increased macro uncertainty and worsening foreign exchange have caused us to reduce our guidance for fiscal 'twenty five.

John J. Donahoe: Matt will provide more detail on our results and outlook later in the call. While Fiscal 25 will be a transition year for our business, we continue to make real progress on our comeback. Over the past year, we've highlighted the strategic shifts we're taking as a company, including leadership and organization changes, kick-starting a multi-year innovation cycle, and creating capacity to invest in consumer-facing activities. As I mentioned in last quarter's call, we're making a series of adjustments to position us to compete and win.

Speaker Change: Matt will provide more detail on our results and outlook later in the call.

Speaker Change: While fiscal 'twenty five will be a transition year for our business, we continue to make real progress on our comeback.

Speaker Change: Over the past year, we've highlighted the strategic shifts we are taking as a company include.

Speaker Change: Including leadership and organization changes Kickstarting, our multiyear innovation cycle, and creating capacity to invest in consumer facing activities.

Speaker Change: As I mentioned in last quarter's call, we're making a series of adjustments to position us to compete and win.

John J. Donahoe: We're sharpening our focus on sports, accelerating our pace and scaling of newness and innovation, driving Bigger, Bolder Storytelling, and elevating the entire marketplace to fuel brand distinction and be the path of the consumer. This is our playbook, and we're seeing momentum build in all four areas, particularly on the performance side of our product portfolio. We have work to do, but we're on it.

Speaker Change: We're sharpening our focus on sport.

Speaker Change: Accelerating our pace and scaling of newness and innovation.

Speaker Change: Driving bigger bolder storytelling.

Speaker Change: And elevating the entire marketplace to fuel brand distinction and being in the path of the consumer.

This is our playbook and we're seeing momentum build in all four areas, particularly on the performance side of our product portfolio.

Speaker Change: We have work to do but we're on it our teams are moving with energy and urgency against the opportunity we see in front of us.

John J. Donahoe: Our teams are moving with energy and urgency against the opportunity we see in front of us. Now, as we've discussed over the past few quarters, we've been accelerating our innovation pipeline, including pulling forward several innovations some for more than a year. We're moving aggressively to reestablish our innovation edge. We began with a focus on performance, as Nike always does, and the early results from newness and innovation are encouraging. Performance grew double digits in the quarter, with growth in many of our key sports.

Now as we've discussed over the past few quarters.

Speaker Change: We've been accelerating our innovation pipeline, including pulling forward several innovations some more than a year.

Speaker Change: We're moving aggressively to reestablish our innovation edge.

Speaker Change: We began with a focus on performance as Nike always does.

Speaker Change: And the early results for newness and innovation are encouraging.

Speaker Change: Performance grew double digits in the quarter with growth in many of our key sports.

John J. Donahoe: And as we've kicked off our multi-year innovation cycle, one of our key priorities has been increasing our speed to the consumer. We believe accelerating the pace and consistency of our innovation will allow us to deliver impact at scale, season after season. Now, as you know, for years, Nike has had an express line, which enables short lead time replenishment and hyper local design, and we'll continue to leverage Express Plane. But over the past year, we have also built a new way of working across the entire product creation process.

And as we kicked off our multiyear innovation cycle, one of our key priorities has been increasing our speed to the consumer.

Speaker Change: We believe accelerating the pace and consistency of our innovation will allow us to deliver impacted scale season after season.

Speaker Change: Now as you know for years Nike has had an express lane, which enables short lead time replenishment and hyper local design.

Speaker Change: And we will continue to leverage Express lane.

Speaker Change: But over the past year, we have also built a new way of working across the entire product creation process.

John J. Donahoe: We call this Speed Lane, and it's part of a broader company-wide effort to move faster and be more responsive to the consumer. For example, through Speedlane, we're leveraging our Bowerman Footwear Lab to accelerate design. We're leveraging advanced digital tools to quicken development, and we're leveraging key manufacturing partners to speed up product testing and production. We've already accelerated half a dozen models with this new capability.

Speaker Change: We call this speedway and it's part of a broader company wide effort to move faster and be more responsive to the consumer.

Speaker Change: For example through speed Lane, we're leveraging our Bauer mens footwear lab to accelerate design.

Speaker Change: We're leveraging advanced digital tools to quick in development.

Speaker Change: And we're leveraging key manufacturing partners to speed up product testing and production.

Speaker Change: We've already accelerated a half a dozen models through this new capability and in the second half of the fiscal year Youll see other new innovations come out of speed lane, including several exciting new franchises across fitness and lifestyle.

John J. Donahoe: And in the second half of the fiscal year, you'll see other new innovations come out of Speed Lane, including several exciting new franchises across fitness and lifestyle. As I've mentioned, our sharp focus on newness and innovation starts with performance, and we're seeing the impact across key sports. Let me give you a few brief examples across three, basketball, fitness, and running.

Speaker Change: As I've mentioned, our sharp focus around newness and innovation starts with performance and were seeing the impact across key sports. Let me give you a few brief examples across three basketball fitness and running.

John J. Donahoe: First, basketball, which was up double-digit growth in Q4 across men's, women's, kids', and Jordan's. This was driven by new innovation from the GT Cut to Kobe's new footwear and apparel to the Sabrina One, which, in itself, has taken two points of share across the entire US basketball market, including both men's and women's. We recently announced Sabrina's Next Shoe, as well as Asia Wilson's signature franchise, and we announced the signing of Caitlin Clark to a roster of athletes that was already the game's best.

First basketball, which was up double digit growth in Q4 across men's women's kid's and Jordan.

Speaker Change: This was driven by new innovation from the GT cut Jacoby, new footwear and apparel to the Sabrina one.

Speaker Change: Which in and itself has taken two points of share across the entire U S basketball market, including both mens and womens.

Speaker Change: We recently announced Sabrina next shoe as well as Asia Wilson signature franchise.

Speaker Change: And we announced the signing of Caitlin Clarke to our roster of athletes that was already the game's first.

John J. Donahoe: All this energy will continue to fuel the rapid growth of our women's basketball business, as excitement around the WNBA soars to historic highs amidst an expanding fan base. And, of course, this month's Jason versus Luca NBA Finals matchup marked the first time Jordan's signature athletes met on basketball's pinnacle stage.

Speaker Change: All of this energy will continue to fuel the rapid growth of our women's basketball business as excitement around the WNBA soars to historic highs.

Speaker Change: Amidst an expanding fan base.

Speaker Change: And of course, this month's adjacent versus Luca NBA finals matchup marked the first time Jordan signature athletes met on basketball clinical stage we.

John J. Donahoe: We celebrated Jason's title with one of the Jordan brand's biggest marketing efforts ever. Next, let's look at our fitness business. Fitness represents one of the largest market share opportunities we see as a company, particularly for our female consumer. We've made intentional decisions to make meaningful investments in fitness, and these actions are paying off.

Speaker Change: We celebrate adjacent title with one of the Jordan brand the biggest marketing efforts ever.

John Donahoe: Next, let's look at our fitness business. Fitness represents one of the largest markets or opportunities we see as a company, particularly for our female consumer. We've made intentional decisions to make meaningful investments in fitness, and these actions are paying off. Over the past quarter, we saw broad-based growth for fitness led by double-digit growth in apparel.

Speaker Change: Next let's look at our fitness business.

Speaker Change: Fitness represents one of the largest markets for opportunities, we see as a company, particularly for our female consumer.

Speaker Change: We've made intentional decisions to make meaningful investments in fitness.

And these actions are paying off over.

John J. Donahoe: Over the past quarter, we saw broad-based growth for fitness led by double-digit growth in apparel. For example, statement leggings, which is the key focus for us, were up high by double digits in Q4, led by innovations we've introduced over the past few quarters with Universa, Zenvee, and Go. Women's Fitness Footwear also had a strong quarter, driven by Motiva and the latest version of FreeMetCon, which came out last summer.

Speaker Change: Over the past quarter, we saw broad based growth for fitness led by double digit growth in apparel.

John Donahoe: For example, statement leggings, which is the key focus for us, we're up high double-digit in Q4. Led by innovations we've introduced over the past few quarters with Universal Zenbi and Go. Women's fitness footwear also had a strong quarter, driven by Motiva and the latest version of FreeMetCon, which came out last summer. FreeMetCon is now Nike's number one women's fitness shoe, having expanded from the gym to the street.

Speaker Change: For example statements leggings, which is a key focus for us were up high double digits. In Q4 led by innovations we've introduced over the past few quarters with universe Zandy NGO.

Speaker Change: Women's fitness footwear also had a strong quarter driven by Motiva <unk>.

Speaker Change: And the latest version of free Metcom, which came out last summer.

John J. Donahoe: Freemedcon is now Nike's number one women's fitness shoe, having expanded from the gym to the street. Next, let's look at road running, which remains a competitive battlefield, but we are playing to win.

Speaker Change: <unk> is now Nike's number one women's fitness shoe, having expanded from the gym to the street.

John Donahoe: Next, let's look at road running, which remains a competitive battlefield, but we are playing to win. In past calls, we discussed that we're now aligned, resourced, and taking this challenge head-on with confidence. We've been hustling to accelerate our running innovations, and amplify our ground gain. While our overall running business was impacted in Q4 by our proactive actions to manage the Pegasus portfolio transition, we're pleased that recent new releases in Vomero, Invincible, and Kennedy Instructure all grouped high double-digits over the quarter. We're making it easier for consumers to discover these styles by simplifying our running construct at retail, as we highlight our best-in-class cushioning technologies.

Speaker Change: Next let's look at road running which remains a competitive battlefield.

Speaker Change: We are playing to win.

John J. Donahoe: In past calls, we've discussed that we are now aligned, resourced, and taking this challenge head on with confidence. We've been hustling to accelerate our running innovation and amplify our ground game. While our overall running business was impacted in Q4 by our proactive actions to manage the Pegasus portfolio transition, we're pleased that recent new releases in Vimero, Invincible, Infinity, and Structure all grew in high double digits over the quarter. We're making it easier for consumers to discover these styles by simplifying our running construct at retail as we highlight our best-in-class cushioning technology.

In past calls we've discussed that we're now aligned resource and taking this challenge head on with confidence we've been hustling to accelerate our running innovations and amplify our ground game.

Speaker Change: While our overall running business was impacted in Q4 by our proactive actions to manage the Pegasus portfolio transition.

Speaker Change: Were pleased that recent new releases in <unk>, Invincible Infinity and structure all grew high double digits over the quarter.

Speaker Change: We're making it easier for consumers to discover these styles by simplifying our running construct at retail as we highlight our best in class Cushioning technologies.

John J. Donahoe: Now, as you know, a few weeks ago, we launched the Pegasus 41, a new chapter for Nike's biggest performance franchise. PEG-41 pairs Zoom Air with full-length ReactX foam for a ride that's more comfortable, durable, and responsive than ever.

John J. Donahoe: Now, as you know, a few weeks ago, we launched the Pegasus 41, a new chapter for Nike's biggest performance franchise. Peg 41 pairs Zoomare with full length React X foam for a ride that's more comfortable, durable, and responsive than ever. It's received strong reviews from industry experts. We supported the 41 with our full playbook, backed by Nike's most comprehensive running campaign in years, which will last for several seasons. It was also a fuel by a refreshed ground gain. This included neighborhood activations to drive consumer trialing at scale and building energy across the full marketplace, including Nike Direct, our strategic partners, and our performance authenticators such as running specialty doors.

Speaker Change: Now as you know a few weeks ago, we launched the <unk> 41, a new chapter for Nike biggest performance franchise.

Speaker Change: <unk> 41 per zoom air with full length react X foam for a ride, it's more comfortable durable and responsive than ever.

John J. Donahoe: It has received strong reviews from industry experts. We supported the 41 with our full playbook, backed by Nike's most comprehensive running campaign in years, which will last for several seasons. It was also fueled by a refreshed ground game, including neighborhood activations to drive consumer trialing at scale and building energy across the full marketplace, including Nike Direct, our strategic partners, and our performance authenticators, such as running specialty doors. This energy drove PEG-41 to a strong start, led by better-than-expected sell-through in both wholesale and Nike Direct.

Speaker Change: It has received strong reviews from industry experts.

Speaker Change: We supported the 41 with our full playbook backed by Nike's, most comprehensive running campaign in years, which will last for several seasons.

Speaker Change: It was also fueled by a refreshed ground game.

Speaker Change: This included neighborhood Activations to drive consumer Trialing at scale and building energy across the full marketplace, including Nike direct our strategic partners and our performance authenticators such as running specialty doors.

John J. Donahoe: This energy drove Peg 41 to a strong start, led by better-than-expected self-ru in both wholesale and Nike Direct.

Speaker Change: This energy drove <unk> 41 to a strong start led by better than expected sell through in both wholesale and Nike direct.

John J. Donahoe: And her full running journey for Fiscal 25 goes beyond the PEG 41 launch. We'll be adding several dimensions for PEG in Holiday before introducing additional exciting innovations in the second half of the year, including Pegasus Premium and Bromero 18.

John J. Donahoe: At our full running journey for fiscal 25 goes beyond the Peg 41 launch, we'll be adding several dimensions for Peg in holiday before introducing additional exciting innovations in the second half of year, including Pegasus Premium and Vermarrow 18. We're already seeing strong wholesale orderbook for running across the next few seasons, as we continue to take meaningful strides to assert our leadership in this key sport.

And our full running journey for fiscal 'twenty five goes beyond the peg 41 launch we will be adding several dimensions for peg and holiday before introducing additional exciting innovations in the second half of the year, including <unk> premium and primarily <unk>.

John J. Donahoe: We're already seeing strong wholesale order books for running across the next few seasons as we continue to take meaningful strides to assert our leadership in this key sport. Now let's talk about lifestyle, where we're focused on building a more diversified lifestyle footwear portfolio to complement the industry's three largest franchises. We're excited about our pipeline of new lifestyle products. A key example was last quarter's introduction of Dynamic Air, our newest breakthrough innovation platform. We launched the Air Max D.N. globally, and within just a few months, D.N.

We're already seeing strong wholesale order book for running across the next few seasons as we continued to take meaningful strides to assert our leadership in this key sport.

John Donahoe: Now let's talk about lifestyle, where we're focused on building a more diversified lifestyle footwear portfolio, the complimentary industries, three largest franchises. We're excited about our pipeline of new lifestyle products. A key example was last quarter's introduction of Dynamic Air, our newest breakthrough innovation platform. We launched the Airmax DN globally, and within just a few months, DN has become a top 10 lifestyle franchise in our men's business and is resonating particularly well with sneaker-engaged consumers in major cities. And importantly, Dynamic Air is an innovation platform. We're already working on the two next two iterations of dynamic air, and we will continue to innovate in this platform, including customizing air cushioning to create unique consumer benefits.

John J. Donahoe: has become a top 10 lifestyle franchise in our men's business and is responding particularly well with sneaker-engaged consumers in major cities. And importantly, Dynamic Air is an innovation platform. We're already working on the next two iterations of Dynamic Air, and we will continue to innovate on this platform, including customizing air cushioning to create unique consumer benefits. Another component of fueling a more diversified lifestyle portfolio is taking advantage of Nike's unmatched archives. What examples are there of retro running?

Speaker Change: Now, let's talk about lifestyle, where we're focused on building a more diversified lifestyle footwear portfolio to complement the industry's three largest franchises.

Speaker Change: We're excited about our pipeline of new lifestyle product.

Speaker Change: A key example was last quarter's introduction of dynamic are our newest breakthrough innovation platform we.

We launched the air Max Dia and globally and within just a few months <unk> has become a top 10 lifestyle franchise in our men's business and is resonating, particularly well with sneaker engage consumers in major cities.

Speaker Change: And importantly, dynamic air is an innovation platform.

Speaker Change: We're already working on the two next two iterations of dynamic here and.

And we will continue to innovate on this platform.

Speaker Change: Including customizing air cushioning to create unique consumer benefits.

John Donahoe: Another component of fueling a more diversified lifestyle portfolio is taking advantage of Nike's unmatched vault. One example is retro running. We saw an opportunity in the marketplace for retro and move quickly and nimbley to fill it with our Y2K portfolio, and consumers are responding. We experience significant quarter-over-quarter retail sales growth for Y2K, and now expect to nearly triple our retro running business by the end of fiscal 25 compared with the start of fiscal 24.

Speaker Change: Another component of fueling a more diversified lifestyle portfolio is taking advantage of nike's unmatched fault.

Speaker Change: One example is retro running.

John J. Donahoe: We saw an opportunity in the marketplace for retro and moved quickly and nimbly to fill it with our Y2K portfolio, and consumers are responding. We experienced significant quarter over quarter retail sales growth for Y2K and now expect to nearly triple our retro running business by the end of fiscal 25 compared with the start of fiscal 24. Now, while we are growing new lifestyle offerings, we're also accelerating planned reductions for our three largest franchises, and this will have a meaningful impact in the near term on our overall lifestyle growth rate.

Speaker Change: We saw an opportunity in the marketplace for retro and moved quickly and nimbly to fill it with our <unk> portfolio.

Speaker Change: And consumers are responding.

Speaker Change: We experienced significant quarter over quarter retail sales growth for <unk> and now expect to nearly triple our retro running business by the end of fiscal 'twenty five.

Speaker Change: Paired with the start of fiscal 'twenty four.

John Donahoe: Now, while we are growing new lifestyle offerings, we're also accelerating planned reductions for our three largest franchises. And this will have a meaningful impact near-term on our overall lifestyle growth rate. Now, while we have work to do, we are very focused on scaling the newness to offset this planned reduction, and we're excited about the pipeline with exciting footwear concepts coming in the second half of fiscal 25.

Speaker Change: Now, while we are growing new lifestyle offerings. We're also accelerating planned reductions for our three largest franchises.

Speaker Change: And this will have a meaningful impact near term on our overall lifestyle growth rate.

John J. Donahoe: Now, while we have work to do, we are very focused on scaling the newness to offset this planned reduction. And we're excited about the pipeline, with exciting footwear concepts coming in the second half of Fiscal 25. Finally, the Paris Olympics offers us a pinnacle moment to communicate our vision of sport to the world.

Speaker Change: Now while we have work to do we are very focused on scaling the newness to offset this planned reduction.

Speaker Change: And we're excited about the pipeline with exciting footwear concepts coming in the second half of fiscal 'twenty five.

John Donahoe: Finally, the Paris Olympics offers us a pinnacle moment to communicate our vision of sport to the world. This is led by breakthrough innovation, and announced by a brand campaign that you won't be able to miss. We recently unveiled our air for athletes innovation at our Nike Unair event in Paris, and we can't wait to bring all this Olympics product to life across the games, and in more than 8,000 doors worldwide, and throughout our brand storytelling will be bold and clear, with sport and athletes at the very center of it all, from brand voice to retail activations.

Speaker Change: Finally.

Speaker Change: The Paris Olympics offers us a pinnacle moment to communicate our vision of sport to the world.

John J. Donahoe: This is led by Breakthrough Innovation and announced by a brand campaign that you won't be able to miss. We recently unveiled our Air for Athletes innovation at our Nike OnAir event in Paris. And we can't wait to bring all this Olympic product to life across the game and in more than 8,000 stores worldwide. And throughout, our brand storytelling will be bold and clear, with sport and athletes at the very center of it all, from brand voice to retail activation.

Speaker Change: This is led by breakthrough innovation and announced by a brand campaign that you won't be able to miss.

Speaker Change: We recently unveiled our air for athletes innovation at our Nike on Air event in Paris.

Speaker Change: And we can't wait to bring all this olympics product to life across the gains.

Speaker Change: And in more than 8000 doors worldwide.

Speaker Change: And throughout our brand storytelling will be bold and clear with sports and athletes at the very center of it all from brand voice to retail Activations.

John J. Donahoe: This summer, we will cut through the clutter to create powerful energy for the Nike brand. We're back doing what we do best, creating impactful storytelling and ultimately brand distinction in sports. We're taking our challenges head on, and we're regaining our edge. Thanks to the heart and hustle of our global team, we're aggressively asserting the future of Nike. With passion, clarity, and grit, we're driving this business forward. We're excited about the opportunity in front of us, and we're eager to prove what Nike can do. And with that, I'll turn the call over to Matt.

John J. Donahoe: This summer, we will cut through the clutter to create powerful energy for the Nike brand. We're back doing what we do best, creating impactful storytelling, and ultimately brand distinction in sport.

Speaker Change: This summer, we will cut through the clutter to create powerful energy for the Nike brand.

Speaker Change: We're back doing what we do best creating impactful storytelling, and ultimately brand distinction and sport.

John J. Donahoe: In the end, we're taking our challenges head on, and we're regaining our edge.

Speaker Change: In the end.

Speaker Change: We're taking our challenges head on and we're regaining our edge.

John Donahoe: Rich. Thanks to the heart and hustle of our global team, we're aggressively asserting the future of Nike. With passion, clarity, and grit, we're driving this business forward. We're excited about the opportunity in front of us, and we're eager to prove what Nike can do.

Speaker Change: Thanks to the heart and hustle of our global team, we're aggressively asserting the future of Nike.

Speaker Change: With passion clarity and grid, we're driving this business forward.

Speaker Change: We're excited about the opportunity in front of us and we're eager to prove what Nike can do.

Matt: And with that, I'll turn the call over to Matt. Thanks, John, and we'll load everyone on the call. For Nike, fiscal 24 was a pivotal year to get back on the offense and sport with consumers. Led by an urgency to accelerate our pace of innovation and scale newness across our product line. Today, our playbook is in motion. Our teams are focused and hustling to deliver. And we're seeing positive signals from consumers and retail partners across the world. That said, this quarter we've been navigating several headwinds, which we now expect to have a more pronounced impact on fiscal 25.

Speaker Change: And with that I'll turn the call over to Matt.

Matthew Friend: Thanks, John, and hello to everyone on the call. For Nike, Fiscal 24 was a pivotal year to get back on the offense in sport with consumers, led by an urgency to accelerate our pace of innovation and scale newness across our product line. Today, our playbook is in motion. Our teams are focused and hustling to deliver, and we're seeing positive signals from consumers and retail partners across the world. That said, this quarter we've been navigating several headwinds, which we now expect to have a more pronounced impact on fiscal 25.

Matt: Thanks, John and Hello to everyone on the call.

Matt: For Nike fiscal 'twenty four was a pivotal year to get back on the offense and sport with consumers led by an urgency to accelerate our pace of innovation and scale newness across our product line.

Matt: Today, our playbook is in motion our teams are focused and hustling to deliver and we are seeing positive signals from consumers and retail partners across the world.

Matt: That said this quarter, we have been navigating several headwinds.

Matt: We now expect to have a more pronounced impact on fiscal 'twenty five.

Matthew Friend: Although the next few quarters will be challenging, we are confident that we are repositioning Nike to be more competitive, with a more balanced portfolio, to drive sustainable, profitable, long-term growth. Let me provide some deeper insights into the fourth quarter and the implications we see as we look forward before reviewing our financial results and our outlook.

Matt: Although the next few quarters will be challenging, we're confident that we are repositioning Nike to be more competitive with a more balanced portfolio to drive sustainable, profitable long-term growth.

Matt: Although the next few quarters will be challenging.

Matt: We are confident that we are repositioning nike to be more competitive.

Matt: With a more balanced portfolio.

Matt: To drive sustainable profitable long term growth.

Matt: Let me provide some deeper insights into the fourth quarter and the implications we see as we look forward, before reviewing our financial results and our outlook.

Matt: Let me provide some deeper insights into the fourth quarter and the implications we see as we look forward before reviewing our financial results and our outlook.

Matthew Friend: First, after double-digit growth over the past several years... our lifestyle business declined in Q4, across men's, women's, and Jordan, more than offsetting strong growth in our sport performance business. Second, Nike Digital declined 10% in the quarter.

Matt: First, after double-digit growth over the past several years, our lifestyle business declined in Q4 across men's, women's, and Jordan. More than offsetting strong growth in our sport performance business. Second, Nike digital declined 10% in the quarter. Although our digital business has grown at an approximately 26% cagers in fiscal 19, we missed our Q4 plan on softer traffic, higher promotions, and lower sales of certain classics but where franchises. More specifically, these franchises underperformed our overall digital business results in the quarter. Especially in April and May, and continuing on into early June. This is even as these franchises continue to drive retail sales growth at high full price realization in multi-brand retail.

Matt: First after double digit growth over the past several years, our lifestyle business declined in Q4 across mens womens and Jordan.

Matt: More than offsetting strong growth in our sport performance business.

Second Nike digital declined 10% in the quarter.

Matthew Friend: Although our digital business has grown at an approximately 26% CAGR since fiscal 19, we missed our Q4 plan on softer traffic, higher promotion, and lower sales of certain classic footwear franchises. More specifically, these franchises underperformed our overall digital business results in the quarter, especially in April and May, and continuing on into early. This is even as these franchises continue to drive retail sales growth at high full price realization in multi-brand retail.

Matt: Although our digital business has grown at an approximately 26% CAGR since fiscal 19, we missed our Q4 plan.

Matt: On software traffic.

Matt: Promotions.

Matt: And lower sales of certain classics footwear franchises.

Matt: More specifically these franchises underperformed our overall digital business results in the quarter.

Matt: Especially in April and May and continuing on into early June.

Matt: This is even as these franchises continued to drive retail sales growth at high full price realization and multi brand retail.

Matthew Friend: Third, we experienced meaningful shifts in consumer traffic in key markets, particularly in Greater China, where brick and mortar traffic declined as much as double digits versus the prior year. We also continue to see uneven trends in EMEA and other markets around the world. And last, foreign exchange headwinds were, creating an additional one point headwind on revenue in the quarter.

Matt: Third, we experience meaningful shifts in consumer traffic in key markets, particularly in greater China, where brick-and-mortar traffic declined as much as double digits versus the prior year. We also continue to see uneven trends in America and other markets around the world. And last four-nix-chage headwinds worsened, creating an additional one-point headwind on revenue in the quarter.

Matt: Third we experienced meaningful shifts in consumer traffic in key markets, particularly in greater China.

Matt: Where brick and mortar traffic declined as much as double digits versus the prior year.

Matt: We also continue to see uneven trends in EMEA and other markets around the world.

And last foreign exchange headwinds worsened, creating an additional one point headwind on revenue in the quarter.

Matthew Friend: In the midst of these dynamics, our goals to return to strong growth remain the same: Read and React to the Consumer. Maximize full price sales across all channels, protect long-term franchise health, prioritize a healthy pull market, and create marketplace capacity for new products and new stories coming in Fiscal 25. Therefore, despite continued marketplace demand, we are accelerating our timelines to tighten the total supply of certain classic footwear franchises at different paces across different channels around the world.

Matt: In the midst of these dynamics, our goals to return to strong growth remain the same. Read and react to the consumer, maximize full-price sales across all channels, protect long-term franchise health, prioritize a healthy pull market, and create marketplace capacity for new products and new stories coming in fiscal 25. Therefore, despite continued marketplace demand, we are advancing our timelines to tighten total supply of certain classics, but where franchises. Davis, at different places across different channels around the world. In particular, we are aggressively adjusting our forward-looking plans for these franchises on Nike Digital, where they have their highest share of business.

Matt: In the midst of these dynamics our goal is to return to strong growth remain the same.

Matt: Read and react to the consumer.

Matt: <unk> full price sales across all channels.

Matt: Long term franchise health.

Matt: <unk> is a healthy pull market and create marketplace capacity for new products and new stories coming in fiscal 'twenty five.

Matt: Therefore, despite continued marketplace demand, we are advancing our timelines to tightened total supply of certain classics footwear franchises.

Matt: At different paces across different channels around the world.

Matthew Friend: In particular, we are aggressively adjusting our forward-looking plans for these franchises on Nike Digital, where they have their highest share of business. All told, we expect these actions to create several points of short-term headwinds on revenue in Fiscal 25. However, our past experience gives us confidence that proactively rebalancing our portfolio will strengthen our competitive position and Fuel Brand Momentum as we take the consumer somewhere new. Let me share a few recent examples.

Matt: In particular, we are aggressively adjusting our forward looking plans for these franchises on Nike digital.

Matt: They have their highest share of business.

Matt: All told, we expect these actions to create several points of short-term headwinds on revenue in fiscal 25.

Matt: All told we expect these actions to create several points of short term headwinds on revenue in fiscal 'twenty five.

Matt: However, our past experience gives us confidence that proactively rebalancing our portfolio will strengthen our competitive position and fuel grant momentum as we take the consumer somewhere new. Let me share a few recent examples. Back in fiscal 18, we recalibrated the supply of select Jordan Brand franchises, resetting our launch business and bringing more dimension to our portfolio. Over the subsequent quarters, we turned the page from double-digit declines in the brand to the start of multiple consecutive years of strong double-digit growth. And earlier this year, we moved quickly to reshape our lifestyle full-reportfolio in Japan and Korea, two of our most trend-forward markets, where our teams read and reacted to consumer signals.

Matt: However, our past experience gives us confidence that proactively rebalancing our portfolio will strengthen our competitive position and fuel brand momentum as we take the consumer somewhere Neal.

Matt: Let me share a few recent examples.

Matthew Friend: Back in fiscal 18, we recalibrated the supply of select Jordan brand franchises, resetting our launch business and bringing more dimension to our portfolio. Over the subsequent quarters, we turned the page from double-digit declines in the brand to the start of multiple consecutive years of strong double-digit growth. And earlier this year, we moved quickly to reshape our lifestyle footwear portfolio in Japan and Korea, two of our most trend-forward markets, where our teams read and reacted to consumers. We reduced supply of some classic franchises while scaling and creating new energy around other models in our vault.

Matt: Back in fiscal 2018, we recalibrated the supply of select Jordan brand franchises, resetting, our launch business and bringing more dimension to our portfolio.

Matt: Over the subsequent quarters, we turned the page from double digit declines in the brand to start with multiple consecutive years of strong double digit growth.

Matt: And earlier this year, we moved quickly to reshape our lifestyle footwear portfolio in Japan and Korea.

Two of our most trend forward markets.

Matt: We're our team's red and reacted to consumer signals.

Matt: We reduced supply of some classic franchises while scaling and creating new energy around other models in our vaults. In the fourth quarter, we regained our number one position in Korea in women's lifestyle footwear and extended our leading Japan with new momentum heading into fiscal 25. Now, as we accelerate our pace as newness and innovation, the early response from consumers and partners is reinforcing our optimism and Nike's path forward.

Matt: We've reduced supply of some classic franchises, while scaling and creating new energy around other models in our vault.

Matthew Friend: In the fourth quarter, we regained our number one position in Korea for women's lifestyle footwear and extended our lead in Japan with new momentum heading into Fiscal 25. Now, as we accelerate our pace of newness and innovation. The early response from consumers and partners is reinforcing our optimism in Nike's path forward. First, a sharper focus on sport is creating impact. This quarter, performance grew across men's, women's, kids, and Jordan, across all channels and geographies.

Matt: In the fourth quarter, we regained our number one position in Korea, and women's lifestyle footwear and extended our lead in Japan with new momentum heading into fiscal 'twenty five.

Matt: Now as we accelerate our pace of newness and innovation. The early response from consumers and partners are reinforcing our optimism in nike's path forward.

Matt: First, the sharper focus on sport is creating impact. This quarter, performance grew across men's, women's, kids', and Jordan, across all channels and geographies, and we expect to build on that momentum, leading with performance into fiscal 25. We are seeing favorable indicators in key focus areas, including strong double-digit growth in order books with North American running specialty partners in both Holiday 24 and Spring 25. In lifestyle, fresh releases are resonating positively with consumers. For instance, new executions around retro running and field franchises such as quartets, kill shot, and the field general are driving strong retail sales growth as we prepare to scale these franchises in fiscal 25.

Matt: First the sharper focus on sport is creating impact.

This quarter performance grew across men's women's kid's and Jordan across all channels and geographies and we expect to build on that momentum leading with performance in fiscal 'twenty five.

Matthew Friend: And we expect to build on that momentum, leading with performance in fiscal 25. We are seeing favorable indicators in key focus areas, including strong double-digit growth in order books with North American running specialty partners in both holiday 24 and spring 25. In lifestyle, fresh releases are responding positively with consumers.

Matt: We are seeing favorable indicators in key focus areas, including strong double digit growth in order books with North American running specialty partners and both holiday 'twenty four and spring 'twenty five.

Matt: And lifestyle fresh releases are resonating positively with consumers.

Matthew Friend: For instance, new executions around retro-running and field franchises such as Cortez, Killshot, and the Field General are driving strong retail sales growth as we prepare to scale these franchises in Fiscal 25. Our teams are also attacking opportunities across price, including a refreshed lineup of new footwear products below $100. Building on this quarter's double-digit growth, we plan to scale new performance and lifestyle models in Spring 2025. All together, we expect the business contribution from new products to more than double from the start of Fiscal 24 to where we end the year in Fiscal 25.

Matt: Instance, new executions around retro running and field franchises, such as Cortez kill shot in the field general are driving strong retail sales growth as we prepare to scale. These franchises in fiscal 'twenty five.

Matt: Our teams are also attacking opportunities across price points, including a refreshed lineup of new footwear products below $100. Building on this quarter's double-digit growth, we plan to scale new performance in lifestyle models in Spring 25. Added up, we expect the business contribution from new products to more than double from the start of fiscal 24 to where we end a year in fiscal 25. Last, we are managing expenses tightly through this product cycle transition, while reallocating resources to maximize consumer impact. This is enabled by our safe to invest initiatives, which is creating investment capacity to fuel our next phase of growth.

Matt: Our teams are also attacking opportunities across price points.

Matt: Including a refresh lineup of new footwear products below $100 bills.

Matt: Building on this quarters double digit growth, we plan to scale, new performance and lifestyle models in spring 'twenty five.

Matt: Added up we expect the business contribution from new products to more than double from the start of fiscal 'twenty four to where we end the year in fiscal 'twenty five.

Matthew Friend: Last, we are managing expenses tightly through this product cycle transition while reallocating resources to maximize consumer impact. This is enabled by our Save to Invest initiative, which is creating investment capacity to fuel our next phase of growth. At the end of fiscal 24, we have unlocked savings from initiatives up and down our P&L and across our value chain, from reducing small parcel fulfillment costs to consolidating suppliers, optimizing technology spend, and restructuring our organization to streamline layers and support functions. In turn, we are reinvesting nearly $1 billion in consumer-facing activities in Fiscal 25, which we expect to accelerate our return to strong growth. This includes ramping up our ground game offense and running in key cities.

Last we are managing expenses tightly through this product cycle transition, while reallocating resources to maximize consumer impact.

Matt: This is enabled by our safe to invest initiative, which is creating investment capacity to fuel our next phase of growth.

Matt: At the end of fiscal 24, we have unlocked savings from initiatives, up and down our P&L, and across our values. James, from reducing small parcels to settlement costs, to consolidating suppliers, optimizing technology spend, and restructuring our organization to streamline layers and support functions. In turn, we are reinvesting nearly $1 billion in consumer-facing activities in Sissel 25, which we expect to accelerate our return to strong growth. This includes ramping up our ground in running in key cities, increasing resources in design, product creation, and merchandising for our key sport dimensions, deepening our sports marketing portfolio, elevating the distinction of our brand and physical retail, and driving bigger, bolder brand campaigns, starting with EC24 and the Parasolimpics.

Matt: At the end of fiscal 'twenty, four we have unlocked savings from initiatives up and down our P&L and across our value chain.

Matt: From reducing small parcel fulfillment costs to.

Matt: To consolidating suppliers optimizing technology spend and restructuring our organization to streamline layers and support functions.

Matt: In turn we are reinvesting nearly $1 billion in consumer facing activities in fiscal 'twenty five.

Matt: Which we expect to accelerate our return to strong growth.

Matt: This includes ramping up our ground game offense and running in key cities.

Matthew Friend: Increasing resources in design, product creation, and merchandising for our key sport dimension. Deepening our Sports Marketing Portfolio. Elevating the distinction of our brand in physical retail, and driving bigger, bolder brand campaigns, starting with EC24 and the Paracelint.

Matt: Increasing resources and design and product creation and merchandising for our key sport dimensions.

Matt: Deepening our sports marketing portfolio elevating the distinction of our brand and physical retail.

Matt: And driving bigger bolder brand campaigns, starting with <unk> 24, and the Paris Olympics.

Matthew Friend: Now let me turn to our Nike fourth quarter results. In Q4, Nike Inc. revenue was down 2% on a reported basis and flat on a currency-neutral basis. Nike Direct was down 7%, Nike stores were down 2%, and Nike Digital was down 10%. Wholesale Group 8%. Gross margins expanded 110 basis points to 44.7% on a reported basis, primarily due to strategic pricing action. Lower Ocean Freight Rates and Improved Supply Chain Efficiency are partially offset by lower margins in Nike Direct.

Matt: Now let me turn to our Nike fourth quarter results. In Q4, Nike Inc. Revenue was down 2% on a reported basis and flat on a currency useful basis. Nike Directs was down 7%. Nike stores were down 2%, and Nike digital was down 10%; wholesale group 8%. Gross margins expanded 110 basis points to 44.7% on a reported basis. Primarily due to strategic pricing actions, lower ocean freight rates, and improved supply chain efficiency, partially offset by lower margins in Nike Directs, unfavorable channel mix, and net foreign exchange impact. SGA was down 7% on a reported basis, as increased investment in demand creation was more than offset by reductions in operational overhead.

Speaker Change: Now, let me turn to our Nike, Inc. Fourth quarter results.

Speaker Change: In Q4, Nike, Inc. Revenue was down 2% on a reported basis and flat on a currency neutral basis.

Speaker Change: Nike direct was down 7%.

Speaker Change: Nike stores were down, 2% and Nike digital was down 10% wholesale.

Speaker Change: Wholesale grew 8%.

Speaker Change: Gross margins expanded 110 basis points to 44, 7% on a reported basis, primarily due to strategic pricing actions lower ocean freight rates and improved supply chain efficiency.

Speaker Change: Partially offset by lower margins in Nike direct.

Matthew Friend: Unfavorable Channel Mix and Net Foreign Exchange Impact. SG&A was down 7% on a reported basis, as increased investment and demand creation was more than offset by reductions in operational overhead. This includes the impact from approximately $40 million in restructuring charges. Our effective tax rate was 13.1%, compared to 17.3% for the same period last year.

Unfavorable channel mix and net foreign exchange impact.

Speaker Change: SG&A was down 7% on a reported basis as increased investment in demand creation was more than offset by reductions in operational overhead.

Matt: This includes impact from approximately 40 million in restructuring charges. Our effective tax rate was 13.1%. Compared to 17.3% for the same period last year, due to changes in earnings mix, partially offset by decreased benefits from one-time items, such as stock-based compensation. Diluted earnings per share was 99 cents, up 50% versus the prior year. This includes non-material impact from restructuring charges. For the full year, revenue was flat on a reported basis and up 1% on a currency mutual basis. Diluted earnings per share was 15%. Cash flow from operations was 7.4 billion, up 27% versus the prior year, on significant improvements in working capital.

Speaker Change: This includes the impact from approximately $40 million in restructuring charges.

Speaker Change: Our effective tax rate was 13, 1% compared to 17, 3% for the same period last year due to changes in earnings mix, partially offset by decreased benefits from onetime items, such as stock based compensation.

Matthew Friend: Due to changes in earnings mix, partially offset by decreased benefits from one-time items, such as stock-based competition, diluted earnings per share was 99 cents, up 50% versus the prior year. This includes a non-material impact from restructuring. For the full year, revenue was flat on a reported basis and up 1% on a currency-neutral basis.

Speaker Change: Diluted earnings per share was <unk> 99.

Speaker Change: Up 50% versus the prior year. This includes non material impact from restructuring charges.

For the full year revenue was flat on a reported basis and up 1% on a currency neutral basis.

Matthew Friend: Diluted earnings per share grew 15%. Cash flow from operations was $7.4 billion, up 27% versus the prior year, on significant improvements in working capital. Inventory declined 11% versus the prior year, with continued improvement in days in inventory. Now, let me turn to the operating side. In North America, Q4 revenue declined 1%.

Speaker Change: Diluted earnings per share grew 15%.

Speaker Change: Cash flow from operations was $7 4 billion up 27% versus the prior year on significant improvements in working capital inventory.

Matt: Inventory declined 11% versus the prior year, with continued improvement in days in inventory.

Speaker Change: Inventory declined 11% versus the prior year with continued improvement in days in inventory.

Matt: Now let me turn to the operating segment.

Speaker Change: Now, let me turn to the operating segments.

Matt: In North America, Q4 revenue declined 1%. Nike Directs was down 9%. With Nike digital down 11%, and Nike stores down 5%.

Speaker Change: In North America, Q4 revenue declined 1%.

Matthew Friend: Nike Direct was down 90, with Nike Digital down 11%, and Nike stores down five. However, wholesale grew 6% due to accelerated shipping timing from Q1 of fiscal 25, and even grew 5% on a reported basis. This quarter, we saw softer traffic in our factories, highlighting increasing pressure being felt by the value. That said, we saw a number of bright spots as well, including strong growth in basketball, fitness, and kids, offset by declines in lifestyle and joy. Kidsletter results in the geography, with performance dimensions of strong double digits.

Nike direct was down 9%.

Speaker Change: With Nike digital down, 11% and Nike stores down 5%.

Matt: Also, grew 6%. Due to accelerated shipping timing from Q1 of fiscal 25%. And even if it grew 5% on a reported basis.

Speaker Change: Wholesale grew 6% due to accelerated shipping timing from Q1 of fiscal 'twenty five.

Speaker Change: And EBIT grew 5% on a reported basis.

Matt: This quarter we saw softer traffic in our factory stores, highlighting increasing pressure being felt by the value consumer. That said, we saw a number of bright spots as well, including strong growth in basketball fitness and kids, offset by declined in life's challenge. Digital, and that has a pronounced impact on revenue, which is creating a more meaningful first half impact.

Speaker Change: This quarter, we saw softer traffic in our factory stores, highlighting increasing pressure being felt by the value consumer.

Speaker Change: That said, we saw a number of bright spots as well, including strong growth in basketball fitness and kids' offset by declines in lifestyle and Jordan.

Speaker Change: Kids led our results in the geography with performance dimensions up strong double digits.

Matthew Friend: In women's fitness, we gained market share in footwear. In men's and women's running, fall footwear bookings are up double digits, led by the Pegasus 41. In EMEA, Q4 revenue grew 1%. Nike Direct was down 8% as Nike stores grew 1%, and Nike Digital declined 14%.

Speaker Change: In women's fitness, we gained market share in footwear and men's and women's running fall footwear bookings are up double digits led by the <unk> 41.

Speaker Change: In EMEA Q4 revenue grew 1% Nike direct was down 8% as Nike stores grew 1% and Nike digital declined 14%.

Matthew Friend: Wholesale grew seven percent, and EBIT grew 2% on a reported basis. In a cautious macro environment, we are seeing performance innovation drive strong self- This is partially offset by overall declines in lifestyle, with new product releases working well. Global football grew double digits across men and kids.

Speaker Change: Wholesale grew 7%.

Speaker Change: EBIT grew 2% on a reported basis.

Speaker Change: And a cautious macro environment, we are seeing performance innovation drive strong sell through.

Speaker Change: This is partially offset by overall declines in lifestyle with new product releases working well.

Speaker Change: Global football grew double digits across men's and kids and women's fitness, we drove strong momentum in footwear and new apparel releases, such as our refresh Nike Pro line.

Matthew Friend: In women's fitness, we drove strong momentum in footwear and new apparel releases, such as our refreshed Nike Pro line. In lifestyle, our retro running franchises continue to scale, and our Air Max DM launch drove energy with a full marketplace. In Greater China, Q4 revenue grew 7%, including several points of contribution from Tmall's earlier start to the 6-18 shopping holiday.

Speaker Change: And lifestyle or retro running franchises continue to scale and our air Max DM launch drove energy with a full marketplace takeover.

Speaker Change: In greater China, Q4 revenue grew 7%, including several points of contribution from Tmall earlier start to the 618 shopping holiday <unk>.

Matthew Friend: Excluding this timing benefit, we fell short of our plan, with traffic softness persisting across all marketplaces, Nike Direct declined 2%, with Nike Stores down 6% and Nike Digital up 8%. Wholesale Group 15. EBIT grew 4% on a reported basis with continued impacts from foreign exchange.

Speaker Change: Excluding this timing benefit we fell short of our plan with traffic softness persisting across all marketplace channels.

Speaker Change: Nike direct declined 2% with.

Speaker Change: With Nike stores down, 6% in Nike digital up 8%.

Speaker Change: Wholesale grew 15%.

Speaker Change: EBIT grew 4% on a reported basis with continued impacts from foreign exchange.

Matthew Friend: Our kids' business set the pace in the geography this quarter, led by running and basketball. Within Men's and Women's Lifestyle, Retro Running Styles and our latest Express Lane releases drove positive consumer response. And in men's and women's running, retail sales for our new releases, Structure, Vimero, and Invincible grew double digits. The China marketplace remains highly promoted.

Speaker Change: Our kids business set the pace in the geographies this quarter led by running and basketball within men's and women's lifestyle retro running styles in our latest express lane releases drove positive consumer response.

And in men's and women's running retail sales for our new releases structure of MRO and Invincible grew double digits.

Speaker Change: The China marketplace remains highly promotional and we continue to manage both Nike and partner inventory carefully.

Matthew Friend: And we continue to manage both Nike and partner inventory care. While our outlook for the near term has softened, we remain confident in Nike's competitive position in China and APLA Q4 revenue grew 4%. Nike Direct declined 3%, with Nike Stores up 11% and Nike Digital down 12%.

Speaker Change: While our outlook for the near term has softened.

Speaker Change: We remain confident in nike's competitive position in China in the long term.

Speaker Change: In <unk> Q4 revenue grew 4%.

Speaker Change: Nike direct declined 3% with Nike stores up, 11% and Nike digital down 12%.

Matthew Friend: Wholesale grew 9%, and EBIT grew 4% on a reported basis. Mexico and Southeast Asia and India led our growth in this geography. And across APLA, we drove strong momentum and performance with men's basketball, men's global football, and women's fitness doubled. Jordan Brand drove energy with streetball activations in Tokyo and Manila and market share gains in basketball footwear. Now, let me turn to our Fiscal 25 Financial Outlook. We're managing a product cycle transition. With complexity amplified by the shifting channel mix dynamics, a comeback at this scale takes time.

Speaker Change: Wholesale grew 9% and EBIT grew 4% on a reported basis.

Speaker Change: Mexico, and Southeast Asia, and India led our growth in the geography.

Speaker Change: And across <unk>, we drove strong momentum in performance with men's basketball men's global football and women's fitness up double digits.

Speaker Change: Jordan brand drove energy was street ball Activations in Tokyo in Manila and market share gains in basketball footwear.

Speaker Change: Now, let me turn to our fiscal 'twenty five financial outlook.

Speaker Change: We are managing our product cycle transition with complexity amplified by shifting channel mix dynamics.

Speaker Change: I'll come back at this scale takes time.

Matthew Friend: With this in mind, we've considered a number of factors and scenarios in revising our outlook for Fiscal 25. Most importantly, this includes timelines and pacing to manage marketplace supply of our classic footwear franchise. Lower Nike digital growth, especially in the first half of the year, due to lower traffic on fewer launches.

Speaker Change: With this in mind, we've considered a number of factors and scenarios and revising our outlook for fiscal 'twenty five.

Speaker Change: Most importantly, this includes timelines and pacing to manage marketplace supply of our classics footwear franchises.

Lower Nike digital growth, especially in the first half of the year due to lower traffic on fewer launches planned declines of classics footwear franchises, given Q4 trends as well as reduced promotional activity.

Matthew Friend: Planned declines of classic footwear franchises given Q4 trends, as well as reduced promotional activity. Increased macro uncertainty, particularly in Greater China. With uneven consumer trends continuing in EMEA and other markets around the world, and sell to wholesale partners as we scale product innovation and newness across the market and finalized the second half order. Taking all of this into consideration. We now expect fiscal 25 reported revenue to be down mid-single digit, with the first half down high. Foreign exchange headwinds have also worsened, and we'll now have a one-point translational impact on revenue in fiscal 25.

Speaker Change: Increased macro uncertainty, particularly in greater China with uneven consumer trends continuing in EMEA and other markets around the world.

Speaker Change: And sell into wholesale partners as we scale product innovation and newness across the marketplace and finalized second half order books.

Speaker Change: Taking all of this into consideration, we now expect fiscal 'twenty five reported revenue to be down mid single digits with.

Speaker Change: With the first half down high single digits.

Speaker Change: Foreign exchange headwinds have also worsened and we will now have a one point translational impact on revenue in fiscal 'twenty five.

Matthew Friend: Turning to gross margin, we expect full-year expansion of approximately 10 to 30 basis points on a reported basis. This reflects benefits from strategic pricing actions and lower product input costs, partially offset by supply chain de-leverage, ChannelMix Shifts, and NetForeignExchange Impact.

Speaker Change: Turning to gross margin, we expect full year expansion of approximately 10% to 30 basis points on a reported basis.

Speaker Change: This reflects benefits from strategic pricing actions and lower product input costs, partially offset by supply chain deleverage channel mix shifts and net foreign exchange impact.

Matthew Friend: We expect full-year SG&A growth to be up slightly versus the prior year as we increase investments in demand creation to ignite brand momentum and maximize reach and impact, while holding operating overhead largely flat. Other income and expense, including interest income, is expected to be approximately $250 million to $300 million for the year.

Speaker Change: We expect full year SG&A growth to be up slightly versus the prior year.

Speaker Change: As we increase investments in demand creation to ignite brand momentum and maximize reach and impact while holding operating overhead largely flat.

Speaker Change: Other income and expense, including net interest income is expected to be approximately 250 million to $300 million for the year.

Matthew Friend: We expect our full year effective tax rate to be in the high teens range. Now turning to our first quarter, we expect first quarter revenue to be down approximately 10%.

Speaker Change: We expect our full year effective tax rate to be in the high teens range.

Speaker Change: Now turning to our first quarter, we expect first quarter revenue to be down approximately 10%.

Matthew Friend: This reflects more aggressive actions in managing our classic footwear franchise, continuing challenges on Nike Digital, muted wholesale order books with newness not yet at scale, a softer outlook in Greater China, and a number of quarter-specific timing factors.

Speaker Change: This reflects more aggressive actions and managing our classics footwear franchises.

Speaker Change: Continuing challenges on Nike digital.

Speaker Change: Muted wholesale order books with newness not yet at scale.

Speaker Change: A softer outlook in greater China and.

Speaker Change: And a number of quarter specific timing factors.

Matthew Friend: We expect first quarter gross margins to be in line with the full year guidance, and we expect first quarter SG&A to be in the mid-single digits. As we hold operating overhead flat while investing in key brand moments, including EC24 and the Paris Olympics, inspiration starts with the athletes we serve. Their dreams motivate us to create the most innovative products and tell stories that reach millions of people around the world. Above all, they remind us of the hard work and the hustle that is required to win.

Speaker Change: We expect first quarter gross margins to be in line with our full year guidance.

Speaker Change: And we expect first quarter SG&A to be up mid single digits.

As we hold operating overhead flat, while investing in key brand moments, including EC 24, and the Paris Olympics games.

Speaker Change: For Nike inspiration starts with the athletes we serve.

Speaker Change: Their dreams motivate us to create the most innovative product in sport and tell stories that reach millions of people around the world.

Speaker Change: Above all they remind us of the hard work and the hustle that is required to win.

Matthew Friend: Before I close, I'd like to thank our Nike teammates, whose passion and drive are the fuel for our comeback. The heart, the focus, and the collaboration that I'm seeing from our teams today are my greatest reasons for confidence as we move forward. With that, let's open up the call for questions. At this time, if you'd like to ask a question, press star 1 on your telephone keypad. Our first question will come from the line of Matthew Boss with J.P. Morgan. Please go ahead.

Speaker Change: Before I close I'd like to thank our Nike teammates, whose passion and drive of the fuel for our comeback.

Speaker Change: Heart, the focus and the collaboration that I've seen from our teams today are my greatest reasons for confidence as we move forward.

Speaker Change: With that let's open up the call for questions.

Speaker Change: At this time, if you'd like to ask a question press star one on your telephone keypad. Our first question will come from the line of Matthew Boss with Jpmorgan. Please go ahead.

Matthew Robert Boss: Great, thanks. Maybe, John, just to summarize and think about it relative to three months ago. I guess how would you rank changes on the macro front and similarly on Nike execution that impacted the change in your 2025 outlook today relative to three months ago? And then Matt, just on the gross margin, could you just help break apart maybe the puts and takes to consider over the course of 25 and how best to model them? from a gross margin. Well, thanks, Matthew.

Matthew Robert Boss: Great. Thanks.

Speaker Change: Maybe John just to summarize and think about relative to three months back.

Matthew Robert Boss: I guess, how would you rank changes on the macro front and similarly on Nike execution that impacted the change in your 2025 outlook today relative to three months ago, and then Matt just on the gross margin could you just help break apart maybe the puts and takes to consider over the course of 'twenty five and how best to model.

Speaker Change: The cadence from a gross margin perspective.

Speaker Change: Thanks Matthew.

John J. Donahoe: You know, we set out what we're calling our comeback plan a year ago, and in the last 90 days, I would say our execution continues to stay on pace. Matt, you can talk about macro and how franchise management is impacting the numbers. But on the fundamental things we set out to do, four things that we are moving aggressively on. One, put sport back at the center of everything we do, serving the athletes.

Speaker Change: We set out our what we're calling our comeback plan a year ago.

Speaker Change: And in the last 90 days I would say our execution continues to stay on pace, Matt you can talk about the macro and the franchise management impacting the numbers, but on the fundamental things we set out to do four things that we are moving aggressively on one.

Speaker Change: But sport back at the center of everything we do.

Speaker Change: Serving the athlete.

John J. Donahoe: And over the last 90 days, we completed completely aligning our organization along the lines of sport, our co-locating those teams, and now, end to end, we have clear, what we call field-of-play, sport-based field-of-play teams, end-to-end, which is accelerating our pace and also improving our execution. As we've talked about in the last couple quarters, we've reinvigorated our innovation pipeline, including So, in addition to launching DN and PEG-41 during the quarter or early this quarter, we'll also pull forward key innovations like the PEG Premium and Glomero 18, which are just two examples of what's coming in spring 25.

Speaker Change: And over the last 90 days, we completed completely aligning our organization along the lines of sport are co locating those teams and now end to end have clear what we call field to play sport based field to play teams end to end, which is accelerating our pace and also improving our execution as.

Speaker Change: We've talked about the last couple of quarters, we've reignited, our innovation pipeline, including pulling several innovations forward.

Speaker Change: In addition to launching Deanne and pegged 41 during the quarter early this quarter. We're also pull forward key key.

Speaker Change: Innovations like the peg premium in <unk>, <unk>, which are just two examples of what's coming in spring 'twenty five.

John J. Donahoe: And as I mentioned earlier, speed is a capability we're building, which we feel increasingly strong about. And our brand is getting strong. With Euro Champs, you see our Awaken Your Madness campaign, which is really the first of the bigger, bolder brand voice you're going to hear and then, We're very excited about the Olympics coming. A lot of the work that went into the Olympics happened in Q4, but you're gonna get to see it in a few weeks.

Speaker Change: And as I mentioned earlier speed is a capability, we're building, which repeal increasingly strong about.

And brand is getting stronger.

Euro Champs.

Speaker Change: See our awaken Youre Madness campaign, which is really the first of the bigger bolder brand voice youre going to hear and then.

Speaker Change: We're very excited about the Olympics coming.

Speaker Change: Lot of the work that went into Olympics happened in Q4, but youre going to get to see it in a few weeks and then a marketplace. We've spent a lot of time leaning in with our wholesale partners. We've had several wholesale partner summits. We've had our ESG groups neighborhood partners in Authenticators to campus, we're exposing our three year product innovation pipeline to them.

John J. Donahoe: And then on Marketplace, we've spent a lot of time leaning in with our wholesale partners. We've had several wholesale partner summits. We've had RSG groups, neighborhood partners, and authenticators come to campus.

John J. Donahoe: We're exposing our three-year product innovation pipeline to them, and feedback's been very strong. Our order book for holiday, spring 25, holiday 24, and spring 25 is strong. And so our confidence is building. So on the fundamentals that we are, we're executing against this proven playbook on a comeback that will take time. We feel like we've made strong progress, and just hitting the financial implications relative to 90 days. Last quarter, we said that we thought revenue was going to be down low single digits in the first half, and that included a more pronounced impact in the first quarter. We also said that we expected revenue to grow, and what we saw in the fourth quarter were really two things.

Speaker Change: And feedback has been very strong our order book for holiday Spring 'twenty.

Speaker Change: <unk> 25 holiday 'twenty for spring 'twenty five is strong and so our confidence is building. So on the fundamentals that we are we are executing against his proven playbook on a come back that will take time, we feel like we've made strong progress.

Speaker Change: And just hitting the financial implications relative to 90 days ago.

Speaker Change: Last quarter, we said that we thought revenue was going to be down low single digits in the first half and that included a more pronounced impact in the first quarter. We also said that we expected revenue to grow.

Matthew Friend: One lifestyle, our lifestyle business declined more pronouncedly on Nike, specifically in April and in May, and those trends continuing into June. And what I highlighted in my prepared remarks is that those specific classic franchises that we were talking about underperformed our overall digital business results in the fourth quarter. And so when we look at our updated guidance of down mid-single digits for the full year, there are really three things that are driving the change.

Speaker Change: And what we saw in the fourth quarter were really two things one lifestyle, our lifestyle business declining.

Speaker Change: More pronounced on Nike digital specifically in April and in May and those trends continuing into June and what I highlighted in my prepared remarks is that those specific.

Speaker Change: Classic franchises that we were talking about underperformed our overall digital business results in the fourth quarter.

Speaker Change: So when we look at our updated guidance of down mid single digits for the full year.

Matthew Friend: One, I'll start with FX; our outlook on foreign exchange and the strength of the U.S. dollar had a one-point impact relative to 90 days ago. We've softened our outlook for greater China, and that also similarly had a level of impact on full-year guidance.

Speaker Change: There's really three things that are driving the change one.

Speaker Change: I'll start with FX, our outlook on foreign exchange and the strength of the U S. Dollar had a one point impact relative to 90 days ago.

Speaker Change: Softened our outlook for greater China and that also similarly had a level of impact for the full year guidance and then the majority of the remainder of the change is related to the more aggressive actions that we're taking on our key franchises across the total marketplace, but really with the compounded impact on total digital.

Matthew Friend: And then the majority of the change is related to the more aggressive actions that we're taking on our key franchises across the total marketplace, but really with a compounded impact on total. And the bigger impact of this will be in the first half of this year, but we are planning for meaningful sequential improvement in the second half of this year. And that's how I think about the revenue differences relative to the revenue differences relative to what we said 90 days ago. In the first quarter, the other impact was timing.

Speaker Change: And the bigger impact of this will be in the first half of this year, but we're planning for meaningful sequential improvement in the second half of the year.

Speaker Change: And and that's how I think about the revenue differences relative to.

Speaker Change: The revenue differences relative to.

Matthew Friend: And we saw the 6-18 period come earlier into May than we had in the prior year, and that had an impact on Q4's results but also an impact on Q1. And we saw some favorable shipment timing in North America as we prepare to go live with our ERP and also just better general product availability. So that also had an impact on the first. And I just want to add one more thing that Matthew, you've heard Matt and I both talk about. It's an intangible thing, but I think it's just so important, which is...

What we said 90 days ago on the first quarter the.

Speaker Change: The other impact was timing and we saw at the six to 18 period come earlier into May than we had in the prior year and that had an impact on Q4's results, but also an impact on Q1's results and we saw some favorable shipment timing.

Speaker Change: In North America, as we prepare to go live with our ERP and also just better general product availability. So.

Speaker Change: That also had an impact on the first quarter numbers.

Speaker Change: I just wanted to add one more thing that Matthew you heard Matt and I, both talk about it it's an intangible thing, but I think it's just so important which is the.

John J. Donahoe: The Heart and Hustle of our Team, which has just been extraordinary over the last year, but also in the last 90 days, just accelerating both. Heidi's and Craig's teams, the teamwork of how they're working together end to end, the focus and focus on the consumer, the increasing speed, pulling things forward. It's, there's a palpable shift in the confidence and forward-looking nature of our team. So I want to give huge credit to them, but also just recognize that this is so important in Nike and our teams are, I think, feeling more confident as each day comes along. Our next question will come from the line of Lorraine Hutchinson with Bank of America. Please go ahead. Thank you. Good afternoon.

Speaker Change: The heart and Hustle a R T.

Speaker Change: Which is just been extraordinary over the last year, but also in the last 90 days just accelerating both hydrogen and Craig's teams the teamwork of how they're working together and to end the.

<unk> focus and focus on the consumer the increasing speed pulling things forward is.

Speaker Change: There is a palpable shift in the confidence and forward looking nature of our teams. So I wanted to give huge credit to them. But also just recognize that is so important to Nike and our teams are I think feeling more confident each day comes along.

Speaker Change: Okay.

Speaker Change: Our next question will come from the line of Lorraine Hutchinson with Bank of America. Please go ahead.

Lorraine Corrine Maikis Hutchinson: Can you provide some numbers that might help us build confidence in the meaningful second half improvements? How much less of a headwind is there from sunsetting some of these franchises? How do total order books look?

Lorraine Corrine Maikis Hutchinson: Thank you good afternoon.

Lorraine Corrine Maikis Hutchinson: Provide some numbers that might help us confident for the meaningful second half improvement.

Lorraine Corrine Maikis Hutchinson: How much less of a headwind as they are coming from selling some of these franchises had a total order books look and anything you can provide numerically that helps you to get to that back half improvement.

Matthew Friend: And anything you can provide numerically that helps you to get to that back half improvement? Well, Lorraine, as I mentioned, we've looked at a number of different factors and scenarios as we updated our guidance for the year and that range, looking at different slopes of different curves of different products over time and developing a perspective on how we think the trends are gonna play out as it relates to some of our largest franchises.

Speaker Change: Although as I mentioned, we've looked at a number of different factors and scenarios as we've.

Speaker Change: <unk> updated our guidance for the year and that ranges from looking at different slopes of different curves are different products over time in developing our perspective on how we think the trends are going to play out as it relates to <unk>.

Some of our largest our largest franchises.

Matthew Friend: But you know, those franchises continue to drive retail sales growth and high levels of full price realization in the marketplace. And so the bigger impact on the first half are the adjustments that we're taking to manage the health of those franchises, starting first with Nike. And that has a pronounced impact on revenue, which is creating a more meaningful first half impact. We want to continue to let those franchises in the multi-brand environment continue to have the impact that they're having on our partners. And one of the ways that we maintain the health of those is by reducing what we're offering to consumers through our digital.

Speaker Change: But those franchises continued to drive retail sales growth and high levels of full price realization in the marketplace and so the bigger impact on the first half are the adjustments that were taking to manage the health of those franchises, starting first with Nike digital and that has a pronounced impact on revenue, which is creating a more meaningful.

Speaker Change: Paul.

Speaker Change: First half impact.

Matt: We want to continue to let those franchises in the multi-brand environment continue to have the impact that they're having for our partners, and one of the ways that we mean that we maintain the health of those is by reducing what we're offering to consumers through our digital channel. As it relates to the second half, you know, we highlighted a couple of things, but we are planning for meaningful sequential improvement in the second half versus the first half, and it starts with the confidence that we have around the new products that we're bringing to market. The PEG 41, the PEG premium, the numerally teen, the order book for Air Max, the yen plus the next Air Max iteration, that's going to be coming to market, plus our plans to scale, to scale the innovation and the newness that we've been discussing.

We want to continue to let those franchises in the multi brand environment continue to have the impact that theyre, having for our partners and one of the ways that we made that we maintain the health of those is by reducing what we're offering to consumers through our digital channel as it relates to the second half we highlighted a couple of things.

Matthew Friend: As it relates to the second half, you know, we highlighted a couple of things, but we are planning for meaningful sequential improvement in the second half versus the first half. And it starts with the confidence that we have around the new products that we're bringing to market. The PEG-41, the PEG Premium, the Vimero 18, the order book for Air Max DN, plus the next Air Max iteration that's going to be coming to market, plus our plans to scale the innovation and the newness that we've been discussing.

Speaker Change: But.

Speaker Change: We are planning for a meaningful sequential improvement in the second half versus the first half and it starts with the confidence that we have around the new products that we're bringing to market. The <unk> 41 per premium <unk>.

Speaker Change: The order book for Air Max Yen, plus the next air Max iteration.

Speaker Change: It's going to be coming to market plus our plans to scale to.

Speaker Change: The scale of the innovation and the newness that we've been discussing and so.

Matthew Friend: And so when we look at where we are today and the ways in which we're working to drive this plan through the balance of the fiscal year, our scaling of newness is on track, and our teams are hustling to see whether there are even opportunities to accelerate the scaling of that newness in the second half. We are confident in the indicators that we're seeing in the marketplace right now. We gave you a couple of specific numbers as it relates to running and running specialty.

Matt: And so when we look at where we are today, and the ways in which we're working to drive this plan through the balance of the fiscal year, our scaling of newness is on track, and our teams are hustling to see whether there's even opportunities to accelerate the scaling of that newness in the second half. We are competent in the indicators that we're seeing in the marketplace right now. We gave you a couple of specific numbers as it relates to running and running specialty, but what I will tell you is that our initial read of our spring order book is in line with the guidance that we're providing.

Speaker Change: When we look at at where we are today and the ways in which we're working to drive this plan through the balance of the fiscal year are scaling of newness.

Speaker Change: Is on track and our teams are hustling to see whether there's even opportunities to <unk>.

Speaker Change: To accelerate the scaling of that newness in the second half.

Speaker Change: <unk>.

Speaker Change: We are we are confident in the indicators that we're seeing in the marketplace right. Now we gave you a couple of specific numbers as it relates to running and running specialty but what I will tell you is that our initial read of our spring order book is in line with the guidance that we're providing it. So we feel confident that we are key.

Robert Scott Drbul: But what I will tell you is that our initial read of our spring order book is in line with the guidance that we're providing. And so we feel confident that we're creating a better balance across our portfolio and also building momentum with our wholesale. Our next question will come from Bob Drbul with Guggenheim Securities. Please go ahead.

Matt: And so we feel confident that we're creating better balance across our portfolio and also building momentum with our wholesale partners.

Speaker Change: Creating better balanced across our portfolio and also building momentum with our wholesale partners.

Bob Durbow: Our next question will come from the line of Bob Durbow with Doug and I'm Security. Please go ahead. Hi, just two questions for me.

Speaker Change: Our next question will come from the line of Bob <unk> with Guggenheim Securities. Please go ahead.

Matthew Friend: Hi, um, I have just two questions for you. I guess the first one is, you know, when you look at the visibility of the business, I think in some of your answers to Lorraine's questions, um, when you look at the visibility of the business today, you know, with the shifts that are occurring, can you just talk about how you feel looking at that versus what you saw over the last 12 and 24 months, just in terms of your ability to predict?

Speaker Change: Hi.

Speaker Change: Two questions from me I guess the first one is when you look at the the visibility of the business I think in some of your answers to <unk> questions.

Bob Durbow: I guess the first one is, when you look at the visibility of the business, I think in some of your answers to Lorraine's questions, when you look at the visibility of the business today, with the shifts that are occurring, you can just talk about how you feel looking at that versus what you saw over the last 12 and 24 months, just in terms of your ability to predict.

Speaker Change: And when you look at the visibility of the business today with the shifts that are occurring can you just talk about how you feel looking at that versus what you saw over the last 12 months to 24 months just in terms of your ability to predict and then just a second piece of this is when you look at the channel shift.

Matt: And then, just the second piece of this is, when you look at the channel shift, that is going on wholesale to direct or brick and mortar and the digital pieces of the business, you need to give us any more framework around how to think about the penal impacts at a higher level. Sure, sure. Well, as it relates to the visibility with the shifts, I mean, we were surprised at what we saw on these larger franchises as we are navigating through the fourth quarter, and that is what's caused us to revise our guidance. I would say, in general, we've driven incredible growth in our digital business over the last four years, and we've had a lot of confidence in our ability to continue to drive those results against the consumer opportunity that's in the marketplace.

Speaker Change: That is going on wholesale to direct a bricks and mortar and the digital pieces of the business.

Matthew Friend: And then just the second piece of this is, when you look at the channel shift, you know, that is going on wholesale, to direct, or bricks and mortar, you know, the digital pieces of the business, um, can you just give us any more framework around how to think about the P&L impacts, you know, at a higher level? Sure. Sure, Bob.

Speaker Change: Can you just give us any more framework around how to think about the P&L impacts at a higher level.

Matthew Friend: Well, as it relates to the visibility with the shifts, I mean, we were surprised at what we saw on these larger franchises as we were navigating through the fourth quarter. And that is what's caused us to revise our guidance. I would say, in general, we've driven incredible growth in our digital business over the last four years, and we have had a lot of confidence in our ability to continue to drive those results against the consumer opportunity that's in the marketplace.

Speaker Change: Sure sure.

Speaker Change: As it relates to the visibility with the shifts I mean, we were surprised at what we saw on these larger franchises as we are navigating through the fourth quarter and that is what's caused us to revise our guidance I would say in general we've driven incredible growth in our digital business over the last four years and we've had a lot of confidence in our ability to continue.

Speaker Change: To drive those results against the consumer opportunity Thats in the marketplace.

Matthew Friend: I think most recently, in the context of managing our overall franchises, the dynamic of increasing supply of these franchises in the wholesale marketplace relative to having the supply of them on digital, and the relative balance between those factors, drove some of the volatility this quarter. And looking at the trend in retail sales, but also looking at our overall plans for how we manage franchises, based on our experience of doing this, we've made the adjustments in this forward-looking guidance, and we've been more aggressive with it on Nike.

Matt: I think most recently, in the context of managing our overall franchises, the dynamic of increasing supply of these franchises in the wholesale marketplace relative to having the supply of them on digital, and the relative balance between those factors are what drove some of the volatility this quarter. And looking at the trend and retail sales, but also looking at our overall plans for how we manage franchises, you know, based on our experience of doing this, we've made the adjustments in this forward-looking guidance, and we've been more aggressive with it on night.

Speaker Change: I think most recently in the context of managing our overall franchises the dynamic of.

Speaker Change: Increasing supply of these franchises in the wholesale marketplace relative to having the supply of them on digital and the relative balance between those things are are those factors are what drove some of the volatility this quarter and looking at the trend in retail sales, but also looking at our overall plans.

For how we manage franchises based on our experience of doing this we've made the adjustments in this forward looking guidance and we've been more aggressive with it on Nike digital.

Matthew Friend: And so, you know, we're continuing to improve with the capabilities that we're building in terms of demand sensing, leveraging data and insights in order to have better predictability in our own business, but I feel really good about the adjustments that we're making at this point in time and the aggressiveness through which we are the rest of the rest of the way that we continue to manage. I'd also just say that when I look at the digital business overall, And if I exclude the impact of the biggest franchises on our digital business, the rest of our digital business was healthy, and we were pleased with the growth that it delivered. And so from that end, we feel we feel comfortable in the way that we are that we're looking.

And so we're continuing to improve with the capabilities that we're building in.

Speaker Change: In terms of demand sensing leveraging data and insights in order to have better predictability of our of our own business, but I feel really good about about the adjustments that we're making at this point in time.

Speaker Change: And the aggressiveness through which we are.

Speaker Change: The rest of the rest of the way that we continue to manage it I'd also just say that when I look at the digital business overall.

Speaker Change: We were already planning for lower launches in Q4, because we had an extraordinary number of launches in the fourth quarter of the prior year and if I exclude the impact of the biggest franchises on our digital business. The rest of our digital business was healthy and we were pleased with the growth that it delivered and so.

Speaker Change: From that and we feel we feel comfortable in the way that we're that we're that we're looking at this as far as the channel shift mix going forward. It certainly will have a headwind in fiscal year 'twenty five both in terms of revenue as I just mentioned in answering a prior question, but also on margin and these products.

Matthew Friend: As far as the channel shift mix going forward, it certainly will have a headwind in fiscal year 25, both in terms of revenue, as I just mentioned in answering a prior question, but also on margin. And these products also have an outweighed impact on margin, just given the high levels of full price realization that we've been driving across these franchises. And so we are planning for channel mix to be a headwind in 25.

Speaker Change: Also have an outweighed impact on margin just given the high levels of full price realization that we've been driving across across these franchises and so we are planning for channel mix to be a headwind in 'twenty five.

Matthew Friend: But I'm pleased that we're still able to expand margins 10 to 30 basis points in the year, and that's despite another year of about 15 basis points of foreign exchange. So we are expanding margins as we look towards fiscal year 25. And we still believe that while Channel Mix may be less of a driver as we look forward, we have a number of other opportunities to continue to drive more profitable business over the long term. And it starts with a strong brand.

Speaker Change: But I'm pleased that we're still able to expand margins 10 to 30 basis points.

Speaker Change: In the year and that's despite another year of about 15 basis points of foreign exchange headwinds. So we are expanding margins as we look towards towards fiscal year 'twenty five and we still believe while channel mix, maybe less of a driver as we look forward.

Speaker Change: We have a number of other opportunities to continue to drive more profitable business over the long term.

Speaker Change: And it starts with a strong brand and it starts with creating great products that consumers love.

John J. Donahoe: And it starts with creating great products that consumers love. And I'd add to that a healthy, healthy marketplace where its channel channel mix is driven by consumer demand. You know, we said we wanted to be where the consumer is, whether that's digital, our own door, or wholesale. And so we're embracing a more balanced approach to growing the whole marketplace. And a couple of nice evidence points of what I think health looks like are we've mentioned that that performance grew double digits in the quarter. It grew double digits in wholesale, and it grew double digits on digital. The first couple of weeks of PEG 41 sold well in wholesale, and it sold well in Nike Direct, both digital and outdoors.

And I'd add to that a healthy a healthy marketplace, where its channel channel mix is driven by consumer demand.

Speaker Change: We said, we want to be where the consumer is whether that's digital our own door or wholesale and so we're embracing a more balanced approach to growing the whole marketplace.

And a couple of nice evidence points of what I think health looks like is we've mentioned that that performance grew double digits in the quarter.

Speaker Change: It grew double digits in wholesale and grew double digits on digital so first couple of weeks of Peg 41 sold through well in wholesale and it so well in Nike direct both digital and our doors and so over time, our channel mix should be driven by consumer being at with at the consumer.

Adrienne Eugenia Yih: And so over time, our channel mix should be driven by the consumer being at the right time and given shopping occasion. And so we think it'll settle out in a consumer-friendly way. Our next question comes from the line of Adrienne Yih with Barclays. Great, thank you very much.

At the right time in a given shopping occasion and so so we think it will settle out.

Speaker Change: Consumer friendly way.

Okay.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Adrienne <unk> with Barclays.

John J. Donahoe: I was wondering if you could talk about the amount of newness that is coming down the pipeline, you know, kind of over the next six to 12 months? Has there been another time when Nike has historically launched this magnitude of newness? And how do you read sort of the second degree of the consumer, right?

Speaker Change: Great. Thank you very much.

Adrienne Eugenia Yih: I was wondering if you can talk about the.

Speaker Change: Out of newness that is coming down the pipeline kind of over the next six to 12 months.

Speaker Change: At the time when Nike has historically launching this magnitude of munis.

Speaker Change: And how do you read this.

Speaker Change: Second degree of the consumer is going into the wholesale channel first how do you read the success of that kind of at the end consumer as it goes through the wholesale pipeline. Thank you.

Speaker Change: Well as you as we've said we set it for now for a couple of quarters. We are very excited about this multi year innovation pipeline in cycle.

Speaker Change: And its just its <unk> seen some early examples of it in this past quarter with DN in page 41, and as we are saying as we move into the end of the end of.

Speaker Change: This is.

Speaker Change: Second half of this fiscal year, which we talk about as spring 'twenty five in summer 'twenty five the seasons.

Speaker Change: The amount and breadth and depth of the innovation is just accelerating.

Speaker Change: <unk>.

Speaker Change: And at our size and scale, we know we need to both innovate broadly and deeply but also provide innovations that can scale.

Speaker Change: So we've set a goal of doubling our.

Speaker Change: The growth of our new innovations by the end of 'twenty five versus the beginning of 'twenty four and we're on track to achieve that.

John J. Donahoe: So it's going into the wholesale channel first. How do you read the success of that sort of at the end consumer as it goes through the wholesale pipeline? Thank you.

John J. Donahoe: Well, as we've said for now for a couple quarters, we're very excited about this multi-year innovation pipeline and cycle, and it's just, you've seen some early examples of it in this past quarter with DN and PEG-41 and as we are saying as we move into the end of the end of this second half of this fiscal year, which we talk about is spring 25 and summer 25 this season. The amount, breadth, and depth of the innovation is just accelerating significantly.

Speaker Change: And one of the ways you when you ask how do we know that the wholesale partner feedback on what they see both in the second half of this year and into 2006, because we're showing them three year roadmaps in many cases around running around basketball around lifestyle. The wholesale feedback has been strong.

John J. Donahoe: And at our size and scale, we know we need to both innovate broadly and deeply but also provide innovations that can scale. And so we've set a goal of doubling the growth of our new innovations by the end of 25 versus the beginning of 24. And we're on track to achieve that. And one of the ways, when you ask how we know that, the Wholesale Partner feedback on what they see both in the second half of this year and into 26.

John J. Donahoe: Because we're showing them three-year roadmaps in many cases around running, basketball, and lifestyle, the wholesale feedback has been strong, and their order books, as Matt mentioned a minute ago, are reflecting that. And so we view our job as being able to deliver strong innovation season in, season out. Also, the ability to scale those innovations over time to delight consumers and also bring us healthy and sustainable growth. So, we feel very good about the tracker on and, and we think it will accelerate as the year goes on. Adrienne, I would just add that one element of newness is also on the lifestyle side.

Speaker Change: And their order books as Matt mentioned, a minute ago are reflecting that.

And so we view our job to be able to deliver season in season out strong innovations.

Speaker Change: Also the ability to scale those innovations over time.

Adrian: Book to delight consumers and also bring us to healthy and sustainable growth. So so we feel very good about the tracker on in and we think it will accelerate as the year goes on Adrian I would just add that one element of newness is also in the lifestyle side of the business.

Matthew Friend: You know, over the last four years, we have driven double-digit growth. And as a result of that, we've created extraordinary consumer demand. And so one element of us bringing newness to the market is actually going into Nike's vaults, which no one else has, and being able to create energy the way that we've done over the last four years, to be able to move consumers on to a new place. And it's something that we can do that we have a proven track record of doing. You know, in fiscal year 19, Dunk represented 0% of Nike's business.

Adrian: Over the last four years, we have driven double digit growth.

Adrian: And created an extraordinary amount of energy, we've created iterations and.

Adrian: And.

And dimensions to Air Force, one to air Jordan, one to the Dunkin' business and as a result of that we've created extraordinary consumer demand.

Adrian: So one element of us, bringing newness to the market is actually going into Nike's fault.

Adrian: No one else has and being able to create energy the way that we've done over the last four years to be able to move consumers on to a new place and it's something that we can do that.

Adrian: That we have a proven track record doing in fiscal year 19, the dunk represented zero percent of Nike's business.

Matthew Friend: And we scaled that dramatically, with strong consumer appeal and response over the last three years. And now we're managing that franchise back to continue to ensure that demand in the marketplace is greater than the supply that we're offering. And that is how we're managing these franchises. And so, on the one hand, there's certainly a performance innovation side, and what we showed in Paris and what John was highlighting in terms of what's coming, we feel great about it, but there's also an element of Nike taking advantage of its vault of assets and bringing new innovation, new stories, new partnerships to bring new products to market to capture an incredible amount of sneaker demand in the Your next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead.

Adrian: And we've scaled that dramatically with strong consumer appeal and response over the last three years and and now we're managing that franchise back to continue to ensure that demand in the marketplace is greater than the supply that we're offering and that is how we are managing these franchises and so.

Speaker Change: On the one hand, there is certainly a performance innovation side and what we showed in Paris, and what John was highlighting in terms of what's coming we feel great about but there is also an element of Nike taking taking.

Speaker Change: Taking advantage of its vault.

Vault of assets and bringing new innovation, new stories, new partnerships to bring new products to market to capture an incredible amount of sneaker demand out in the marketplace.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead.

Brooke Siler Roach: Good afternoon, and thank you for joining us today. Thank you. I wanted to follow up on Adrienne's question and your comment about the franchise you're focused on for FY25. Can you contextualize the importance of these larger classic franchises in relation to Nike's current sales in comparison to historical averages? Do you expect to be remixed to typical franchise penetration rates by the end of the year as you scale these new innovations? And then, perhaps a follow-up from Matt, can you provide some additional color on how you're thinking about the gross margin bridge and the tailwinds that you expect from input cost and pricing relative to some of the headwinds that you... I mean, these franchises are the largest franchises in industry history, and they've gotten that way based on consumer demand.

Brooke Siler Roach: Good afternoon, and thank you for taking our question I wanted to follow up on <unk> question and your comment about the franchise management at your.

Speaker Change: <unk> focus on for FY 'twenty five.

Speaker Change: <unk> the importance of these larger our classic franchises in relation to Nike's current sales in comparison to historical averages do you expect to be remixed to typical franchise penetration rates by the end of the year as you scale. These new innovations and then perhaps a follow up from Matt can you provide some additional color on how youre thinking about the gross margin bridge.

Speaker Change: And the tailwind that you expect from ample cost and pricing relative to some of the headwinds that you see.

Speaker Change: Yes.

Speaker Change: I mean these franchises are the largest franchises in industry history and so.

Speaker Change: And they've gotten that way based on consumer demand and so we certainly started managing these franchises a couple of years ago and what we were most focused on was the fact that we needed to restrict supply of these franchises into the marketplace.

Matthew Friend: And so we certainly started managing these franchises a couple years ago, and what we were most focused on was the fact that we needed to restrict the supply of these franchises into the marketplace because we had a gap in innovation in our pipeline, which we've talked about over the last couple of calls. And so the intentionality around managing these franchises is that newness is what's moving the needle, and we wanted to move to more new.

Speaker Change: Because we didn't because we had a gap in innovation in our pipeline, which we've talked about over the last couple of calls and so the intentionality around managing these franchises is that.

Speaker Change: Newness is whats moving the consumer and we wanted to move to more newness and so the significance of it is the impact that it's going to take in fiscal year 'twenty five on our financial outlook as we're pulling the amount of supply down and creating better balance in our portfolio.

Matthew Friend: And so the significance of it is the impact that it's going to have on fiscal year 25 on our financial outlook as we're pulling the amount of supply down and creating a better balance in our portfolio. And when I say that, I don't mean that lightly.

Speaker Change: And that and when I say that I don't mean that lightly I mean, better balance between performance and lifestyle better balanced between high price points and lower price points better balance between wholesale and direct even within wholesale between sporting goods and.

Matthew Friend: I mean a better balance between performance and lifestyle, a better balance between high price points and lower price points, a better balance between wholesale and direct, even within wholesale, between sporting goods and athletic specialty or other channels. And so that is where our focus is. And I think the actions that we're taking and the guidance that we've provided. And, you know, I've been at Nike for over 15 years. And, you know, we've gone through these product cycle transitions before.

Speaker Change: And.

Speaker Change: <unk>.

Speaker Change: Athletic specialty.

Speaker Change: Our other channels and so that is where our focus is and I think the actions that we're taking in the guidance that we've provided is to follow through on those actions and I've been at Nike for over 15 years and.

Matthew Friend: And, you know, while this is challenging, and it's going to be challenging over the next couple of quarters, our history has demonstrated that when we take action, and we do it aggressively, and we get behind the things that are new, and we build marketing and storytelling around them, we move the consumer fairly quickly to a new place. And that's, and what we're doing here is nothing different. Our next question will come from the line of Michael Binetti with Evercore. Please go ahead.

We've gone through these product cycle transitions before and.

Speaker Change: While while this is challenging and it's going to be challenging over the next couple of quarters. Our history has demonstrated that when we take action and we do it aggressively and we get behind the things that are new and we build marketing and storytelling around it.

Speaker Change: We moved the consumer fairly quickly to a new place and Thats and what we're doing here is nothing different than that.

Speaker Change: Okay.

Speaker Change: Our next question will come from the line of Michael Binetti with Evercore. Please go ahead.

Michael Charles Binetti: Hey guys, thanks for taking our question here. And thanks for all the details. We look at 25, I guess, as we look beyond 25, you've given us a work or a year where you've got a lot of work you're going to do here, as you know you'll have classics cleaner you'll have the channel mix more stable you'll have the innovation working can you just help us think about within a historical context in the past i think you spoke to a nike that could grow high single digits but i think in the future wholesale plays more of a role china maybe doesn't grow what it once did so a few things like that that are kind of different than the old world is maybe you can help us think about what that what you see is the longer term opportunity for this for this business as channels geos and franchises come back into alignment and then i guess just at a bigger picture you know we can see the lab is back at work bringing out new technologies on the performance side but maybe walk us through how you can use innovation and performance and how you can create the halo for lifestyle which is really just more you know cyclical product i'm curious what how you guys look at the catalog and how you lean on innovation to try to drive the lifestyle stuff back to growth Well, I might just start Michael by saying as we get to a more through some of this portfolio adjustment, we still we still have significant tailwinds in our, The fact is sport is growing. The definition of sport is growing. Healthy lifestyles is becoming embraced globally. I was in China a couple weeks ago, and it was very striking to focus on healthy lifestyles.

Speaker Change: Hey, guys. Thanks for taking our question here.

Michael Charles Binetti: And thanks for all the details about <unk> 25, I guess as we look back.

Michael Charles Binetti: 25.

Speaker Change: Given us a work a year, where you've got a lot of work youre going to do here.

Speaker Change: As Youll have classics cleaner youll have the channel mix more stable you'll have the innovation working can you just help us think about within a historical context in the past. Thank you spoke to a Nike that could grow high single digits, but I think in the future wholesale plays more of a role China, maybe doesn't grow what at one stage. So a few things like that that are kind of different than the old world.

Speaker Change: Maybe you can help us think about what the what you see as the longer term opportunity for this business as channels Geos and franchises come back into alignment and then I guess just a bigger picture. We can see the lab is back at work, bringing out new technologies on the performance side, but maybe walk us through how you can use innovation and performance and how you can create the halo.

Speaker Change: For lifestyle, which is really just more cyclical product I'm curious what how you guys look at the catalog and how do you lean on innovation to try to drive lifestyle stuff back to growth.

Speaker Change: Well I might just start Michael by saying as we get to a more through some of this portfolio adjustment, we still we still have significant <unk> in our industry.

Speaker Change: The fact is sport is growing the definition of sport is growing healthy lifestyles is becoming embraced globally I was in China. A couple of weeks ago. It was very striking to focus on healthy healthy lifestyles and so I think there is a.

John J. Donahoe: And so I think there's a structural tailwind for the industry. I also think where sport happens, it's one of the derivatives of the post COVID environment. You don't have to go to the gym or the field; you can work out in your backyard or work out or take a walk or, so sports happen in many more places.

Speaker Change: Structural tailwind for the industry I also think we're sport happens it's one of the it's one of the.

Speaker Change: Derivatives of the post Covid environment, you don't have to go to the gym or the field working out in your backyard or working out or taking a walk or <unk>.

Speaker Change: So sports happening.

Speaker Change: And many more places and that line between sports and lifestyle is blurring with athleisure and so people want to look have great style, while theyre doing sport and they want to have sport and stop sport inspired style when theyre not doing sports and so we view all of those things.

John J. Donahoe: And that line between sport and lifestyle is blurring with that leisure. And so people want to look good, have great style while they're doing sport, and they want to have sport-inspired style when they're not doing sport. And so we view all those things as tailwinds, and you ask about lifestyle innovation; we want to be sport-based in our lifestyle innovation, both in footwear and apparel. And we think there's a tremendous opportunity to do that across men's, women's, and kids, and Jordan, with Jordan Streetwear being an example of it. Yeah, I'll just finish this question, and I'll come back to the start, Michael, where you asked.

Speaker Change: As <unk> and you asked about lifestyle innovation, we want to be sport based.

Speaker Change: In our lifestyle innovation, both in footwear and apparel and we think there is a tremendous opportunity to do that across mens womens.

Speaker Change: And kids and Jordan, Jordan Street, where being an example of it.

John J. Donahoe: But I would also say that the lines that blur between performance and lifestyle are really about how consumers are using products. The one thing that's undeniable is that the consumer wants more, And you can see that across the marketplace. Our teams are absolutely focused on fit and comfort as we bring these new iterations to market. And I think that when you look at products like PEG Premium or even the PEG 41 or the Vimero 18, I think you're gonna start to see consumers carrying those over into lifestyle because they're new, they're fresh, they've got a particular look.

Speaker Change: Yes ill just finish up this question and then I'll come back to the start Michael where you asked but.

Speaker Change: I would also say that the lines blur between performance and lifestyle.

Speaker Change: <unk> are really as much about how consumers are using products. The one thing thats on <unk> is that the consumer wants more comfort and you can see that across the marketplace. Our teams are absolutely focused on fit and comfort as we bring these new iterations to market and I think that when you look at products like peg premium.

Speaker Change: Or even the peg 41, or the <unk> I think youre going to start to see consumers carrying those over into lifestyle, because they're new they're fresh they've got a particular look and so we're balancing the fact that the consumer is voting for performance and innovation and we need to make sure that we've got performance and innovation that they can wear.

Matthew Friend: And so we're balancing the fact that the consumer is voting for performance and innovation. And we need to make sure that we've got performance and innovation that they can wear every day in addition to leveraging the vault, as I said before, leveraging the vault to bring classics back because there will always be demand. There will always be an energy business around classic lifestyle products, and we've got a great vault to be able to leverage. As it relates to your question about the long-term model, I guess here's what I would say, you know, we're, we're, focused on driving unit growth. And I think I said that a couple quarters ago.

Speaker Change: Every day in addition to leveraging the vault.

Speaker Change: As I said before leveraging the fall to bring classics back because there will always be a classics business there will always be.

Speaker Change: And energy business around classic lifestyle product and we've got a great vault to be able to leverage doing that as it relates to your question about the long term model I guess, here's what I would say.

Matthew Friend: And the importance of that point was that it wasn't about one particular channel or the other; it was growing the overall market. And so we're focused on driving unit growth where the consumer is. And given where we see the dynamics in the marketplace right now, we're also focused on taking back market share. And we see opportunity in the performance dimensions, in particular, to come strong with a strong pipeline of innovation to come back and take market share.

Speaker Change: Where we're focused on driving unit growth and I think I've said that a couple of quarters ago and the importance at that point was that it wasn't about one particular channel or the other it's growing the overall marketplace and so we're focused on driving unit growth, where the consumer is and given where we see the dynamics in the marketplace right. Now we're also focused on taking.

Speaker Change: Back market share and we see opportunity in the performance dimensions in particular to come strong with a strong pipeline of innovation to come back and to take market share.

Speaker Change: But this product transition is going to is going to take a little bit of time for us to work through and so over the course of the next couple of quarters.

Matthew Friend: But this product transition is going to take a little bit of time for us to work through, and so over the course of the next couple of quarters, we're going to execute the plan that we've laid out here for fiscal 25. At Investor Day in November, we will provide an updated outlook on growth and profitability, taking into consideration the marketplace dynamics that we're dealing with across the portfolio, where we are in the product transition, and also some of the strategic shifts that we've put into place over the last year. Your next question will come from the line of Aneesha Sherman with Bernstein. Please go ahead.

Speaker Change: We're going to execute the plan that we've laid out here for fiscal 'twenty five at our Investor Day in November we will provide an updated outlook on growth and <unk>.

Speaker Change: And profitability taking into consideration that the marketplace dynamics that we're dealing with across the portfolio, where we are in the product transition and also some of the strategic shifts that we've put into place over the last year.

Your next question will come from the line of Alicia Sherman with Bernstein. Please go ahead.

Aneesha Sherman: Thank you. I will start with just a quick follow-up. Matt, you talked about the challenge for the next couple of quarters. Can you clarify? Are you expecting this reset to be done by the end of the fiscal year? So are you expecting to exit FY25 at a normalized run rate on the top line without the headwind?

Speaker Change: Okay.

Aneesha Sherman: Thank you.

I'd start with just a quick follow up on that you talked about the challenge for the next couple of quarters.

Aneesha Sherman: On product lifecycle management can you clarify are you expecting this research can be done by the end of the fiscal year. So are you expecting to exit FY 'twenty by the normalized run rate on the top line without that headwind.

Matthew Friend: And then second, I'm curious about where you are on the organizational reset and kind of shifting of the cost base. How much of that $2 billion cost reallocation do you expect to be done with by the end of the fiscal year? Is it going to be frontloaded, or is it going to be spread out for the next year? Thank you.

Speaker Change: And then second I'm curious about where you are on the organizational resizing and kind of shifting of the cockpit, how much of that $2 billion cost reallocation do you expect to be done with it by the end of the fiscal year isn't going to be front loaded or is it going to be spread out over the next couple of years.

Speaker Change: Okay, Yeah, no problem. So on the on your first question.

Matthew Friend: So, on your first question, the actions that we're taking on Nike Direct and Digital are more aggressive. And so, the adjustments that we're making to our plan, specifically as it relates to our own channels, are going to be largely taken into consideration in the first half. We will continue to manage franchises because you can picture a curve that goes up and a curve that comes down. And as the curve comes down, it doesn't happen in a moment.

Speaker Change: The actions that we're taking on Nike direct and digital are more aggressive and so the adjustments that we're making to our to our plan specifically as it relates to our own channels are going to be largely taken into consideration in the first half of this year. We will continue to manage franchises because you can picture a curve that goes up and occur.

Speaker Change: That comes down and as the curve comes down it doesn't it doesn't happen in.

Speaker Change: In a moment it happens naturally over time as consumers react to supply.

Matthew Friend: It happens naturally over time as consumers react to supply coming out of the marketplace. But the actions that we're taking are also causing us to look at the broader marketplace in the second half of the year and ensure that we're reducing supply there as well to maintain a healthy marketplace and also to ensure that we've got capacity in the market to bring new products to supply. So I mentioned that we're planning on scaling newness.

Speaker Change: Supply coming out of the marketplace, but but the actions that we're taking are also causing us to look at the broader marketplace in the second half of the year and ensure that we're reducing supply there as well to maintain a healthy marketplace and also to ensure that we've got capacity in the market to bring newness in so I mentioned.

Speaker Change: We're planning on scaling newness.

Speaker Change: That newness is scaling as we make our way up through the year from minus 10 in the first quarter to down high single digits in the first half to finishing the year at down mid single digits and the largest driver of that is going to be on a full year basis. The scaling of newness that we're bringing to market, we expect to exit the year with momentum.

Matthew Friend: That newness is scalating as we make our way up through the year from minus 10 in the first quarter to down high single digits in the first half to finishing the year at down mid single digits.

Matthew Friend: And the largest driver of that is going to be on a full year basis, the scaling of newness that we're bringing to market. We expect to exit the year with momentum. And that means that we expect the new things that we're bringing to market to begin to outweigh the franchise management that we're navigating through this year. And as we look forward to 26, we'll continue to manage these franchises in line with consumer demand.

And that means that we expect the new things that we're bringing to market to begin to outweigh the franchise management that we're navigating through in this year and as we look forward to 'twenty six we will continue to manage these franchises in line with consumer demand.

Matthew Friend: But what's going to make that possible is the fact that we've got more new things coming that we're driving energy around that will be more than offsetting the way that we manage those. And then, Aneesha, on your second question, the way you asked it, I want to just distinguish one thing.

Speaker Change: What's going to make it what makes that possible is the fact that we've got more new things coming that we're driving energy around that will be more than offsetting.

Speaker Change: The way that we manage those franchises.

Speaker Change: And then a niche on the.

The second question the way you asked it I want to just distinguish one thing you mentioned organization reset that.

John J. Donahoe: You mentioned organizational reset. That's behind us. And as I mentioned earlier, we are now completely aligned across the organization around sport and the field of play. And our teams are focused. They're excited. There's just a tremendous amount of hustle throughout the organization. You can feel it.

That's behind Us and as I mentioned earlier, we are now completely aligned across the organization around sport field of play and our teams are focused theyre excited there's just a tremendous amount of hustle throughout the organization and you can feel it.

John J. Donahoe: And so that's going to continue. The headcount dimension of the Save to Invest program is behind us. And now those teams are focused on driving consumer innovation and execution. We'll look to other areas to provide ways of savings, non-labor areas, Matt, you can describe some of these, but the organization is now 100% focused on driving the growth and innovation we've been talking about on our call, and I can, again, just reassure you that everyone's got energy, hustle, and excitement about the future.

Speaker Change: And so that's going to continue so the the head count dimension of the save to invest is behind us and now those teams are focused on driving for the consumer innovation and execution.

Speaker Change: We will look to other areas to provide ways of savings non labor areas that you can describe some of these but it's that the organization is now 100% focused on driving the growth and innovation, we've been talking about through our call.

Speaker Change: I can again, just reassure you that everyone's.

Speaker Change: Got energy Hustle and excitement about the future yes.

John J. Donahoe: Yeah, I mean, we've been focused on building an operating model that with greater speed and cost productivity as we grow. And so the actions that we've taken over the past year have enabled us the opportunity to make some bold swings in fiscal year 25. We've reallocated a billion dollars into consumer facing, which includes teammates that we've invested in, in product design, and building out the merchandising function.

Speaker Change: Yes, I mean, we've been focused as we've been talking about about building, an operating model that with greater speed and cost productivity as we grow and so the actions that we've taken over the past year.

Speaker Change: It has enabled us the opportunity to make some bold swings in fiscal year 'twenty five we've reallocated a $1 billion.

John J. Donahoe: Into consumer facing activities that includes teammates that we've invested in and product design building out the merchandising function to John's point, we have sports focused teams now at global and in the geographies in order to be able to.

John J. Donahoe: To John's point, we have sport-focused teams now at global and in the geographies in order to be able to execute this new offense. And we're putting more of our investment dollars into demand creation while we're managing operating overhead tightly. We did that in fiscal year 24.

John J. Donahoe: To execute this new offense.

John J. Donahoe: And we're putting more of our investment dollars and demand creation, while we're managing operating overhead tightly we did that in fiscal year 'twenty four you saw even with the restructuring charge.

Matthew Friend: You saw, even with the restructuring charge, some significant effort to manage operating overhead so that we could reallocate resources, as I've referenced. And while these investments will take some time to drive a return, they're absolutely the right thing for us to do to reignite brand momentum and get us back on the offense with consumers. And so that's what we did, and we will continue to manage SG&A tightly, leveraging this program and this initiative to create the capacity for us to invest, to push us forward. As we wrap up, Paul, just one, maybe just one final comment. You know, this is intended for Nike's team around the world.

John J. Donahoe: Some significant effort to manage operating overhead so that we could.

John J. Donahoe: Reallocate resources as I've referenced.

John J. Donahoe: And while these investments will take some time to drive a return they're absolutely the right thing for us to do to reignite brand momentum and to get us back to get us back on the offense with consumers and so that's.

John J. Donahoe: <unk>.

John J. Donahoe: That's what we've done and we will continue to manage SG&A tightly leveraging this program and this initiative to create the capacity for us.

Two invest to push us forward with the consumer.

Paul: As we wrap up Paul just one maybe just one final comment.

Paul: This is and this is intended for nike's team around the world.

John J. Donahoe: This has been a challenging last year, and so much hard work and energy has gone into it. And I want to just thank everybody on Nike's team globally for what you've done, how you've led through this, and how you've operated through this. It's so clear to me, and I'm saying this on behalf of Matt and Heidi and Craig and our whole leadership, Nike's real competitive advantage at the end of the day is its people and its culture. And so those people and that culture are alive and well and ready to compete and hungry to drive the kind of execution and growth we've been talking about all call.

Paul: This has been a challenging last year and so much hard work and energy has gone into it.

John J. Donahoe: So I just want to wrap up with thanks to everyone on Nike's global team. Thank you for joining our fourth quarter fiscal 2024 call. We look forward to hosting many of you here at the headquarters for our investor day in late November. This concludes our call. Good evening. Thank you all for joining today's call. You may now disconnect.

Paul: And I don't want to just thank everybody on nike's team globally for what how you've led through this and how you've operated through this it's so clear to me and I'm, saying this on behalf of Matt Hardy and Craig and our whole leadership team.

Paul: Nike has real competitive advantage at the end of the day as Nike's people in Nike's culture.

Paul: And so those people and that culture is alive, and well and ready to compete and hungry to drive the kind of.

Execution and growth we've been talking about I'll call. So I just want to wrap up with a thanks to everyone on Nike's global team.

Paul: Thank you for joining.

Paul: Fourth quarter fiscal 2020 for coal, we look forward to hosting many of you.

Paul: Here at the headquarters.

Paul: For our Investor day in late November and more details to come this concludes our call good evening.

Speaker Change: Thank you all for joining today's call you may now disconnect.

Speaker Change: Okay.

Speaker Change:

Speaker Change:

Speaker Change: Hum.