Q4 2025 Nike Inc Earnings Call

Operator: Good afternoon, everyone, and welcome to Nike Inc.'s fiscal 2025 fourth quarter conference call. For those who want to reference today's press release, you'll find it at investors.nike.com.

Good afternoon, everyone and welcome to Nike, Inc. 's fiscal 2025 fourth quarter conference call for those who want to reference today's press release, you'll find it at investors Nike Dotcom, 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.

Paul Trussell: 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. Hello, everyone, and thank you for joining us today to discuss Nike Inc.'s fiscal 2025 fourth quarter results. Joining us on today's call will be Nike Inc.

Speaker Change: Thank you operator.

Hello, everyone and thank you for joining us today to discuss Nike, Inc. 's fiscal 2025 fourth quarter results.

Speaker Change: Joining us on today's call will be Nike, Inc, President and CEO Elliott heal and our CFO Matt friend.

Paul Trussell: President and CEO, Elliott Hill, 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. 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.

Speaker Change: Before we begin let me remind you that participants on this call. We'll 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.

Speaker Change: 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.

Please refer to Nike's earnings press release, or Nike's website investors Nike Dot com for comparable GAAP measures and quantitative reconciliations all growth comparisons on the call today are presented on a year over year basis, and our currency neutral unless otherwise noted.

Paul Trussell: 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. Thank you for your cooperation on this.

Speaker Change: I 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.

Speaker Change: Thank you for your cooperation on this.

Paul Trussell: I'll now turn the call over to Nike Inc.

Speaker Change: I'll now turn the call over to Nike, Inc, President and CEO Elliott Hill.

Elliott Hill: President and CEO, Elliott Hill. Thank you, Paul, and hello, everyone. I'll kick it off with a reflection on Faith Kipjagen's attempt to run the mile in under four minutes today, called Breaking Four. while she crossed the line at a personal best of 4.06. Today's attempt will always represent more than the pursuit of a specific singular time. We're super proud of Faith, our teams, and everyone who supported her, and we were all inspired by her efforts. The Breaking Forward journey will live on as a symbol of courage and ambition. You have to dare to try. and I deeply admire the monumental effort.

Elliott Hill: Thank you Paul and Hello, everyone.

I'll kick it off with a reflection on phase <unk> attempt to run the mile in under four minutes today called breaking for.

Speaker Change: While she cross the line at a personal best a 406 today's at Tim will always represent more than the pursuit of a specific singular time.

Speaker Change: We're super proud of faith, our teams and everyone who supported her and we were all inspired by her effort.

Speaker Change: Breaking for journey will live on as a symbol of courage and ambition.

Speaker Change: You have to dare to try.

Speaker Change: And I deeply admire the monumental effort.

Elliott Hill: What it showed is that no other brand offers athletes the depth of expertise that we can. No other brand dreams as big as we can, and more than anything, no other brand inspires eight billion potential athletes. To believe.

Speaker Change: What it showed is that no. Other brand offers athletes the depths of extra expertise that we can.

Speaker Change: No other brand dreams as big as we can and more than anything no. Other brand inspires 8 billion potential athletes.

Speaker Change: To believe.

Elliott Hill: Faith's historic attempt comes at a unique moment for Nike and our consumers. As the sportswear industry continues to operate under geopolitical volatility and tariff uncertainty. specifically to our business.

Speaker Change: Face Historic attempt comes at a unique moment for Nike and our consumers as the sportswear industry continues to operate under geopolitical volatility and tariff uncertainty.

Speaker Change: Specifically to our business. The results we're reporting today Q4 and in FY 'twenty five are not up to the Nike standard.

Elliott Hill: The results we're reporting today in Q4 and in FY25 are not up to the Nike standard. But as we said 90 days ago, the work we're doing to reposition the business through our win now actions is having an impact. From here. We expect our business results to improve.

Speaker Change: But as we said 90 days ago. The work, we're doing to reposition the business through our win now actions is having an impact.

Speaker Change: From here.

Speaker Change: We expect our business results to improve.

Speaker Change: It's time to turn the page.

Elliott Hill: It's time to turn the page. Just look at the pace of change we've embraced and the progress we've made over the last eight months. It all started on October 14th, my first day back at Nike, with an all-employee meeting and a declaration to our teammates that we are a sport and a growth company. and that we will put the athlete at the center of everything that we do and every decision that we make. In December, we aligned our teams against the five windmill actions, culture, product, marketing, marketplace, and our ground game with a sharp focus on five key sports.

Speaker Change: Just look at the pace of change we've embraced and the progress we've made over the last eight months.

Speaker Change: It all started on October 14th My first day back at Nike with an all employee meeting.

Speaker Change: And a declaration to our teammates that we are a sport and a growth company.

Speaker Change: And that we will put the athlete at the center of everything that we do and every decision that we make.

Speaker Change: In December we aligned our teams against the five when now actions culture product marketing marketplace at our ground game with a sharp focus on five key sports three key countries and five key cities.

Elliott Hill: three key countries and five key cities. We also set out to aggressively right-size three very important franchises. Air Force One. Dunk, and the AJ1, and to return Nike Digital to a premium destination. With our teams executing against our actions, I flattened my leadership structure and made changes to 11 of my 15 direct reports. We pulled the lever, we could pull the fastest, investing heavily in big sport moments and key product launches to win back our brand voice. That energy has ignited Nike performance products with consumers. which is helping us to better balance our portfolio. Reclaiming our voice in sports has turned out to be the jumpstart we needed for our team culture too.

Speaker Change: We also set out to aggressively right size three very important franchises the air Force one.

Speaker Change: Dark and the AJ, one and so returned Nike digital to a premium destination.

Speaker Change: With our teams executing against our actions have flattened my leadership structure and made changes to 11 of my 15 direct reports.

Speaker Change: We pulled the lever we can pull the fastest investing heavily in big sport moments and key product launches to win back our brand voice.

Speaker Change: That energy has ignited Nike performance products with consumers.

Speaker Change: Which is helping us to better balance our portfolio.

Speaker Change: Reclaiming our voice and sports has turned out to be the jumpstart, we need it for our team culture too.

Elliott Hill: I see the fight in our teams, we believe, and we're competing. A sharp sport point of view and a less promotional Nike marketplace is helping us gain the confidence of wholesale partners. I'm personally meeting with our partners to reaffirm that we're prioritizing and investing in their businesses. We're also strategically adding more points of distribution to be in the path of a wider range of consumers. Nike Direct is showing early signs of being a more premium destination, especially when tied to a sport moment, a key product launch, or a Nike-created on-the-ground activation.

Speaker Change: See the fight and our teams, we believe and we're competing.

Speaker Change: A sharp sport point of view.

Speaker Change: And a less promotional Nike marketplace is.

Speaker Change: Helping us gain the confidence of wholesale partners.

Speaker Change: I am personally meeting with our partners to reaffirm that we are prioritizing and investing in their businesses.

Speaker Change: We are also strategically adding more points of distribution to be in the path of a wider range of consumers.

Speaker Change: Nike direct is showing early signs of being a more premium destination, especially when tied to our sport moment, a key product launch or a Nike created on the ground activation.

Elliott Hill: To accelerate our win now actions, the next step is to realign into dedicated, cross-functional teams by sport. We're organizing into a sport offense to have deeper relationships with the athletes we serve. to gain better insight. to drive sports specific innovation, telling inspiring stories and differentiating ourselves in the marketplace. Instead of a men's, women's, and kids' construct, Nike, Jordan, and Converse teams will now come to work every day with a mission to create the most innovative and coveted product Footwear, Apparel and Accessories. for the specific athletes they serve. These sport-obsessed teams will create greater dimension and distinction for our three brands, will make us more competitive, and will accelerate our growth.

Speaker Change: To accelerate our win now actions. The next step is to realign into dedicated cross functional teams by sport.

Speaker Change: We're organizing into a support office.

Speaker Change: Have deeper relationships with the athletes we serve.

Speaker Change: <unk> better insights to drive sports specific innovation, telling inspiring stories and differentiating ourselves in the marketplace.

Speaker Change: Instead of a men's women's and kids construct Nike Jordan and converse teams will now come to work every day with a mission to create the most innovative and coveted product.

Speaker Change: Footwear apparel and accessories.

Speaker Change: For the specific athletes they serve.

Speaker Change: The sport obsessed teams will create greater dimension and distinction for our three brands will make us more competitive and.

Speaker Change: And we'll sell accelerate our growth.

Elliott Hill: We'll pay it off in an integrated marketplace of our own design. will invest in Nike Direct, digital and physically. and thoughtfully segment wholesale partners to serve sport specific consumers across channels. and Up and Down Price Point. Strategically. Sharper marketplace segmentation in a sport offense allows us to deliver unique assortments and storytelling opportunities. across different channels and partners. better serve our consumers and to help drive profitable, sustainable growth for our partners. We're already moving on a number of these fronts. better serve wholesale partners. We're in the process of hiring retail marketing, visual merchandising, and account management teammates.

Speaker Change: We will pay it off in an integrated marketplace of our own design.

Speaker Change: Invest in Nike direct digital and physically.

Speaker Change: And thoughtfully segment wholesale partners.

Speaker Change: It serves sport specific consumers.

Speaker Change: Across channels.

Speaker Change: And up and down price points.

Speaker Change: Strategically.

Speaker Change: Sharper marketplace segmentation in a sport offense allows us to deliver a unique assortments and storytelling opportunities occur.

Speaker Change: Across different channels and partners to better serve our consumers and to help drive profitable sustainable sustainable growth for our partners.

Speaker Change: We're already moving on a number of these fronts to better serve wholesale partners. We're in the process of high end retail marketing visual merchandising and account management teammates.

Elliott Hill: And in Nike Direct, we're getting into the rhythm of lining up against sport moments and key product launches. Two wholesale partnership examples this quarter were with Dix through our 24-7 training collection. and with JD to the Air Max 95. Rizal. Elevated Presentations, Better Consumer Connections, and Increased Sell Through. Earlier this month, our Nike LA door at the Grove was home base for a highly successful global after dark run series. Hosting thousands of women runners in LA created energy throughout the week. the day before the race. captured our best sales day at the Grove in three years.

Speaker Change: And Nike direct we're getting into the rhythm of lining up against sport moments and key product launches.

Speaker Change: Two wholesale partnership examples this quarter, where were worked through with Dick's through our $24 seven training collection.

Speaker Change: And with J D do the air Max 95.

Speaker Change: The result.

Speaker Change: Elevated presentations better consumer connections and increased sell throughs.

Speaker Change: Earlier this month, our Nike La Dore at the Grove was Homebase for a highly successful global after dark run series.

Speaker Change: Hosting thousands of women runners in L. A created energy throughout the week.

Speaker Change: The day before the race, we captured our best sales day at the Grove in three years.

Elliott Hill: And at the conclusion of the inspiring French Open Finals, Nike Digital posted the pre, during, and post-game looks of Carlos Alcaraz and Yannick Senner with a 30% bump in day-to-day self-esteem. Shumarai. Sportland Assortment. in the moment storytelling and elevated presentations in a segmented and differentiated marketplace. These are some of the many ways we will compete. Brand by brand. Sport by Sport, Geo by Geo. The truth is we're in a fight in every sport we're in. and each sport has different competitors. As we begin to align our iconic brands by sport, we'll have a closer line of sight so we can develop targeted plans to match up against each one of them.

Speaker Change: And at the conclusion of the inspiring French open finals, Nike digital posted the pre during and post game looks.

Speaker Change: Carlos Alvarez and Yandex Center.

Speaker Change: A 30% bump in paid today sell through.

Speaker Change: Consumer right sport led Assortments in.

Speaker Change: In the moment storytelling and elevated presentations.

Speaker Change: A segmented and differentiated marketplace.

Speaker Change: These are some of the many ways we will compete.

Speaker Change: Brand by brand.

Speaker Change: By sport Geo by Geo.

Speaker Change: The truth is ratified.

Speaker Change: We are in a fight in every sport we're in.

Speaker Change: And each four has different competitors as.

Speaker Change: As we began to align our iconic brands by sport will.

Speaker Change: We will have a closer line of sight. So we can develop targeted plans to match up against each one of them.

Elliott Hill: We're approaching every opportunity with an athlete mindset, passion. Commitment and Determination.

Speaker Change: We're approaching every opportunity with an athlete mindset.

Speaker Change: <unk> commit.

Speaker Change: Commitment and determination.

Elliott Hill: Our teams are also making strong progress in expanding our distribution with strategic partners. I'll focus briefly on North America, who in this quarter. led a Gen Z targeted experience with Urban Outfitters. becoming the number one brand in select doors on the opening weekend. We entered over 200 women's-led doors. including boutiques like Aritha. We hosted 30 running specialty accounts from around the world at the Nike campus. for 4-Day Immersion and our upcoming running innovation. We leverage two of our iconic brands, Nike and Jordan, to create meaningful product activation with key city specialty partners along the I-95 corridor.

Speaker Change: Our teams are also making strong progress in expanding our distribution with strategic partners.

Speaker Change: Ill focus briefly on North America, who in this quarter.

Speaker Change: Gen Z targeted experienced with urban outfitters, becoming the number one brand in select doors on the opening weekend.

Speaker Change: We entered over 200 women's led doors.

Speaker Change: Including boutiques like a riskier.

Speaker Change: We hosted 30 running specialty accounts from around the world at the Nike campus.

Speaker Change: For four day immersion and our upcoming running innovations.

Speaker Change: We leveraged two of our iconic brands, Nike and Jordan to create meaningful product activation with key city specialty partners, along the I 95 corridor.

Elliott Hill: And finally, we announced a new partnership with Amazon. This fall, they'll carry a select assortment of footwear, apparel, and accessories, and Nike will have a featured brand store on the platform focused on running, training, basketball, and sportswear. The Nike Integrated Marketplace is beginning to take shape. Along with the Nike Direct, these partners will play an important role in serving a wider range of consumers. This is Nike at its best. leveraging our portfolio of brands and sport-led product offerings across multiple channels and up and down price points.

Speaker Change: And finally, we announced a new partnership with Amazon.

Speaker Change: This fall they'll carry a select assortment of footwear apparel and accessories and Nike will have a feature brand store on the platform focused on running training basketball and sportswear.

Speaker Change: The Nike integrated marketplace is beginning to take shape, along with the Nike direct these partners will play an important role in serving a wider range of consumers.

Speaker Change: This is Nike had its best leveraging our portfolio of brands and sport led product offerings across multiple channels and up and down price points.

Elliott Hill: Q4 was also filled with a number of sport moments for Nike, Jordan, and Converse. All three brands showed up with louder brand statements to leverage the emotion of epic storylines. at the golf majors with Rory and Scotty, with Asia to kick off a new WNBA season, at the Champions League final with PSG and Inter Milan, with Shea for both his MVP and the Thunders NBA championship. and at Roland Garros with Alkaraz and Senner. All of that. is in 90 days. It's a reminder of the strength of Nike's athlete relationship. and our brand's far-reaching influence across all sports.

Speaker Change: Q4 was also feel filled with a number of sport moments for Nike Jordan and converse all three brands showed up with a with Lauder brand statements to leverage the emotion of epic storylines at.

Speaker Change: At the golf majors, with Rory and Scotty with Asia to kick off a new WNBA season at the Champions League final with Phe in inter Milan with Shay for both his MVP and the Thunders NBA Championship.

Speaker Change: And at Roland Garros with apparatus and center.

Speaker Change: All of that.

Speaker Change: Is it 90 days.

Speaker Change: As a reminder of the strength of Nike's athlete relationship.

Speaker Change: And our brands far reaching influence across all sports.

Elliott Hill: Shifting to our product portfolio, we made progress this quarter in rebalancing sportswear and performance. We're getting back to executing our formula more consistently to create innovative and coveted products. Accelerate demand through emotional storytelling and then scale at an unmatched level to meet the growing demand in the marketplace. Take Nike running as an example, which grew high single digits overall for the quarter. The Energy was led by Bavaro 18, which in just over 90 days has already become a $100 million plus franchise with strong sell through. In basketball, our women's business expanded more than 50% this fiscal year, proving that product demand is catching up to the spike in energy surrounding the women's game.

Speaker Change: Shifting to our product portfolio, we made progress this quarter and rebalancing sportswear and performance.

Speaker Change: Getting back to executing our formula more consistently to create innovative and covenant product accelerate demand through a more emotional storytelling and then scale at an unmatched level to meet the growing demand in the marketplace.

Speaker Change: Take Nike running as an example, which grew high single digits overall for the quarter.

Speaker Change: The energy was led by <unk>, which is just over 90 days has already become a $100 million plus franchise with strong sell through.

Speaker Change: And basketball, our women's business expanded more than 50% this fiscal year proving that product demand is catching up to the spike in energy surrounding the women's game.

Elliott Hill: The biggest basketball headline this quarter was the retail release of Asia Wilson's signature collection and her first shoe, the A1. It showed how effective we are when we line everything up for a thoughtful journey, closely planned with the athlete. The first launch sold out in three minutes on Nike Digital in North America and will double the amount of Asia pairs in coming seasons. In sportswear, the look of running footwear saw continued strength through products like P6000. Romero-Five, and Shox. And we're reintroducing the Air Max 95 to a new generation of consumers through a more thoughtful seeding journey of high energy driving models through different channels account by account.

Speaker Change: The biggest basketball headline this quarter was the retail release of Asia Wilson's signature collection and her first few that one it showed how effective we are when we lined everything staying up for a thoughtful journey closely plan with the athlete.

Speaker Change: The first launch sold out in three minutes on Nike digital in North America, and will double the amount of Asia pairs in coming seasons.

Speaker Change: In sportswear the look of running footwear saw continued strength through products like <unk> 6000 <unk>.

Speaker Change: Romero five and shocks and we're reintroducing the air Max 95 to a new generation of consumers through a more thoughtful seeding journey of high energy driving models from different channels account by account.

Elliott Hill: and to early adopters like athletes and creative partners in our key cities.

Speaker Change: And through early adopters like athletes and creative partners in our key cities.

Elliott Hill: While we have a ways to go to return to a truly diversified sportswear lineup at scale, I'm pleased with the progress the team is making.

Speaker Change: While we have a ways to go to return to a truly diversified sportswear our lineup at scale.

Speaker Change: I am pleased with the progress the team is making.

Elliott Hill: I'll close by saying a few words on fiscal year 26. As we put the sport offense in place. We're building a full pipeline of innovative product and driving momentum in the marketplace. I see a clear path to recovery ahead. A strong signal of our progress is the momentum we're seeing in Nike performance products, which we expect to continue throughout fiscal year 26. and running. Our nine box footwear lineup will continue to deliver new innovation. will approach basketball through multiple dimensions and will build on apparel opportunities in training, golf and tennis that span the spectrum of sport and style.

Speaker Change: I'll close by saying a few words on fiscal year 'twenty six.

Speaker Change: As we split as we put the support office in place.

Speaker Change: We're building a full pipeline of innovative products and driving momentum in the marketplace.

Speaker Change: I see a clear path to recovery ahead.

Speaker Change: A strong signal of our progress as the momentum we're seeing in Nike performance product.

Speaker Change: Which we expect to continue throughout fiscal year 2006.

Speaker Change: And running.

Speaker Change: Our nine box footwear lineup will continue to deliver new innovation.

Speaker Change: We'll approach basketball through multiple dimensions, and we will build on apparel opportunities in training golf and tennis.

Speaker Change: That span the spectrum of sport and style.

Elliott Hill: In global football, the stage is set for an intense World Cup battle. We're prepared with an upgrade of all three football boot silos in a 12-month window. Our kits look phenomenal, and we'll debut an exciting apparel innovation that'll scale across multiple sports. The early feedback to the product pipeline from our wholesale partners at our engagement meetings has been positive. For example, our order book is improving sequentially with our holiday orders up. We're finding a better balance with our portfolios, sport performance, and new dimensions of sportswear expected to offset the declines in our classic franchise with wholesale partners.

Speaker Change: And global football.

Speaker Change: The stage is set for an intense World Cup Battle, we're prepared with an upgrade of all three football boot silos, and a 12 month window, our kits looked phenomenal and will debut and exciting apparel innovation that'll scale across multiple sports.

Speaker Change: The early feedback to the product pipeline from our wholesale partners at our engagements meetings has been positive.

Speaker Change: For example.

Speaker Change: Our order book is improving sequentially with our holiday orders up.

Speaker Change: We're finding a better balance with our portfolio of sport performance and new dimensions of sportswear expected to offset the declines in our classic franchise with wholesale partners.

Elliott Hill: As I step back and look at the overall progress against our window actions by geography, Momentum and confidence are building in North America and EMEA. APLA's progress varies by individual country. and China will take longer due to the unique characteristics of the marketplace. We've been operating in China for over four decades, and our teams know what is required to return to growth. We're executing our plans and trending in the right direction. But a full recovery will take time.

Speaker Change: As I step back and look at the overall progress against our window actions by geography.

Speaker Change: Momentum and confidence are building in North America and EMEA.

Speaker Change: Aplp's progress varies by individual country.

Speaker Change: In China, we will take one take longer due to the unique characteristics of the marketplace.

Speaker Change: We've been operating in China for over four decades, and our teams know how what is required to return to growth.

Speaker Change: We're executing our plans and trending in the right direction.

Speaker Change: But a full recovery will take time.

Elliott Hill: I believe we have everything we need to win. and we are ready for the new fiscal year. We're laser focused on what we can control, inspiring and innovating for the 8 billion consumers we have the privilege to serve. We know what it'll take to set off the next wave of growth for Nike. From here, it's on us to get back to executing at the level we expect. and, like, Faith Kipiagin. Our entire team is ready to run towards something bigger. and is committed. to writing the next great chapter of our beloved company.

Speaker Change: I believe we have everything we need to win.

Speaker Change: And we are ready for the new fiscal year.

Speaker Change: We're laser focused on what we can control inspiring and innovating for the 8 billion consumers, we have the privilege to serve.

Speaker Change: We know what it'll take to set off the next wave of growth for Nike.

Speaker Change: From here it is.

Speaker Change: On us to get back to executing at the level we expect.

Speaker Change: And like faith Kippy Aegean.

Speaker Change: Our entire team is ready to run towards something bigger.

Speaker Change: And is committed to.

Speaker Change: To writing the next great chapter for our beloved company.

Matt Friend: From here, I'll pass it to Matt. Thanks, Elliott, and hello to everyone on the call. In fiscal 25, we reclaimed our identity through sport and implemented the Win Now actions to reposition our brands and business for future growth. While in line with our expectations, We are not pleased with our financial performance. However, as I said last quarter, the fourth quarter reflected the largest financial impact from our WindNow action. We expect the headwinds to revenue and gross margin to begin to moderate. Today, I will review our financial results, highlighting progress made against our win-now action. Then I will explain our approach to the newly issued tariff.

Speaker Change: From here I'll pass it to Matt.

Speaker Change: Okay.

Speaker Change: Thanks, Elliot and Hello to everyone on the call.

Speaker Change: In fiscal 'twenty, five we reclaimed our identity through sport and.

Speaker Change: And implemented the window actions to reposition our brands and business for future growth.

Speaker Change: While in line with our expectations.

Speaker Change: We are not pleased with our financial performance.

Speaker Change: However, as I said last quarter, the fourth quarter reflected the largest financial impact from our wind now actions.

Speaker Change: We expect the headwinds to revenue and gross margin to begin to moderate from here.

Speaker Change: Today, I will review, our financial results highlighting progress made against our window actions.

Speaker Change: Then I will explain our approach to the newly issued tariffs.

Matt Friend: Last, I will provide guidance for the first quarter of Fiscal 2016. as well as additional insight for how we expect WINnow to shape our financial performance over the next. I'll begin with our financial results. For the fourth quarter, revenues were down 12% on a reported basis. and down 11% on a currency neutral basis. Nike Direct was down 14% with Nike Digital declining 26%. and Nike stores increasing to Wholesale was down nine. Gross margins declined 440 basis points to 40.3% on a reported basis. Due to higher wholesale discounts, higher discounts in our Nike factory stores, supply chain cost de-leverage, and channel mix headwinds.

Speaker Change: Last I will provide guidance for the first quarter of fiscal 2006 as well as additional insight for how we expect to win now to shape, our financial performance over the next fiscal year.

Speaker Change: I'll begin with our financial results.

Speaker Change: For the fourth quarter revenues were down 12% on a reported basis and down 11% on a currency neutral basis Nike.

Speaker Change: Nike direct was down 14% with Nike digital declining, 26% and Nike stores, increasing 2%.

Speaker Change: Wholesale was down 9%.

Speaker Change: Gross margins declined 440 basis points to 43% on a reported basis due to higher wholesale discounts higher discounts in our Nike factory stores supply chain cost deleverage and channel mix headwinds.

Matt Friend: SG&A was up 1% on a reported basis. This was driven by increased investment and demand creation up 15%, partially offset by a 3% decline in operating overhead. Our effective tax rate was 33.6%, compared to 13.1% for the same period last year, due primarily to decreased benefits from stock-based compensation and one-time items. Earnings per share was $0.14. For the full year, revenue was down 10% on a reported basis and 9% on a currency neutral. Diluted earnings per share was $2.16. Inventory was flat versus the prior year and down 1% versus the prior quarter. Inventory remains elevated, but we are making progress.

Speaker Change: SG&A was up 1% on a reported basis.

Speaker Change: This was driven by increased investment in demand creation up 15%, partially offset by a 3% decline in operating overhead.

Speaker Change: Our effective tax rate was 33, 6% compared to 13, 1% for the same period last year due primarily to decreased benefits from stock based compensation and onetime items.

Speaker Change: Earnings per share was <unk> 14.

Speaker Change: For the full year revenue was down 10% on a reported basis and 9% on a currency neutral basis.

Speaker Change: Diluted earnings per share was $2 16.

Speaker Change: Inventory was flat versus the prior year and down 1% versus the prior quarter.

Speaker Change: Inventory remains elevated but we are making progress.

Matt Friend: We close the year in line with our plans and remain on track to exit the first half of Fiscal 26 in a healthy and clean position.

Speaker Change: We closed the year in line with our plans and remain on track to exit the first half of fiscal 'twenty, six and a healthy and clean position.

Matt Friend: Now let me go deeper into our performance over the last 90 days. As I shared last quarter, our geographies are at different stages of progress against our wind now action. And as a result, business recovery is trending on different timelines. Today, I will focus my geography remarks on the specific context and insights of our wind-now progress. In North America, Q4 revenue declined 11%. Nike Direct declined 14% with Nike Digital down 25% and Nike Stores up 3%. Wholesale declined 8% EBIT declined 29% on a reported basis. North America made meaningful progress cleaning up the marketplace and repositioning Nike digital as a full price model.

Speaker Change: Now let me go deeper into our performance over the last 90 days.

Speaker Change: As I shared last quarter, our geographies are at different stages of progress against our window actions.

Speaker Change: And as a result business recovery is trending on different timelines.

Speaker Change: Today, I will focus my geography remarks on the specific context and insights of our wind now progress.

Speaker Change: In North America, Q4 revenue declined 11%.

Speaker Change: Nike direct declined 14% with Nike digital down, 25% and Nike stores up 3%.

Speaker Change: Wholesale declined 8% EBIT.

Speaker Change: EBIT declined 29% on a reported basis.

Speaker Change: North American made meaningful progress cleaning up the marketplace and repositioning Nike digital is a full price model.

Matt Friend: Momentum is building and wholesale with newness in the product portfolio. Sportswear declined in the quarter, driven by a near 40% reduction in our classic footwear franchise. Performance also declined. However, we saw strong sell through for new products offered in running and training. North America inventory actions continued with higher sales related returns and higher discounts to liquidate aged inventory. Inventory dollars and units increased due partially to investment to support new distribution, unfavorable shipment timing, and new tariffs. On digital, we saw a meaningful improvement in markdown rates, as well as a higher share of demand at full price in the quarter.

Speaker Change: Momentum is building in wholesale with newness and the product portfolio.

Speaker Change: <unk> declined in the quarter, driven by a near 40% reduction in our classic footwear franchises.

Speaker Change: Performance also declined however, we saw strong sell through for new products offered in running and training.

Speaker Change: North America inventory actions continued with higher sales related returns and higher discounts to liquidate aged inventory.

Speaker Change: Inventory dollars and units increased due partially to investment to support new distribution unfavorable shipment timing and new tariffs.

Speaker Change: On digital we saw meaningful improvement in markdown rates as well as a higher share of demand at full price in the quarter.

Matt Friend: In EMEA, Q4 revenue declined 10%. Nike Direct declined 19% with Nike Digital down 36%. and Nike stores up five. Wholesale declined 4%. EBIT declined 41% on a reported basis. Ameya is furthest along in cleaning up the marketplace and repositioning Nike Digital within an integrated marketplace. The team has demonstrated progress by delivering growth in key dimensions, key performance dimensions of our portfolio, and diversifying sportswear with new product journeys. In Q4, running and training delivered growth, offset by declines in our sportswear business. Within Sportswear, we have taken meaningful steps forward to diversify our portfolio. In fact, sportswear grew overall in wholesale in Q4, and women's sportswear, footwear, returned to growth in the quarter.

Speaker Change: In EMEA Q4 revenue declined 10% Nike direct declined 19% with Nike digital down, 36% and Nike stores up 5%.

Speaker Change: Wholesale declined 4% EBIT.

Speaker Change: EBIT declined 41% on a reported basis.

Speaker Change: EMEA is furthest along in cleaning up the marketplace and repositioning Nike digital within an integrated marketplace.

Speaker Change: The team has demonstrated progress by delivering growth in key dimensions key performance dimensions of our portfolio.

Speaker Change: And diversifying sportswear with new product journeys.

Speaker Change: In Q4, running and training delivered growth offset by declines in our sportswear business.

Speaker Change: Within sportswear, we have taken meaningful steps forward to diversify our portfolio.

Speaker Change: In fact sportswear grew overall in wholesale in Q4 and women's sportswear footwear returned to growth in the quarter.

Matt Friend: As it relates to inventory in EMEA, we ended the quarter slightly ahead of our target with inventory dollars flat and units down mid-single digits versus the prior year. Nike Digital also delivered improvements in markdown rates, as well as a double digit increase in the share of demand at full price. In Greater China, Q4 revenue declined 20%, largely in line with our plan. Nike direct decline 15% with Nike digital down 31% and Nike stores down Wholesale declined 24%. EBIT declined 45% on a reported basis. Greater China executed a deeper reset of inventory relative to our other geographies.

Speaker Change: As it relates to inventory in EMEA, we ended the quarter slightly ahead of our target with inventory dollars flat and units down mid single digits versus the prior year.

Speaker Change: Nike Digital also delivered improvements in markdown rates as well as a double digit increase in the share of demand at full price.

Speaker Change: In greater China, Q4 revenue declined 20% largely in line with our plan Nike.

Speaker Change: Nike direct declined 15% with Nike digital down, 31% and Nike stores down 6% wholesale declined 24% EBIT declined 45% on a reported basis.

Speaker Change: Greater China executed a deeper reset of inventory relative to our other geographies with higher sales related reserves higher discounts and supply reductions.

Matt Friend: with higher sales related reserves, higher discounts and supply reduction. Traffic remains challenged, and our priority is to refresh local monobrand store concepts and elevate brand presentation through sport. On product, we saw bright spots this quarter when we launched sport-led innovation like Vimero 18, or utilized our Geography Express lane to tell hyperlocal stories. Consumers continue to have strong reactions to brand activations in the market. Running returned to growth in the quarter, offset by declines in sportswear and Jordan. Inventory was down 11% versus the prior year, driven by aggressive actions to clean and reset the market. Digital remains highly promotional across the market.

Speaker Change: Traffic remains challenged and our priority is to refresh local mono brand store concepts and elevate brand presentation through sport.

Speaker Change: On product, we saw bright spots this quarter when we launched support led innovation like the marrow 18 or utilized our geography Express lane to tell hyper local stories.

Speaker Change: Consumers continue to have strong reaction to brand activations in the marketplace.

Speaker Change: Running returned to growth in the quarter offset by declines in sportswear and Jordan.

Speaker Change: Inventory was down 11% versus the prior year, driven by aggressive actions to clean and reset the marketplace.

Speaker Change: Digital remains highly promotional across the marketplace.

Matt Friend: And we have taken initial steps to reposition our own platform. with plans to extend our efforts to the broader ecosystem. and Fiscal 20. Our priority in Greater China is to refresh the monobrand marketplace. creating greater brand distinction through sport-led consumer concepts and full price growth. We have launched a pilot across select doors.

Speaker Change: And we have taken initial steps to reposition our own platform with plans to extend our efforts to the broader ecosystem in fiscal 'twenty six.

Speaker Change: Our priority in greater China is to refresh the mono brand marketplace.

Speaker Change: Creating greater brand distinction through sport led consumer concepts and full price growth.

Speaker Change: We have launched a pilot across select doors, however, our actions to energize and reset this marketplace will take time.

Matt Friend: However, our actions to energize and reset this market We'll take time. In APLA, Q4 revenue declined 3%, Nike Direct declined 1%, with Nike Digital down 6%, and Nike Stores up 4%. Wholesale declined 5%, EBIT declined 33% on a reported APLA delivered mixed results across country. with further work required to clean up in. The team has also taken initial steps to reposition Nike Digital. In the fourth quarter, our performance business returned to growth, driven by running and training. This momentum was more than offset by declines in sportswear and Jordan. Our teams took aggressive actions to clean up the market.

Speaker Change: <unk> Q4 revenue declined 3% Nike direct declined 1% with Nike digital down, 6% and Nike stores up 4%.

Speaker Change: Wholesales declined 5% EBIT declined 33% on a reported basis.

Speaker Change: <unk> delivered mixed results across countries with further work required to clean up inventory.

Speaker Change: The team has also taken initial steps to reposition Nike digital.

Speaker Change: In the fourth quarter, our performance business returned to growth driven by running and training.

Speaker Change: This momentum was more than offset by declines in sportswear and Jordan.

Speaker Change: Our teams took aggressive actions to clean up the marketplace and further tightened the buys on Nike digital.

Matt Friend: and further tighten the buys on Nike Digital. However, inventory remains elevated.

Speaker Change: However inventory remains elevated.

Matt Friend: Okay, let me spend a few minutes talking through our approach to the newly issued tariff. Over the past 50 years, Nike has built a globally expansive supply chain that is responsive and resilient. We have strong relationships with our factory partners. and our leadership team is experienced in managing through disruption. Nike has consistently been a top pair of U.S. duties. with an average duty rate on footwear imported into the United States in the mid-teens range. Therefore, these tariffs represent a new and meaningful cost head. And we are taking actions that balance the consumer, our partners, our win-now action.

Speaker Change: Okay, Let me spend a few minutes talking through our approach to the newly issued tariffs.

Speaker Change: Over the past 50 years Nike has built a globally expansive supply chain that is responsive and resilient.

Speaker Change: We have strong relationships with our factory partners and our leadership team is experienced in managing through disruption.

Speaker Change: Nike has consistently been a top payer of U S duties.

Speaker Change: With an average duty rate on footwear imported into the United States in the mid teens range.

Speaker Change: Therefore, these tariffs represent a new and meaningful cost headwind.

Speaker Change: And we are taking actions that balance the consumer.

Speaker Change: Our partners are win now actions as well as the long term positioning of our brands in the marketplace.

Matt Friend: as well as the long-term positioning of our brands in the market. First, we will optimize our sourcing mix and allocate production differently across country. to mitigate the new cost headwind into the United States. Despite the current elevated tariffs for Chinese products imported into the United manufacturing capacity and capability in China remains important to our global source. Currently, China represents roughly 16% of the footwear we import into the United States. And we expect this to reduce to the high single-digit range by the end of fiscal 26. with supply from China reallocated to other countries around the world.

Speaker Change: First we will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States.

Speaker Change: Despite the current elevated tariffs for Chinese products imported into the United States Man.

Speaker Change: Manufacturing capacity and capability in China remains important to our global source base.

Speaker Change: Currently China represents roughly 16% of the footwear, we import into the United States.

Speaker Change: And we expect this to reduce to the high single digit range by the end of fiscal 'twenty six with supply from China reallocated to other countries around the world.

Matt Friend: Second, we are partnering with our suppliers and our retail partners to mitigate the structural cost. in order to minimize the overall impact to the community. These partner arrangements will come into effect at different times throughout fiscal 26. Third, as part of our regular approach to seasonal planning, we have implemented a surgical price increase in the United States. with phased implementation beginning in fall 25. And last, we will evaluate corporate cost reduction as appropriate.

Speaker Change: Second we are partnering with our suppliers and our retail partners to mitigate this structural cost increase in order to minimize the overall impact to the consumer.

Speaker Change: These partner arrangements will come into effect at different times throughout fiscal 'twenty six.

Speaker Change: Third as part of our regular approach to seasonal planning, we have implemented a surgical price increase in the United States with phased implementation beginning in fall 'twenty five.

Speaker Change: And last we will evaluate corporate cost reduction is appropriate.

Matt Friend: However, our highest priority right now continues to be reigniting brand momentum through sport and stabilizing our business. With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately $1 billion. We intend to fully mitigate the impact of these headwinds over time. as we implement and annualize the actions I've outlined. For fiscal 26, we expect the financial impact, net of the actions described earlier, to be approximately 75 basis points to gross margin. with a greater impact in the first half. We will continue to monitor developments closely, and I am confident in our ability to lean on our strengths, our experience, and our scale to navigate through this disruption.

Speaker Change: However, our highest priority right now continues to be reignited brand momentum through sport and stabilizing our business.

Speaker Change: With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately $1 billion.

Speaker Change: We intend to fully mitigate the impact of these headwinds over time as.

Speaker Change: As we implement and annualize the actions I've outlined.

Speaker Change: For fiscal 'twenty six we expect the financial impact net of the actions described earlier to be approximately 75 basis points to gross margin.

Speaker Change: With a greater impact in the first half.

Speaker Change: We will continue to monitor developments closely and I am confident in our ability to lean on our strengths our experience and our scale to navigate through this disruption.

Matt Friend: Looking forward, we intend to continue to provide specific quarterly guidance during this period of transition. Today, I will also share some additional insights for how we expect our win now action. to shape elements of our financial performance throughout fiscal year. Momentum is building in our new product franchise. And with the holiday order book in hand, we are beginning to see more clearly around the corner of our product portfolio transition. On Fiscal 25, we made significant progress managing down our classic footwear franchise. with year-over-year declines of more than 20 percent. In Q4, these declines accelerated to more than 30%.

Speaker Change: Looking forward, we intend to continue to provide specific quarterly guidance during this period of transition.

Speaker Change: Today I will also share some additional insights for how we expect our window actions to shape elements of our financial performance throughout fiscal 'twenty six.

Speaker Change: Momentum is building in our new product franchises.

Speaker Change: With the holiday order book in hand, we are beginning to see more clearly around the corner of our product portfolio transition.

Speaker Change: In fiscal 'twenty, five we made significant progress managing down our classic footwear franchises.

Speaker Change: With year over year declines of more than 20%.

Speaker Change: In Q4, these declines accelerated to more than 30%, representing almost a $1 billion headwind to revenue.

Matt Friend: representing almost a $1 billion headwind to revenue. We also finished Q4 down approximately 10 points from the peak as a percent of our total footwear. We expect these headwinds to continue through the first half of Fiscal 26. with signals that the Air Force One is stabilizing. while we plan for larger reductions for the Dunn. We remain on track for a healthy and clean market by the end of the first half of Fiscal 2016. Over the next two quarters, Nike will continue liquidating excess inventory through our value stores and select value partners. In the second half, we then expect to see a modest headwind of revenue as we lap aggressive clearance activity in the prior year.

Speaker Change: We also finished Q4 down approximately 10 points from the peak as a percent of our total footwear mix.

Speaker Change: We expect these headwinds to continue through the first half of fiscal 'twenty six with.

Speaker Change: With signals that the Air Force one is stabilizing while we plan for larger reductions for the dunk.

Speaker Change: We remain on track for a healthy and clean market by the end of the first half of fiscal 'twenty six.

Speaker Change: Over the next two quarters, Nike will continue liquidating excess inventory through our value stores and select value partners.

Speaker Change: In the second half, we then expect to see a modest headwind to revenue as we lap aggressive clearance activity in the prior year.

Matt Friend: We continue to expect digital traffic to be down double digits in Fiscal 26. as we reposition Nike Digital as a full price model and reduce the mix of our classic footwear franchises. At the same time, we see encouraging signals of progress in the marketplace with our wholesale partners. As Elliott said, our holiday order book is up versus the prior year, with growth in North America, EMEA, and APLA partially offset by greater China. We expect SG&A to grow low single digits in fiscal 2020. We are investing to reignite growth in the business, particularly demand creation, and we.

Speaker Change: We continue to expect digital traffic to be down double digits in fiscal 'twenty six as we reposition Nike digital as a full price model and reduce the mix of our classics footwear franchises.

Speaker Change: At the same time, we see encouraging signals of progress in the marketplace with our wholesale partners.

Speaker Change: As Elliot said, our holiday order book is up versus the prior year with growth in North America, EMEA and APAC partially.

Speaker Change: Offset by greater China.

Speaker Change: We expect SG&A to grow low single digits in fiscal 'twenty six.

Speaker Change: We are investing to reignite growth in the business, particularly demand creation and.

Matt Friend: Sports, and Commercial Office. At the same time, we recognize that SG&A has deleveraged relative to historical levels. We are focused. SalesGrowth, with improving gross margins. and Disciplined Expense Management over time.

Speaker Change: Sports and commercial offense.

Speaker Change: At the same time, we recognize that SG&A has deleveraged relative to historical levels.

Speaker Change: We are focused.

Speaker Change: Sales growth with.

Speaker Change: With improving gross margins and disciplined expense management over time.

Matt Friend: We have moderated our share repurchases in the near term due to a more dynamic and uncertain environment. as well as the impact of the WinNow actions on our financial resources. We have a strong balance. and it remains a competitive advantage for our business. Overall, we are pleased with the progress our teams are making against our window action.

Speaker Change: We have moderated our share repurchases in the near term due to a more dynamic and uncertain environment as well as the impact of the wind now actions on our financial results.

Speaker Change: We have a strong balance sheet and it remains a competitive advantage for our business.

Speaker Change: Overall, we are pleased with the progress our teams are making against our window actions.

Matt Friend: As I said last quarter, these are the building blocks for Nike to return to sustainable, profitable growth.

Speaker Change: As I said last quarter. These are the building blocks for Nike to return to sustainable profitable growth.

Matt Friend: Last, I'll finish with our first quarter guidance. We will continue navigating through several factors that create uncertainty in this operating environment, including for the consumer. And so our outlook reflects our best assessment of these factors based on the data we have available today. We expect Q1 revenues to be down mid-single-day. We expect Q1 gross margins to be down approximately 350 to 425 basis. This includes approximately 100 basis points negative impact due to the new tariffs based on the rates that are in place today. We expect Q1 SG&A dollars to be up low single-digit. We expect other income and expense, including net interest in to be zero to 10 million in the first quarter.

Speaker Change: Lastly, I'll finish with our first quarter guidance.

Speaker Change: We will.

Speaker Change: Navigating through several factors that create uncertainty in this operating environment, including for the consumer.

Speaker Change: And so our outlook reflects our best assessment of these factors based on the data we have available today.

Speaker Change: We expect Q1 revenues to be down mid single digits.

Speaker Change: We expect Q1 gross margins to be down approximately 350 to 425 basis points.

Speaker Change: This includes approximately 100 basis points negative impact due to the new tariffs based on the rates that are in place today.

Speaker Change: We expect Q1 SG&A dollars to be up low single digits.

Speaker Change: We expect other income and expense, including net interest income to be zero to $10 million in the first quarter.

Matt Friend: And we expect the tax rate for the full year to be 19% to 20%, due primarily to anticipated changes in earnings.

Speaker Change: And we expect the tax rate for the full year to be 19% to 20% due primarily to anticipated changes in earnings mix.

Elliott Hill: With that, I'll pass it back to Elliott.

Elliott Hill: With that I'll pass it back to Elliot.

Elliott Hill: Before taking questions, I want to share some final thoughts on another historic sports moment this past quarter. Rory McIlroy's Masters Win. I was lucky enough to be at Augusta earlier that week, and I couldn't help but relate Rory's experience to Nike's recent journey. To me, his final round performance was a masterclass on the power of the athlete mindset. And I've been asking my Nike teammates to hold on to some of the lessons he taught us. For those of you that don't know, Rory has been chasing a Masters victory for 14 years. It would complete his career grand slam, the holy grail of goth, something only five others have ever accomplished.

Speaker Change: Before taking questions I want to share some final thoughts on another historic sports moment this past quarter.

Speaker Change: Sorry, Mcelroy Masters win I was lucky enough to be Augusta earlier that week, and I couldnt help but related royalties experience to nikes recent journey.

Speaker Change: To me his final round performance was a master class on the power of the athlete mindset.

Speaker Change: And I've been asking my Nike teammates to hold on to some of the lessons he taught us.

Speaker Change: For those of you that don't know Rory has been chasing a master's victory for 14 years.

Speaker Change: It would complete his career Grand Slam the Holy Grail of golf, something only five others have ever accomplish.

Elliott Hill: He was also battling a decade-long drought of winning a major. He's had his share of close calls and heartbreaks and more than enough doubters. Sunday's final round at Augusta was no different. What made it so fun to watch was how aggressive Rory was playing. He was taking the shots that others wouldn't, putting the pressure on the rest of the field. The one time he did play it safe, he laid it up on the 13th and rolled it into Rays Creek for a double bogey. Lesson learned. He played better when he was attacking. Despite another up-and-down round, the wind was still in his grasp.

Speaker Change: He was also badly in a decade long drought.

Speaker Change: Winning a major <unk>.

Speaker Change: He has had its share of close calls and heartbreaks and more than enough doubters.

Speaker Change: Sandy's final round at Augusta was no different.

Speaker Change: What made it so fun to watch was how aggressive Rory was planned.

Speaker Change: He was taken the shots that others wouldn't putting the pressure on the rest of the field. The one time he did play it safe delayed it up on the 13th.

Speaker Change: Rolled it into Ray's Creek for a double bogey.

Speaker Change: Lesson learned.

Speaker Change: He played better when he was attacking.

Speaker Change: Despite another up and down round the when we're still in his grasp all he needed to do was sink a five foot part on the 18th.

Elliott Hill: All he needed to do was sink a 5-foot putt on the 18. stepped up. and Miss. Widelot. He was heading to a playoff. His caddy, Harry Diamond, his lifelong friend and biggest supporter, knew just what to say. You would have given your right arm to be in the playoff at the start of the week. And that was it. the mindset shift Rory needed. He didn't have to play a playoff. He got to play a playoff. It was his for the taking.

Speaker Change: He stepped up <unk>.

Speaker Change: And missed wide left.

Speaker Change: He was heading to a playoff.

Speaker Change: His caddie, Harry Diamond is Wi flung friend and biggest supporter knew just what to say.

Speaker Change: You would have given you right arm to be in the play offs.

Speaker Change: At the start of the week.

Speaker Change: And that was it.

Speaker Change: The mindset shift Rory you need it you didn't have to play it play out.

Speaker Change: <unk> got to play a playoff.

Speaker Change: It was his for the taking.

Elliott Hill: An amazing reminder for Nike. that no matter the situation we face. We're the leader. and an exciting industry. It's a privilege to get to compete every day. And with all of our advantages we have, we're in control of our own destiny here. Rory went back to the 18th. Stuck his second shot four feet for the pin. And this time, he sank the putt. Dead center. Rory finally had his green jacket and his career grand slam.

Speaker Change: And Amazing reminder, for Nike.

Speaker Change: No matter the situation we face we're the leader.

Speaker Change: And an exciting industry.

Speaker Change: It's a privilege to get to compete every day.

Speaker Change: And with all of our advantages we have we're in control of our own destiny here.

Speaker Change: Rory went back to the 18th.

Speaker Change: Stuck his second shot four feet from the pin.

Speaker Change: And this time you safe to put.

Speaker Change: That center.

Speaker Change: Laurie finally had his green jacket and his career Grand Slam.

Elliott Hill: And we were all treated to one of the most memorable Sundays in golf for over a decade. His patience was tested. but he stayed the course. Whether it was Rory, Alcarez, Shea, or Faith these past 90 days, we worked alongside some of the most mentally tough human beings on the planet.

Speaker Change: And we were all treated to one of the most memorable Sundays in golf for over a decade. This patient was tested.

Speaker Change: But he stayed the course.

Speaker Change: Whether it was Rory Alcoa as Shay or face. These past 90 days, we worked alongside some of the most mentally tough human beings on the planet.

Elliott Hill: And lately, I've been talking a lot about the athlete mindset. that special ability to keep believing, to keep competing. I'm asking my teammates at Nike to do just that. They show up with passion, commitment, and determination. and to compete every day. I think we're on our way.

Speaker Change: And lately.

Speaker Change: I've been talking a lot about the athlete mindset.

Speaker Change: That special ability to keep believe it took.

Speaker Change: To keep competing.

Speaker Change: Asking my teammates at Nike to do just that.

Speaker Change: To show up with passion commitment and determination.

Speaker Change: To compete every day.

Speaker Change: I think we're on our way.

Speaker Change: Yeah.

Operator: We're ready for questions. We will now begin the question-and-answer session. To ask a question, press star, then 1 on your telephone keypad. We kindly ask that you please limit your initial question to 1.

Speaker Change: We are ready for questions.

Speaker Change: We will now begin the question and answer session to ask a question Press Star then one on your telephone keypad, we kindly ask that you. Please limit your initial questions to one our first question will come from the line of Matthew Boss with Jpmorgan. Please go ahead.

Matthew Boss: Our first question will come from the line of Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks. So Elliott, could you maybe elaborate on the accelerated actions under your sport offense realignment, and maybe speak to the phasing of innovation into the back half of the year and FY26.

Elliott Hill: Great. Thanks, So Elliot could you maybe elaborate on the accelerated actions under your sport offense realignment and maybe speak to the phasing of innovation into the back half of the year in FY 'twenty.

Matthew Boss: And then Matt, if you could just speak to the cadence of revenues this year, or puts and takes to consider in terms of items impacting the first quarter revenues relative to the back half of the year?

Speaker Change: And then Matt if you could just speak to the cadence of revenues. This year are puts and takes to consider in terms of items impacting the first quarter revenues relative to the back half of the year.

Speaker Change: Yeah I'll take the first part of this around product and what I will say.

Elliott Hill: I'll take the first part of this around product. And what I will say, we will lead with a sharp focus on sport. That's why we're moving to the sport offense. But before I dive deeply on product, I just want to make certain that we hit on the unmatched portfolio that we have with Depth and Dimension, three brands, Nike, Jordan, and Converse. And what we're doing, Matthew, is we're organizing into sport-obsessed teams through our sport offense, which will drive a relentless flow of innovative product across all three of the brands, performance, sportswear, men's, women's, kids', footwear, apparel, accessories, and up and down price points.

Speaker Change: We will lead with a sharp focus on sport. That's why we're moving to the sport offense, but before I dive deeply on product I just want to make certain that we hit on the unmatched portfolio that we have with depth and dimension three brands, Nike, Jordan and converse and what we're doing Matthew as we're organizing.

Speaker Change: And to support a SaaS teams through our sport offense, which will drive a relentless flow of innovative product across all three of the brands performance sportswear men's women's kid's footwear apparel accessories, and up and down price points.

Elliott Hill: We will differentiate each brand by sport and create a, which we believe will create sharper distinction and dimension. And we do know, Matthew, when we focus on sport, we win. The best example that we have right now from a product perspective is our running, which is up high single digits. We have innovated and coveted products across our nine box matrix that we've been talking a lot about. Three silos, Pegasus, Romero structure, times three price points. We also have trail and race. In terms of performance, PEG Premium, Vomero 18, our Swift and Stride apparel, they're all selling well at retail and we're getting positive feedback from our partners.

Speaker Change: We will differentiate each brand by sport and creative which we believe will create sharper distinction and dimension.

Speaker Change: And we do know Matthew when we focus.

Speaker Change: Focus on sport we win the Best example, that we have right now from a product perspective.

Speaker Change: Is are running which is up high single digits.

Speaker Change: We have innovated a covenant product across our nine box matrix that we've been talking a lot about three silos Pegasus for marrow structure times three price points. We also have trail in res.

Speaker Change: In terms of performance Peg premium <unk>.

Speaker Change: Romero 18, our Swift and stride apparel, there are all selling well at retail and we're getting positive feedback from our partners.

Elliott Hill: I mentioned it in my script that the Vomero has already become a $100 million business with growth in all geos. And so, in addition to what I just touched on, we have Vomero Plus and Vomero Premium coming, which both those shoes are beautiful shoes and incredibly innovative and distinctive. So, best example is running, continuing on in our focused sports. Training would be next in line with Momentum and sell through a Metcon and 24-7 apparel collection. In basketball, we've got signature athletes, Shea for Converse, I'm sure you guys saw Shea at the NBA Finals with his gold shoe around his neck.

Speaker Change: Should it in my script that the marrow is already becoming a $100 million business with growth in all Geos and so in addition to what I just touched on we have <unk>, plus and Romero premium common which both those shoes are beautiful shoes and incredibly innovative and distinctive. So best example is running.

Speaker Change: Continuing on and our focused sports training would be next in line with momentum and sell through of Metcom, Matt Kahn and $24 seven apparel collection.

Speaker Change: In basketball, we've got signature athletes shave for Congress <unk>.

Speaker Change: Finals with this gold shoot around his neck.

Elliott Hill: Adding dimension to the men's, to Nike basketball with Sabrina and Asia, Tatum and Luca and Jordan. Best example in terms of performance this quarter was Asia won and I hit that in prepared remarks, lined up beautiful product storytelling and it sold through at retail.

Speaker Change: Adding dimension to the mens.

Speaker Change: Mickey basketball with Sabrina in Asia.

Speaker Change: And Luca and Jordan Best example, in terms of performance. This quarter was Asia, one and I hit that in the prepared remarks lined up beautiful product storytelling and it's sold through at retail.

Elliott Hill: Global Football. Two weeks ago, we had a summit with over 200 of our partners from around the world to share with them our World Cup offering and we have exciting innovation coming to the game across our three Football Silos, Mercurial, Tiempo, and Phantom, and we have some really interesting innovation coming in our national team kits that we'll be able to leverage across other sports as we move forward. So feeling really good with our sport performance and with each season it continues to get stronger. As it relates to sportswear, we continue, as you heard throughout the prepared marks, the right size, the Air Force One, the AJ1, and the Dunk.

Speaker Change: Global football two weeks ago, we had a a summit with over 200 of our partners from around the world to share with them.

Speaker Change: Our World Cup offering and we have exciting innovation coming to the game across our three.

Speaker Change: Football silos material.

Speaker Change: CFO and Phantom.

Speaker Change: And we have some really interesting innovation coming in our national team kits that we'll be able to leverage across other.

Speaker Change: Sports as we move forward, so feeling really good with our sport performance and with each season. It continues to get stronger.

Speaker Change: As it relates to.

Speaker Change: Sportswear, we continue as you heard throughout the prepared remarks to rightsize the Air Force one the AJ one in the dark.

Elliott Hill: But we do know that we've got to have a portfolio that extends beyond those large franchises in sportswear. We've got in-air, and we will continue to leverage air because it's a proprietary technology that we have. Muse, Air Max Muse for women, and Air Max 95 are really good examples this quarter. And then we see those continuing throughout FY26. Look of running, Romero 5, P6000, Shox doing well. And we will take the consumer somewhere new in 26 with the Ava, Rover, and family. So in the end, it's going to take time to flow into the market, but we're confident in the product pipeline.

Speaker Change: But we do know that we've got to have a portfolio that extends beyond beyond those large franchises in sportswear, we've got in air and we will continue.

Speaker Change: Leverage are because it's a proprietary technology that we have Muse air Max <unk> for women and Air Max 95 are really good examples this quarter and then we see those continuing throughout for FY 'twenty six look of running Romero five 6000 shocks doing well.

Speaker Change: And we will take the consumer somewhere new and 26 with the Eva Rover and family.

Speaker Change: So in the end, it's going to take time to flow into the market, but we're confident in the product pipeline is.

Elliott Hill: getting stronger with each.

Speaker Change: It's getting stronger with each season.

Matt Friend: And Matt, I would just add that, as Elliott said, we're pleased with the progress we're making on the win now actions in the fourth quarter, reflected the largest financial impact of our win now actions. And so our guidance for Q1 and revenue down mid single digits. It's really reflective of a continuation of some of the trends that we see in Q4, such as the classics, our classic footwear franchises. We expect to continue to see headwinds from the franchise management actions that we're taking there. We expect to continue to be liquidating excess inventory through our factory stores and through some value partners on the wholesale side, and we expect digital traffic to be down as we go.

Speaker Change: And Matt I would just add that.

Speaker Change: Elliot.

Speaker Change: We're pleased with the progress we're making on the window actions in the fourth quarter.

Speaker Change: It reflected the largest financial impact of our win now actions and so our guidance for Q1 in revenue are down.

Speaker Change: Down mid single digits, its really reflective of a continuation of some of the trends that we see in Q4, such as the classics are classic footwear franchises, we expect to continue to see headwinds from the franchise management actions that we're taking there.

Speaker Change: We expect to continue to be liquidating excess inventory.

Speaker Change: Through our factory stores and through some value partners on the wholesale side and we expect digital.

Speaker Change: Traffic to be down.

Speaker Change: As we.

Matt Friend: spend less money on performance media and also manage our classic franchises. That's being offset in the first quarter by what I highlighted last quarter, which was our fall order book. We said last quarter that our fall order book almost offset the declines that we were managing in our classic footwear franchises. And now with our holiday order book being up, with North America, EMEA and APLA only partially being offset by greater China and newness across performance and sportswear that Elliott just referenced, offsetting our classic franchises, we're seeing improvement in the revenue trend. As we look to the back half, I highlighted that we expect that the franchise management headwinds will heavily be focused on the first half, but we do expect our actions on the dunk to continue throughout the full year.

Speaker Change: <unk> spend less money on.

Speaker Change: Performance media and also manage our classic franchises, that's being offset in the first quarter by what I highlighted last quarter, which was our fall order book, We said last quarter that our fall order book almost offset the declines that we were managing in our classics footwear franchises and now with our holiday order book being up.

Speaker Change: With North America, EMEA and APAC.

Speaker Change: Only partially being offset by <unk>.

Speaker Change: <unk>, greater China, and newness across performance and sportswear that Elliot just referenced offsetting that our classic franchises, we're seeing improvement in the revenue trend.

Speaker Change: As we look to the back half.

Speaker Change: I highlighted that we expect that the franchise management headwinds will heavily be focused on the first half, but we do expect our actions on the dumps to continue throughout the full year.

Matt Friend: We expect digital to continue to be a headwind for the full year as we reposition the channel. And I highlighted that we expect a modest headwind to revenue as we lap aggressive clearance activity in the second half of the prior year. But we do expect to see continued momentum building with our wholesale partners. And our wholesale partners, momentum with our wholesale partners is indicative of us cleaning the channel and confidence in our product portfolio. And it's two important elements of the building blocks of us returning to growth.

Speaker Change: We expect digital to continue to be a headwind for the full year as we reposition the channel.

Speaker Change: And I highlighted that we expect a modest headwind to revenue as we lap aggressive clearance activity.

Speaker Change: In the second half of the prior year, but we do expect to see continued momentum building with our wholesale partners.

Speaker Change: And our wholesale partners momentum with our wholesale partners is indicative of us cleaning the channel and confidence in our product portfolio and it's too important.

Speaker Change: Elements of the building blocks of us returning to growth.

Speaker Change: Okay.

Brian Nagel: Our next question will come from the line of Brian Nagel with Oppenheimer. Please go ahead. Good afternoon. Thank you for taking my question. So I'm just going to put two questions together, if I could, they're relatively short.

Speaker Change: Our next question will come from the line of Brian Nagel with Oppenheimer. Please go ahead.

Speaker Change: Yeah.

Brian Nagel: Hi, good afternoon. Thank.

Brian Nagel: Thank you for taking my questions.

Speaker Change: So I'm going to put two questions together, if I go there I guess.

Brian Nagel: I mean, first off, with respect to the continued sort of, say, cleanup of the marketplace that you're telegraphing now through the first half of fiscal 26, the question I have is that... assistant with your prior plans, or have you found something new as you've continued to work on the business?

Speaker Change: Relatively small I mean first off with respect to be to continue sourcing cleanup of the marketplace that you're telegraphing now through the first half of fiscal 'twenty six the question I have you Matt.

Speaker Change: Insistent with your prior plans or have you found something new as you've continued to work on.

Speaker Change: The business and then the second question I have with regard to tariffs.

Elliott Hill: Then the second question I have, with regard to character. You know, the way that you described it is to be an impact here in Q1, but then over time, you'll be able to, you know, mitigate that. I think it was a billion dollars you said. Is that just simply saying that it takes time for these mitigation efforts to take hold? Is that why we were expecting this, the Q1 impact? Yeah, Brian. So as it relates to inventory, we remain on track, no change relative to what we communicated 90 days ago, we remain on track for a healthy and clean marketplace by the end of the first half of 26.

Speaker Change: The way you described it distribute impact here in Q1, we can over time youll be able to mitigate that and think there's a $1 billion you said.

Speaker Change: Is that just is that just simply saying.

Speaker Change: It takes time for these mitigation efforts to take hold is that what we were expecting just the coupon.

Speaker Change: Thanks.

Brian: Yes, Brian so as it relates to inventory.

Speaker Change: We remain on track no change relative to what we communicated 90 days ago, we remain on track for a healthy and clean marketplace by the end of the first half of 'twenty six and.

Elliott Hill: And, and, you know, as I highlighted, North America and EMEA have made more progress. We've made significant progress managing down our classic footwear franchises, as I highlighted. And so all I'm trying to say is that we are, we will continue to be liquidating that extra inventory. But it's consistent with the plan that we had before. The quality of the inventory in the marketplace has improved relative to where we were 90 days ago. And just to reiterate something I said to Matt, the fact that our holiday order book is up, I think in wholesale also shows that that the channel is getting clean and our partners are investing behind the newness that we're bringing into the market.

Speaker Change: And as I highlighted North America, and EMEA have made more progress.

Speaker Change: <unk>.

Speaker Change: We've made significant progress managing down our classics footwear franchises as I highlighted and so.

Speaker Change: All I'm trying to say is that we are we will continue to be liquidating that extra inventory.

Speaker Change: But it's consistent with the plan that we had before.

Speaker Change: The quality of the inventory in the marketplace has improved relative to where we were 90 days ago and just to reiterate something I said in that the fact that our holiday order book is up I think in wholesale also shows that that the channel is getting clean and our partners are investing behind the newness that we're bringing into the market.

Elliott Hill: As far as your second question goes on tariffs, yeah, I think you summarized it well. Larger impact in the first quarter primarily because as I laid out the four different actions that we're going to take to offset the billion-dollar headwind, we're implementing those at different points in time throughout the fiscal year based on taking into consideration the consumer, the back-to-school holiday season, the conversations we're having with both our suppliers and our retail partners. And so we're confident in our ability to fully mitigate these over time as these actions that we're talking about are fully implemented and annualized.

Speaker Change: As far as your second question goes on tariffs.

Speaker Change: Yeah, I think you've summarized it well larger impact in the first quarter, primarily because as I laid out four different actions that we're going to take to offset the $1 billion headwind, we're implementing those at different points in time throughout the fiscal year based on taking into.

Speaker Change: Into consideration to consumer the back to back to school holiday season the.

Speaker Change: The conversations we're having with both our suppliers and our retail partners and so we're.

Speaker Change: Sure.

Speaker Change: We're confident in our ability to fully mitigate these over time as these actions that we're talking about are fully implemented and annualized but just within the confines of the fiscal year it'll be a 75 basis point impact on our gross margin.

Elliott Hill: But just within the confines of the fiscal year, it'll be a 75-basis point impact on our growth.

Speaker Change: Yeah.

Lorraine Hutchinson: Our next question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead. Thank you, good afternoon. I wanted to focus on gross margin for a minute. Are you expecting the pressures to abate sequentially as the year progresses? And...

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

Lorraine Hutchinson: Thank you good afternoon I wanted to focus on gross margin Jim for a minute are you expecting the pressures to abate sequentially as the year progresses.

Lorraine Hutchinson: And.

Matt Friend: Can you talk about the back half, if there's an opportunity to return the gross margins? Yeah, Lorraine. Taking all of the comments that we've made into consideration, we do expect our margins to remain under pressure in the first half of 26 as we finish executing our Wind Now Act. We expect that our first half to be impacted from the strategic actions we've outlined, but also the timing of the tariff implementation relative to the actions that we're implementing. But we do expect that to moderate in the second half of the fiscal year.

Lorraine Hutchinson: Can you talk about the back half that there is an opportunity to return the gross margins to grow.

Lorraine Hutchinson: Yes Lorraine.

Lorraine Hutchinson: Taking all of the comments that we've made into consideration we do expect our margins to remain under pressure in the first half of 2006 as we finish executing our window actions.

Lorraine Hutchinson: We expect that.

Lorraine Hutchinson: Our first half to be impacted from the strategic actions, we've outlined but also the timing of the tariff implementation relative to the actions that we're implementing but.

Lorraine Hutchinson: But we do expect.

Lorraine Hutchinson: We do expect that to moderate in the second half of the fiscal year.

Matt Friend: When I think about our 26 margins, I sort of step back and think of three dynamics that we have. One, we've got short-term product and channel mix headwinds that we're going to navigate through the year as we manage our product portfolio and shift our marketplace portfolio towards our wholesale partners. We've got the transitory impact of the win-now actions, which are largely impacting the first half of fiscal 26. And then we've got the newly implemented tariffs. And I said that the 75 basis point impact on the year, it's 100 basis point impact in the first quarter.

Speaker Change: When I think about our 26th margins I sort of step back and think of three dynamics that we have won we've got short term product and channel mix headwinds that we're going to navigate through the year as we manage our product portfolio and shift our marketplace portfolio towards our wholesale partners. We've got the transitory impact of the wind now actions, which are largely.

Lorraine Hutchinson: Impacting the first half of fiscal 'twenty six.

Lorraine Hutchinson: And then we've got the newly implemented tariffs and I said, that's a 75 basis point impact on the year is 100 basis point impact in the first quarter.

Matt Friend: And we expect to see those headwinds begin to moderate.

Lorraine Hutchinson: And we expect to see those headwinds begin to moderate from there.

Lorraine Hutchinson: Okay.

Jonathan Komp: Our next question comes from the line of Jonathan Komp with Baird. Please go ahead.

Speaker Change: Our next question comes from the line of Jonathan Komp with Baird. Please go ahead.

Speaker Change: Yes, hi, good afternoon. Thank you I wanted to follow up it is obviously too many dynamics to think about guiding past Q1, but just given that wholesale is the largest driver of your business today and you are seeing.

Speaker Change: Flexion in order growth are there any scenarios, where you could get back to.

Speaker Change: Total growth at any point I Miss here, just just trying to get a sense of how youre looking.

Speaker Change: Out on the horizon here.

Elliott Hill: I'll take that, Jonathan. Let me start with, you know, what I would start with is I've been here now eight months, and I'm even more convinced that the path back to sustainable, profitable growth is through our Win Now actions and now implementing our sport offense. We're seeing signals that the actions are working. Our teams are energized, inspired, and competing. The actions are resonating with our partners. Matt already touched on the order book and the reaction we're getting from our partners, and it's with our consumers. We're having a good sell-through as well. We've walked through some signals.

Speaker Change: Ill take that Jonathan Let me, let me start with.

Speaker Change: What I would start with is I've been here now eight months I'm, even more convinced that the path back to sustainable profitable growth is through our win now actions and now implementing our sport offense, we're seeing signals that the actions are working.

Speaker Change: Our teams are energized and inspired and competing.

Speaker Change: The actions are resonating with our partners, Matt already touched on the order book.

Speaker Change: And the reaction, we're getting from our partners and it's with our consumers were having good sell through as well.

Speaker Change: We've walked through some signals inventory actions.

Elliott Hill: Inventory actions are back on track. We're elevating Nike Digital, the user experience, less promotional, et cetera. We're having a good brand impact during sport moments and product launches. The product pipeline, which I already hit on, we're feeling good about that, and it gets better with each season, and we're having improvement in our order book. So overall, what I would tell you is that each G.O. is in a bit different stage of executing those actions. North America and EMEA began executing them the earliest, and they are demonstrating the clearest progress, and Matt hit on some of those financials.

Speaker Change: We are back on track.

Speaker Change: Elevating Nike digital.

Speaker Change: User experience less promotional et cetera, we're having a good brand impact or in sport moments and product launches the product pipeline, which I already hit on we feel good about that and then it gets better with each season, and we're having an improvement in our order book So.

Speaker Change: Overall, what I would tell you that each geos and a bit different stage.

Speaker Change: Executing those actions.

Speaker Change: North America, and EMEA began executing them the earliest and they are demonstrating the clearest progress and Matt hit on some of those financials, we're making good progress in <unk>. It does Jonathan vary a little bit by country.

Elliott Hill: We're making good progress in APLA. It does, Jonathan, vary a little bit by country. And then in greater China, we're still cleaning up the marketplace with the nuance of it being a monobrand marketplace, but we continue to work closely with the team to drive progress there. So we're seeing momentum. Matt's already hit it in our holiday order book is up, and right now, just because of everything that's going on, we're going to take it 90 days at a time because we believe full recovery will take time.

Speaker Change: Then in greater China were still cleaning up the marketplace with the nuance of it be in a mono brand marketplace, but we continue to work with work closely with the team to driving progress. There. So we're seeing momentum that's already hit it in our holiday order book is up and right now just because of everything that's going on we're going to take at 90.

Speaker Change: Days at a time, because we believe full recovery will take time.

Adrienne Yih: Our next question comes from the line of Adrienne Yih with Barclays. Please go ahead. Great. Thank you very much. It's nice to see the progress at Wholesale. Elliott, I guess I'm going to start on that topic.

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

Adrienne: Great. Thank you very much.

Speaker Change: Nice to see the progress on wholesale.

Speaker Change: Elliot I guess I'm going to start on that topic can you talk about the marketplace. That's at a high level.

Adrienne Yih: Can you talk about the marketplace at a high level, kind of where DKS, Foot Locker, JD kind of sit in that specialty retail and then the segmentation with the newly added Amazon expansion of distribution? And then along the same lines, when did you start shipping or recognizing Wholesale revenue? I know you're going to be on board there in late July. So just wondering how that revenue, is that part of the revenue Wholesale order book being kind of having more visibility as we go into the back half of the addition of Amazon? Thank you very much.

Speaker Change: Kind of where dk at foot locker JD kind of thing.

Speaker Change: That specialty retail and then the segmentation with the newly added Amazon expansion of distribution.

Speaker Change: And then along the same line when did you start shipping.

Speaker Change: Ah recognizing wholesale revenue I know you are going to be onboard there in late July.

Speaker Change: I guess I'm wondering how that revenue is that part.

Speaker Change: Revenue wholesale.

Speaker Change: Order book being kind of having more visibility as we go into the back half mediation with Amazon. Thank you very much okay.

Elliott Hill: Okay, Adrienne, our biggest competitive advantage is our ability to elevate and grow an entire marketplace. And again, we are challenging our teams to make certain that we're serving consumers wherever and however they choose to shop for our brands. I will say this, we do have an unbeatable footprint, 40,000 points of distribution, nearly 190 countries, digital, physical, wholesale, and direct. What we are doing, we are making certain we are moving across multiple channels. Our own Nike Direct channels, specialty, sporting goods, athletic specialty, department store, family footwear. As you know, each one of those channels and the partners that sit in each of those channels, they all serve different consumers.

Speaker Change: Adrian what are our biggest competitive advantage is our ability to elevate and grow an entire marketplace.

Speaker Change: Again.

Speaker Change: We are challenging our teams to make certain that we're serving consumers wherever and however, they choose to shop for our brands.

Speaker Change: I will say this we do have an unbeatable footprint 40000 points of distribution nearly a 190 countries digital physical wholesale and direct what we are doing we are making certain we're moving.

Speaker Change: Moving across multiple channels, our own Nike direct channels specialty sporting goods Athletic specialty Department store family footwear as you know each one of those channels and the and the partners that sit in each of those channels. They all serve different consumers and so with this new flow of it.

Matt Friend: And so we, with this new flow of innovative product, we're segmenting and we're differentiating the marketplace. When we do that across wholesale partners to serve different consumers, that's how we drive growth and profitability. And again, it does start with our own Nike Direct and elevating that, making it less promotional, but we are working closely with our partners across the entire marketplace, our three-year growth plans, translating that into annual plans and quarterly plans. And we continue to invest in elevating the presentation of our assortment. So I'm feeling good about where, how the teams now are embracing, looking across the entire marketplace to serve different consumers at different points of distribution.

Speaker Change: <unk> product, we're segmenting and we're differentiating the marketplace when we do that across wholesale partners to serve different consumers. That's how we drive growth and profitability and again it does start with our own Nike direct and elevating that making it less promotional.

Speaker Change: But we are working closely with.

Speaker Change: Our partners across the entire marketplace, our three year growth plans translating that into <unk>.

Speaker Change: Annual plans and quarterly plant plans and we continue to invest in elevating the presentation of our assortment. So im feeling good about where the.

Speaker Change: How the teams now are embracing looking across the entire marketplace to serve different consumers at different points of distribution.

Matt Friend: In terms of Amazon... They serve a very focused consumer, and we're using them as part of and partnering with them as part of to grow the overall integrated marketplace, and we're excited about the partnership. You heard it in my script. We're working on the right assortments that will go in there. We'll have a featured brand store on the platform. We'll be offering footwear, apparel, and accessories through running, training, basketball, and And I would just add, Adrienne, that, you know, as Elliott said, as we're serving consumers across of the examples that he gave in terms of how we've expanded distribution.

Speaker Change: In terms of Amazon.

Speaker Change: They serve.

Speaker Change: Three focused consumer and.

Speaker Change: We're using them as part of and partnering with them as part of the grow the overall integrated marketplace and we're excited about the partnership you heard it in my script, we're working on the right Assortments that will go in there we'll have a.

Speaker Change: Featured brand store on the platform will be offering footwear apparel and accessories through running training and basketball and sportswear.

Speaker Change: And I would just add Adrian that as Elliot said as we're serving consumers across them.

Speaker Change: One of the examples that he gave in terms of how we've expanded distribution.

Matt Friend: We typically start small, so, you know, we will go live on Amazon in Q1, but it's not a material needle mover. What I would say is that wholesale overall and the commentary around our order book, I think, is an important leading indicator of the progress our teams are making. transition our product portfolio and also get our business back to growth.

Speaker Change: We typically start small so we will go live on Amazon in Q1.

Speaker Change: It's not.

Speaker Change: A material needle mover.

Speaker Change: What I would say is is that wholesale overall and the commentary around our order book I think is an important leading indicator of the progress our teams are making to transition our product portfolio and also.

Speaker Change: Get get our get our business back to growth, there's obviously going to be some non comp items like I've highlighted the liquidation in the first half the work we're doing in order to.

Jay Sole: There's obviously going to be some non-comp items, like I've highlighted the liquidation in the first half, the work we're doing in order to continue to work through our classic footwear franchises, but wholesale and the progress that we're making in wholesale I think is a Our next question comes from the line of Jay Sole with UBS. Please go ahead. Great, thank you so much. Matt, you just talked about a modest headwind to the second half of 26 revenues as your lab promotions.

Speaker Change: To continue to work through.

Speaker Change: Our classics footwear franchises.

Speaker Change: But wholesale and.

Speaker Change: And the progress that we're making in wholesale I think is a strong indicator of the progress we're making in our window actions.

Speaker Change: Our next question comes from the line of Jay sole with UBS. Please go ahead.

Jay Sole: Great. Thank you. So much. Thank you just talked about a modest headwinds in the second half of 2000 students revenues as Youre. My promotions can you just talk about maybe what modest means you can talk about the trade off between boosting gross margins as you get back to full price selling of milestones promotions versus what it means for unit volumes as you try to run a more full price business. Thank you.

Matt Friend: Can you just talk about maybe what modest means and talk about the trade-off between boosting gross margin as you get back to full-price selling lab sales promotions versus what it means for unit volumes as you try to, you know, run a more full-price business? Thank you. Sure, Jay. What I was specifically referring to there is, you know, we started our Wind Now actions as Elliott came back eight months ago. And we highlighted them on our Q2 call and it set us on an accelerated path to change the trajectory that the company And one of the things that that required us to do was to move quickly to shift our product portfolio and address some of the aged inventory that was sitting in the market.

Speaker Change: Sure Jay what I was specifically referring to there as we started our window actions as Elliot came back eight months ago.

Speaker Change: And we highlighted them on our Q2 call and it set us on an accelerated path.

Speaker Change: To change the trajectory that the company is on.

Speaker Change: And one of the things that that required us to do is to move quickly to shift our product portfolio and address some of the aged inventory that was sitting in the marketplace and so we started to move more aggressively with that through our sales related returns through.

Matt Friend: So we started to move more aggressively with that, through sales-related returns, through more discounts to our retail partners so that they could mark down that inventory and move it through, and as well as selling off-price product to our value partners. When we get into the second half of fiscal year 26, we expect to be in a clean marketplace and healthy And so that business in the second half will be more full price. it will be more profitable. But there will be a revenue headwind from the Komp pair to the higher level of off-price liquidation in the price.

Speaker Change: More discounts to our retail partners, so that they could mark down that inventory and move it through.

Speaker Change: And as well as selling off priced product to our to our.

Speaker Change: Our value partners when we get into the second half of fiscal year 'twenty six we expect to be in a clean marketplace and healthy marketplace.

Speaker Change: So.

Speaker Change: That business in the second half will be more full price.

Speaker Change: It will be more profitable.

Speaker Change: But there will be a revenue headwind from the compare to the higher level of off price liquidation in the prior year.

Speaker Change: Okay.

Brooke Roach: Our next question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead. Good afternoon.

Brett Roche: Our next question comes from the line of Brett Roche with Goldman Sachs. Please go ahead.

Brett Roche: Good afternoon, and thank you for taking my question.

Brooke Roach: Elliott, I'm curious on your thoughts on the China market. Smith. Thank you. Characteristics of the Marketplace that are making it a little bit more difficult to clean it up. Shios. Can you talk about the timeline in a... over the course of the next fiscal year. Gross, and how are you thinking about the competitive and operating environment for the brand? Thanks, Brooke. Let me start with making certain that you hear this, that we do believe in the long term opportunity in China. There are some structural tailwinds which will continue to unlock further opportunity. And I think our biggest opportunity is from a brand perspective to inspire and invite the 1.3 billion consumers into the world of sport, the lifestyle of sport and into fitness.

Speaker Change: Curious on your thoughts on the China marketplace, and the opportunity to drive full recovery there over time understand that theres. Some unique characteristics of the marketplace that are making it a little bit more difficult to clean it up as quickly as the other geos can you talk about the timeline and the cadence of what we should see over the course of the next fiscal year as you look to return that to.

Speaker Change: And how are you thinking about the competitive operating environment for the brand in there today. Thank you.

Speaker Change: Yeah.

Speaker Change: Thanks Brooks.

Speaker Change: Let me start with they can certainly you hear this that we do believe in the long term opportunity in China.

Speaker Change: There are some structural tailwind, which will continue to unlock.

Speaker Change: Further opportunity.

Speaker Change: And I think our biggest opportunities from a brand perspective to inspire and invite the one 3 billion consumers into the world of sport lifestyle sport and.

Speaker Change: Fitness.

Elliott Hill: That said, we're not happy with where we are. And Matt went through the results. They are in line with what we plan. I want to make sure you guys hear that as well. We're confident in the win now actions. But as you've already pointed out, Brooke, China is on a bit of a different timeline. And part of it is because of the structural differences in the marketplace. It's monobrand. The good news is we've been operating in China for more than 40 years. We have deep relationships there. Matt and I have both been involved in turnarounds in China.

Speaker Change: That said, we're not happy with where we are and Matt went through the results. They are in line with what we planned I want to make sure you guys hear that as well.

Speaker Change: We're confident in the win now actions, but as you've already pointed out broke China is on a bit of a different timeline and part of it is because of the structural differences in the marketplace. It's mono brand.

Speaker Change: The good news is we've been operating in China for for more than 40 years, we have deep relationships there.

Speaker Change: Matt and I, both been involved in turnarounds in China, and we're working closely with the team there.

Elliott Hill: And we're working closely with the team there. The team's focused on taking the right actions to clean up the marketplace, similar to what you've already seen in North America and EMEA. And now it's taking place in APLA, cleaning up the big three, elevating digital. The key here is we're investing in testing some new retail concepts. At the same time, we are resetting and elevate and resetting some of our consumer-led concepts and existing doors, but we have work to do. The key to winning, and I am confident saying the key to winning, is that we need to connect locally.

Speaker Change: The team's focus on taking the right actions to clean up the marketplace similar to what you've already seen in North America EMEA and now has taken place in <unk> cleaned up the big three elevating digital.

Speaker Change: The key here is we're investing and testing some new retail concepts.

Speaker Change: At the same time, we are resetting and elevated.

Speaker Change: Resetting some of our consumer led concepts in existing doors, but we have work to do.

Speaker Change: The key to winning.

Speaker Change: And I am confidence and the key to winning is that we need to connect locally.

Elliott Hill: We've got to elevate the consumer-led product concepts. The performance running we touched on is working there, but we also have some China-specific product through Outdoor Basketball, the ST Flair, and then we're leveraging our GeoExpress lane to create China-specific product. And you will see more of that from us as we move forward. And then it is getting the right consumer-led retail concepts in place. We've got a plan around renovating and upgrading throughout 26, launching new concepts, and getting the right assortments, consumer-right assortments, and the right depth, presentation, and storytelling. That's how you return to, you know, you drive revenue and profits there.

Speaker Change: We've got to elevate the consumer led product concepts.

Speaker Change: <unk>, we touched on is working there, but we also have some China specific product through outdoor basketball.

Speaker Change: Flare and there we're leveraging our Geo Express lane to create China specific product and you will see more of that from us as we move forward.

Speaker Change: And then it is getting the right consumer led retail concepts in place we've got a plan around renovating and upgrading throughout 'twenty six launching new concepts and getting the right Assortments consumer right Assortments in the right depth presentation and storytelling that is how you return to.

Speaker Change: Drive revenue and profits there its drive is through driving productivity.

Elliott Hill: It's through driving productivity. And so we're doing it. The team's hustling, but here's what I'd say. The changes are going to take time, but we're focused on pulling the right levers to return to growth.

Speaker Change: And so we're doing it the team's hustling, but here's what I would say the changes are going to take time.

Speaker Change: But we're focused on pulling the right levers to return to growth.

Alex Straton: Our final question will come from the line of Alex Straton with Morgan Stanley.

Speaker Change: Our final question will come from the line of Alex Straightened with Morgan Stanley. Please go ahead.

Alex Straton: Please go ahead. Perfect. Thanks so much.

Alex Straightened: Perfect. Thanks, so much maybe for Eliot or Matt as you think about kind of once the smoke clears due this year.

Elliott Hill: Maybe for Elliot or Matt, as you think about kind of once the smoke clears through this year, just structurally, is there any reason why this business like should not be a double digit margin business? Or maybe just high level? Can you walk us through perhaps what's changed? And like, if you think about clearing these actions, and those all getting behind you, if anything's really changed, and in like the structural margin of the business longer term? Well, Alex, we've consistently been a double-digit margin company over our history, regardless of the size of our business or the composition of our portfolio.

Speaker Change: Structurally is there any reason why that business should not be a double digit margin business.

Speaker Change: Or maybe just high level can you walk us through perhaps what's changed and like how do you think about clearing these atkins and those are all getting behind you. If anything has really changed in and like the structural margin of the business longer term.

Alex Straightened: Well Alex.

Speaker Change: We've consistently been a double digit margin company over our history, regardless of the size of our business or the composition of our portfolio and so I think we believe that that is still.

Elliott Hill: And so I think we believe that that is still, you know, a goal that's worthy of pursuing. I highlighted the actions that we've got, that we've taken in 26 associated with WinNow and the timing of them between the first half and the second half. And, you know, we believe that now actions are the right actions to reposition Nike as a full price brand in a healthy pull market. And they're the right actions to reignite brand momentum and And so when I think about when I think about the longer term, you know, our goal is to return to sustainable organic revenue growth.

Speaker Change:

Speaker Change: Our goal that's worthy of pursuing.

Speaker Change: I highlighted the actions that we've got that we've taken in 2006 associated with win now and the timing of them between the first half in the second half.

Speaker Change: And we believe that we now actions are the right actions to reposition Nike is a full priced brand and a healthy pull market.

Speaker Change: And they are the right actions to reignite brand momentum and growth.

Speaker Change: And so when I think about.

Speaker Change: When I think about the longer term.

Speaker Change: Our goal is to return to sustainable organic revenue growth.

Elliott Hill: and to see the recovery of these transitory impacts that we've been talking about as we've been repositioning the business. And, and with disciplined expense management, we should it should yield operating leverage as we were So that's where we're at.

Speaker Change: And to see the recovery of these transitory impacts that we've been talking about as we've been repositioning the business.

Speaker Change: And with disciplined expense management, we should it should yield operating leverage as we return to growth and so that's where we're focused I think I think the only thing that.

Elliott Hill: I think I think the only thing that I would add to it is our team. Leadership team and teams around the world have embraced the win now action. We believe by lining up against the sport offense, that will further accelerate those actions. And over time, we absolutely have the ambition to get back to double-digit operating margins.

Speaker Change: I would add to it is our team's.

Speaker Change: Our leadership team and teams around the world have embraced the win now actions.

Speaker Change: We believe by lining up against this Ford offense that will further accelerate those actions and over time, we absolutely have the ambition to get back to double digit operating margins.

Speaker Change: Okay.

Operator: Thank you. And that will conclude our question and answer session and our call today. Thank you all for joining. You may now disconnect.

Speaker Change: Thank you.

Speaker Change: And that will conclude our question and answer session and our call today. Thank you all for joining you may now disconnect.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.