Nike, Inc.

Good afternoon, everyone. Welcome to Nike Inc.' 's fiscal 2024 third quarter conference call. For those who want to reference today's press release, you'll find it at investors.nike.com. Leading today's call is Paul Trussell, VP of Corporate Finance and Treasurer. I would now like to turn the call over to Paul Trussell.

Thank you, operator. Hello, everyone, and thank you for joining us today to discuss Nike Inc.' 's fiscal 2024 third quarter results. Joining us on today's call will be Nike Inc. President and CEO John Donahoe and our CFO Matt Frim. 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 GAAP measures and quantitative reconciliations. All growth comparisons on the call today are presented on a year-over-year basis and are currency neutral unless otherwise noted. We will start with prepared remarks. and then open up for questions. We would like to allow as many of you to ask questions as possible in our allotted time. So we would appreciate you limiting your initial question to one. Thanks for your cooperation on this. I'll now turn the call over to Nike Inc. President and CEO, John Donahoe.

Thank you, Paul, and hello to everyone on today's call. Before I get into our Q3 performance, I want to take a moment to acknowledge the tragic passing of Kelvin Kipdom last month. Kelvin had just set the marathon world record in Chicago. He was a world-class athlete and champion and a beloved member of the Nike family. Kelvin was an inspiration to so many of us and he'll long be remembered and honored for the impact he had both on the running community and beyond. Looking at our business, Q3 performed in line with our expectations. That said, we know Nike is not performing at our potential. While our consumer direct acceleration strategy has driven growth and direct connections with consumers, it's been clear that we need to make some important adjustments. Simply put, we need to make adjustments in four areas. We need to sharpen our focus on sport. We must drive a continuous flow of new product innovation. Our brand marketing must become bolder and more distinctive. And while Nike Direct will continue to play a critical role, we must lean in with our wholesale partners to elevate our brand and grow the total marketplace. And this is exactly what we're doing. Starting last June, we aligned our organization to put the consumer and a sharp focus on sport back at the center of everything we do. We integrated our leadership structure, appointing Heidi O'Neill and Craig Williams as co-presidents. We've reinvested in consumer-led, sport-focused teams that are the foundation of our offense. And we're driving our winning formula of creating a relentless flow of innovative product combined with distinct brand storytelling delivered through differentiated marketplace experiences. And while we still have much work to do, we are making significant progress. We're well on our way to building a multi-year cycle of innovation that's bringing freshness and newness to consumers. We've pulled forward several innovations more than a year, and our intent is to delight consumers and disrupt the industry. Our brand storytelling will leverage our athletes and sport moments to become sharper and bolder beginning with the Olympics this summer. And we're increasing our investment in wholesale to help us elevate and grow the entire marketplace. We recognize that our wholesale partners help us scale our innovation and newness in physical stores and connect our brands in the path of the consumer. Most importantly, we're back on our front foot with growing confidence in our innovation pipelines. We know it'll take some time to scale these innovations, but we see some early green shoots. And we're also carefully managing our most important franchises for the long-term health. And as a result, our product portfolio will go through a period of transition over the coming quarters. But altogether, we are relentlessly focused on driving Nike's next chapter of healthy and sustainable growth. And we look forward to sharing our plans in depth at an investor day later this year. Now, as we said before, our success always starts with innovative product. And so that's where I'm going to focus on today's call. Today, our innovation engine is moving with speed. Our innovation design and product creation teams are working hand in hand with urgency and creativity. They're leveraging new technologies to be faster, more collaborative, and more expansive in their thinking. We have many platforms at Nike that drive growth. But today, let's go deep on our greatest innovation platform and a true source of competitive advantage, AIR. Today, as a platform, AIR is a double-digit billion-dollar business on its own, larger than some Fortune 500 companies. There's nothing like AIR. It's a proprietary technology that lets us iterate and revolutionize. It drives breakthrough performance benefits for athletes and defines the future of sportswear. AIR offers stability, resilience, and energy return unlike any other cushioning platform. Simply put, AIR helps athletes win. Decade after decade, we've developed new breakthroughs in AIR. And as we approach the Olympics in Paris this summer, we continue to innovate with AIR with a focus on helping the world's greatest athletes compete and win on sport's largest stage. And so this summer, you're going to see AIR drive major advancements in measurable performance benefits on the track, on the court, and on the pitch. In addition to Alpha Fly 3, which continues to set the standard for distance racing, you'll see air in new footwear that brings elite performance to everyday runners. You'll see air in football and basketball footwear in new and more visible ways. And you'll see air in the fastest track spikes we've ever created. You're going to get a chance to see all of these products, in fact, our full Olympics innovation lineup two weeks from now at our Innovation Ignition events that we'll be hosting in Paris. Now, beyond creating leading-edge performance innovation, we also continue to bring new sensations of AIR across our business, including our lifestyle portfolio. For instance, Dynamic AIR Our newest innovation platform is a true breakthrough, delivering a uniquely comfortable sensation with each step. It's a total rethinking of what airbags can be. Historically, airbags have been fixed and static, pictured inflatable raft. They compress when you step and then immediately return to their original shape, ready for the next step. Dynamic air changes the game. It unchambers the air to create a new underfoot sensation that's truly responsive. As the consumer takes a step, our new four-tubed air unit allows air to flow freely between the tubes, responding to the pressure of each unique stride to deliver maximum comfort. We will scale Dynamic Air across many of our leading air franchises, but it starts with the AirMax DN. A shoe that offers just the latest example of how we're using air to craft a new lifestyle franchise. I've been wearing the DN all week. And in fact, I'm wearing it right now. And it really is a unique and great sensation. And what's more, DN's bold style and design identity is deeply rooted in youth culture and the next generation. We're excited for consumers to experience it. And next week will be Nike's 10th Air Max Day. It'll be a day when you see us drive an integrated offense of innovation, storytelling, and consumer activations that we're very excited about. Air Max DM will be debuting in more than 4,000 stores globally on Air Max Day, creating impact like we haven't seen in years. When we teased DM last month, we saw a rise in other Air Max franchises. This is common. Our experience has been that when we launch a strong new product, it creates energy for the whole family. It all speaks to the confidence we feel when we look at our overall innovation engine and pipeline from AIR to the rest of the portfolio. Now, earlier I mentioned the impact Nike can have as we sharpen our focus on sport. And the world got a great reminder of that today with the announcement of the awarding of the German football contract. I was fortunate enough to be in Germany for our pitch earlier this week, and I can tell you it was simply Nike at its very best. It started with our deep and unparalleled commitment to sport. We are the world's leading sports brand, the largest sports brand, the leader in football, the world's most popular sport. Our focus started with product innovation, both on the pitch with unmatched kits and footwear that popped and had style and performance and extended into distinct and fashionable lifestyle design. Our ability to tell stories shown through, to make the German team a global brand and make their athletes global heroes. and our ability to expand the game, expanding the women's football game and inviting youth culture into football all mattered. It was a remarkable team effort and a great proof point that when Nike brings out our best, no one can beat us. And so we feel deeply honored and privileged to partner with the German Football Federation starting in 2027. Before wrapping up, let me touch on something else that's core to our DNA as a company, Nike's purpose. Purpose will always be our foundation and remains deeply embedded in our strategy. We're defined by our commitment to the future of sport and service to athletes around the globe. And purpose continues to guide us and redefine our own potential for positive impact in the world. We're pleased with the progress we've made against our 2025 purpose targets across representation, sustainability, and community. To learn more, please see our recently released FY23 Nike Inc. Impact Report. In the end, we're acting with urgency as we make the adjustments needed to compete and win. And I'd like to conclude by saying that I deeply appreciate how much our team has kept our focus on delivering results amid macro volatility and an organizational restructure. This has been a difficult time for our organization, and I feel truly grateful for our teammates who've dedicated and demonstrated such dedication and commitment to our work together. It's thanks to them that I feel so confident in Nike's future. And with that, I'll turn the call over to Matt.