Nike, Inc.

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

Thank you, Operator. Hello, everyone, and thank you for joining us today to discuss Nike Inc.' 's Fiscal 2024 Fourth Quarter results. Joining us on today's call will be Nike Inc. President and CEO, John Donahoe, and our CFO, Matt Friend. Before we begin, let me remind you that participants on this call will make forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in Nike's reports filed with the SEC. In addition, participants may discuss non-gap 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 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. I want to start by briefly commenting on our financial results. For full year of fiscal 24, revenue grew revenue grew approximately 1% on a currency neutral basis and earnings per share grew 15%. Q4 revenue was flat. For the quarter, we saw strong gains within performance product. However, this was more than offset by declines in lifestyle. These declines had a pronounced impact on our digital results. These factors, when combined with increased macro uncertainty and worsening foreign exchange, have caused us to reduce our guidance for fiscal 25. Matt will provide more detail on our results and outlook later in the call. While fiscal 25 will be a transition year for our business, we continue to make real progress on our comeback. Over the past year, we've highlighted the strategic shifts we're taking as a company, including leadership and organization changes, kick-starting a multi-year innovation cycle, and creating capacity to invest in consumer-facing activities. As I mentioned in last quarter's call, we're making a series of adjustments to position us to compete and win. We're sharpening our focus on sport, accelerating our pace and scaling of newness and innovation, driving bigger, bolder storytelling, and elevating the entire marketplace to fuel brand distinction and be in the path of the consumer. This is our playbook and we're seeing momentum build in all four areas, particularly on the performance side of our product portfolio. We have work to do, but we're on it. Our teams are moving with energy and urgency against the opportunity we see in front of us. Now, as we've discussed over the past few quarters, We've been accelerating our innovation pipeline, including pulling forward several innovations, some more than a year. We're moving aggressively to reestablish our innovation edge. We began with a focus on performance, as Nike always does. And the early results from newness and innovation are encouraging. Performance grew double digits in the quarter, with growth in many of our key sports. And as we kicked off our multi-year innovation cycle, one of our key priorities has been increasing our speed to the consumer. We believe accelerating the pace and consistency of our innovation will allow us to deliver impact at scale season after season. Now, as you know, for years, Nike has had an express lane, which enables short lead time replenishment and hyper local design. And we'll continue to leverage ExpressLane. But over the past year, we have also built a new way of working across the entire product creation process. We call this SpeedLane, and it's part of a broader company-wide effort to move faster and be more responsive to the consumer. For example, through SpeedLane, we're leveraging our Bowerman footwear lab to accelerate design. We're leveraging advanced digital tools to quicken development. And we're leveraging key manufacturing partners to speed up product testing and production. We've already accelerated a half a dozen models for this new capability. And in the second half of the fiscal year, you'll see other new innovations come out of Speedlane, including several exciting new franchises across fitness and lifestyle. As I've mentioned, Our sharp focus around newness and innovation starts with performance, and we're seeing the impact across key sports. Let me give you a few brief examples across three, basketball, fitness, and running. First, basketball, which was up double-digit growth in Q4 across men's, women's, kids, and Jordan. This was driven by new innovation from the GT Cut to Kobe's new footwear and apparel to the Sabrina One which in itself has taken two points of share across the entire U.S. basketball market, including both men's and women's. We recently announced Sabrina's next shoe, as well as Asia Wilson's signature franchise. And we announced the signing of Caitlin Clark to a roster of athletes that was already the game's best. All this energy will continue to fuel the rapid growth of our women's basketball business. as excitement around the WNBA soars to historic highs amidst an expanding fan base. And of course, this month's Jason vs. Luka NBA Finals matchup marked the first time Jordan's signature athletes met on basketball's pinnacle stage. We celebrated Jason's title with one of the Jordan brand's biggest marketing efforts ever. Next, let's look at our fitness business. Fitness represents one of the largest market share opportunities we see as a company, particularly for our female consumer. We've made intentional decisions to make meaningful investments in fitness, and these actions are paying off. Over the past quarter, we saw broad-based growth for fitness, led by double-digit growth in apparel. For example, statement leggings, which is a key focus for us, were up high double digits in Q4. led by innovations we've introduced over the past few quarters with Universa, Zenvi, and Go. Women's fitness footwear also had a strong quarter, driven by Motiva and the latest version of Free Metcon, which came out last summer. Free Metcon is now Nike's number one women's fitness shoe, having expanded from the gym to the street. Next, let's look at road running. which remains a competitive battlefield, but we are playing to win. In past calls, we've discussed that we're now aligned, resourced, and taking this challenge head on with confidence. We've been hustling to accelerate our running innovations and amplify our ground game. While our overall running business was impacted in Q4 by our proactive actions to manage the Pegasus portfolio transition, We're pleased that recent new releases in Vomero, Invincible, Infinity, and Structure all grew high double digits over the quarter. We're making it easier for consumers to discover these styles by simplifying our running construct at retail as we highlight our best-in-class cushioning technologies. Now, as you know, a few weeks ago, we launched the Pegasus 41, a new chapter for Nike's biggest performance franchise. Peg 41 pairs Zoom Air with full length ReactX foam for a ride that's more comfortable, durable, and responsive than ever. It's received strong reviews from industry experts. We supported the 41 with our full playbook, backed by Nike's most comprehensive running campaign in years, which will last for several seasons. It was also fueled by a refreshed ground game. This included neighborhood activations to drive consumer trialing at scale and building energy across the full marketplace, including Nike Direct, our strategic partners, and our performance authenticators, such as running specialty doors. This energy drove PEG 41 to a strong start, led by better than expected sell-through in both wholesale and Nike Direct. And our full running journey for fiscal 25 goes beyond the PEG 41 launch. We'll be adding several dimensions for PEG in holiday before introducing additional exciting innovations in the second half of the year, including Pegasus Premium and Bromero 18. We're already seeing strong wholesale order book for running across the next few seasons as we continue to take meaningful strides to assert our leadership in this key sport. Now let's talk about lifestyle, where we're focused on building a more diversified lifestyle footwear portfolio to complement the industry's three largest franchises. We're excited about our pipeline of new lifestyle products. A key example was last quarter's introduction of Dynamic Air, our newest breakthrough innovation platform. We launched the Air Max DN globally, and within just a few months, DN has become a top 10 lifestyle franchise and our men's business and is resonating particularly well with sneaker engaged consumers in major cities. And importantly, Dynamic Air is an innovation platform. We're already working on the next two iterations of Dynamic Air, and we will continue to innovate on this platform, including customizing air cushioning to create unique consumer benefits. Another component of fueling a more diversified lifestyle portfolio is taking advantage of Nike's unmatched vault. One example is retro running. We saw an opportunity in the marketplace for retro and moved quickly and nimbly to fill it with our Y2K portfolio. And consumers are responding. We experienced significant quarter-over-quarter retail sales growth for Y2K, and now expect to nearly triple our retro running business by the end of fiscal 25 compared with the start of fiscal 24. Now, while we are growing new lifestyle offerings, we're also accelerating planned reductions for our three largest franchises. And this will have a meaningful impact near term on our overall lifestyle growth rate. Now, while we have work to do, we are very focused on scaling the newness to offset this planned reduction. And we're excited about the pipeline with exciting footwear concepts coming in the second half of fiscal 25. Finally, the Paris Olympics offers us a pinnacle moment to communicate our vision of sport to the world. This is led by breakthrough innovation, and announced by a brand campaign that you won't be able to miss. We recently unveiled our Air for Athletes innovation at our Nike On Air event in Paris. And we can't wait to bring all this Olympics product to life across the games and in more than 8,000 doors worldwide. And throughout, our brand storytelling will be bold and clear, with sport and athletes at the very center of it all, from brand voice to retail activations. This summer, we will cut through the clutter to create powerful energy for the Nike brand. We're back doing what we do best, creating impactful storytelling and ultimately brand distinction in sport. In the end, we're taking our challenges head on and we're regaining our edge. Thanks to the heart and hustle of our global team, we're aggressively asserting the future of Nike. With passion, clarity, and grit, we're driving this business forward. We're excited about the opportunity in front of us, and we're eager to prove what Nike can do. And with that, I'll turn the call over to Matt.