NIKE : Q4FY22 EARNINGS CALL OFFICIAL TRANSCRIPT

FY 2022 Q4 Earnings Release Conference Call Transcript

June 27, 2022

This transcript is provided by NIKE, Inc. only for reference purposes. Information presented was current only as of the date of the conference call and may have subsequently changed materially. NIKE, Inc. does not update or delete outdated information contained in this transcript and disclaims any obligation to do so.

PRESENTATION

[Operator]

Good afternoon, everyone. Welcome to NIKE, Inc.'s fiscal 2022 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 Investor Relations and Strategic Finance. Before I turn the call over to Mr. Trussell, 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 the reports filed with the SEC including the annual report filed on Form 10-K.

Some forward-looking statements may concern expectations of future revenue growth or gross margin. In addition, participants may discuss non-GAAP financial measures, including references to constant-dollar revenue. References to constant-dollar revenue are intended to provide context as to the performance of the business eliminating foreign exchange fluctuations. Participants may also make references to other non- public financial and statistical information and non-GAAP financial measures. To the extent non-public financial and statistical information is discussed, presentations of comparable GAAP measures and quantitative reconciliations will be made available at NIKE's website, investors.nike.com.

Now I would like to turn the call over to Paul Trussell.

[Paul Trussell]

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Thank you, operator.

Hello everyone and thank you for joining us today to discuss NIKE, Inc.'s fiscal 2022 fourth quarter results.

As the operator indicated, participants on today's call may discuss non-GAAP financial measures. You will find the appropriate reconciliations in our press release, which was issued about an hour ago, or at our website: investors.nike.com.

Joining us on today's call will be NIKE, Inc. President and CEO John Donahoe, and our Chief Financial Officer, Matt Friend.

Following their prepared remarks, we will take your 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.

[John Donahoe]

Thank you, Paul, and hello to everyone on today's call.

This quarter Nike celebrated our 50th anniversary. On May 1, 1972, Nike became its own company, a new standalone brand with its own mission and vision. As Phil Knight put it recently, back then all we had was a dream, a ton of ambition, a trunk full of shoes and a big Swoosh on all of them.

Over the 50 years since, Nike has been a growth company. For five decades now, we have innovated for athletes, redefining sport for generation after generation.

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Today, we are the biggest champion in the world for athletes and for sport. We have inspired a global community and remain driven by the power of sport to create a better world.

This spring, we've been celebrating our 50th anniversary across the globe. And these moments have been particularly special, as many of us have now returned to our workplaces. It's been great to see the collaboration and creativity, as we strengthen our culture of innovation, team, and community. I have personally loved feeling the energy of our teammates being back together again.

In fact, I got to feel that energy, not just on our campus here in Oregon, but also across Europe when a group of us visited our team there a few weeks back. After a couple of years of virtual meetings, it was great to finally spend time with our European teammates in-person.

Another highlight from the visit was touring our European Logistics Center in Laakdal, Belgium, getting to see first-hand how efficiency and sustainability help us serve our consumers while minimizing our environmental impact. And I loved getting a chance to spend some time with some of the players on England's women's national football team, the Lionesses, who were inspiring as they prepare for the Women's Euro Champs in England this summer.

Seeing our European teammates in-person again reminds me of how deeply grateful I am to all of our roughly 79,000 global teammates. As we conclude this fiscal year, our NIKE, Inc. team has navigated so much together - working with commitment and resilience to serve our consumers and our communities.

And our teams have proven their ability to be unrelenting in executing against the macro complexities, while also building our future. In particular, I want to acknowledge our Greater China team, who have managed the business through a challenging period for

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them and their families. I've said it before and I'll say it again: this team is the greatest collection of talent in the world, and I sincerely thank them.

This fiscal year, and certainly this past quarter, macroeconomic challenges have created a dynamic environment. And yet, looking at our full fiscal year 22 results, it's clear that our strategy is working, and that Nike's unique competitive advantages continue to drive the business.

Today we are better positioned to drive sustainable, long-term growth than we were before the pandemic. Over the past two years we have transformed our business, building a muscle that won't just help us navigate future adversity, but one that gives us the ability and agility to continue to drive our growth. We now have a proven operational playbook, with many levers at our disposal.

FY22 posed operational headwinds throughout the year. But we continue to invest. As other companies have pulled back, our investments have made us stronger. We're excited by what we see as we look at our growth opportunities and the strong consumer demand we continue to enjoy.

As we look ahead to FY23, we remain very confident in our long-term strategy and our growth outlook. Our structural tailwinds which include the expanded definition of sport; the societal movement toward comfort and health & wellness and comfort; and the fundamental shift in consumer behavior toward Digital, continue to create energy for us.

These advantages, along with our size and scale, the strength of our portfolio of brands, and having the right strategy, give us the confidence to move even faster against the opportunities we see ahead.

Nike's growth has been, and will continue to be, the result of three areas I'll walk through today.

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First, our brand deeply connects with consumers, fueled by authenticity in sport and compelling storytelling.

Second, our culture of innovation drives a continuous pipeline of new product.

And third, we continue to have a competitive advantage in Digital, as one of the few brands that can connect with and directly serve consumers at scale.

Let's start with the strength of the Nike Brand. You've heard me say that these are times when strong brands can get stronger, and that has never been more clear than it is today.

Our passion for sport continues to drive our deep connections with consumers. While visiting our team in Europe, I was able to attend the "Nike vs Nike" FA Cup Final, which Liverpool won in a thrilling penalty shootout over Chelsea at Wembley Stadium. In April, Scottie Scheffler won the Masters, and earlier this month Rafael Nadal won his 14th French Open. And it's been a great month for basketball, as the WNBA season kicked off and an incredible NBA season concluded. The power of our full portfolio of brands was felt with Nike Basketball highly visible as the official supplier and partner for both leagues, and Converse and Jordan showing up proud in the NBA Finals with Draymond Green and Jayson Tatum, respectively.

It was also a quarter defined by a series of "Only Nike" moments, none bigger than the April unveiling of the Serena Williams Building here on our campus. This 1-million-square-foot building is the new home for our design and product creation teams. More than 200,000 square feet is dedicated to lab space, which allows our innovation and product creation teams to test new ideas in developing, presenting, and merchandising product. Along with the LeBron James Innovation Center that opened last fall, these facilities represent the single greatest investment in sports science, research, innovation, and design in the world.

Also in the quarter, we were thrilled to launch the Nike Athlete Think Tank, which brought a group of female athletes together on our campus to share their experience

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