Operator: Good afternoon, everyone, and welcome to NIKE, Inc. Fourth Quarter Fiscal 26 Conference Call. Release, you will 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.

Paul Trussell: Thank you, operator. Hello, everyone, and thank you for joining us today to discuss NIKE, Inc.'s fourth quarter fiscal 2026 results. Joining us on today's call will be Nike Inc, President and CEO, Elliott J. Hill and EVP and CFO, Matthew 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 nonpublic 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 the call 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 1. Thank you for your cooperation on this. I will now turn the call over to Nike Inc. President and CEO. Elliott J. Hill.

Elliott J. Hill: Thank you, Paul. I am proud of the progress our team made in fiscal year 26. When I look back at where we started the year, and where we are today, it is clear that we are building a much stronger foundation for our company. Through our Win Now priorities, we are elevating the fundamentals of our business, across our team culture, innovative product, brand strength, and how we serve consumers in our countries and cities. We are making meaningful structural improvements in each of them. Win Now is making the comeback possible. And importantly, it is what is enabled us to move about 8 thousand teammates into vertical sport teams under our new operating model, the sport offense, while also taking meaningful steps to simplify and accelerate our supply chain and technology. As our foundation improves, the sport offense is starting to create impact. Our renewed obsession with sport and the success of our athletes is fueling energy for our brand, and building momentum in our performance business, which grew mid single digits this fiscal year. Overall, the results are not there yet. We know we are not living up to our full potential. Particularly in Nike sportswear and Jordan streetwear, where sell through remains challenged impacting both current discounting and future order books. We are operating in a more complex macro environment, where we are seeing added pressure on traffic discretionary spending across our geographies. We are focused on what we can control. Bringing each sport together across product, brand, marketplace, and operations, and deepening our connections with athletes, consumers, and partners. When those dimensions connect, they create the Nike multiplier. it is repeatable, and sustainable. that is why I am confident we are building Nike the right way. Not for the next quarter, but for the next decade. Now the opportunity is consistency. Execution across every part of the portfolio, From here, we have to prove it every season. Now let me walk you through the details of the clearest signals of our progress in FY 2026. This year, we directed our marketing, social, and communications outreach to build influence across a wide network of sport-specific communities. We did that through our deep portfolio of athletes, creators, and sport partners. And through those networks, we brought energy and a uniquely Nike point of view to sports moments. Both big and small. When we lead with sport authentically, consumers respond. And we see that in both internal and external brand tracking. Our focus now is translating that brand strength into healthier demand cleaner marketplaces, and sustainable growth. You can see the same energy in our broader product pipeline too. We have now delivered 5 consecutive quarters of double digit growth in Nike running, And over that period, we have added roughly $1 billion to our running business. In FY 26 across Western Europe, and North America we gained 5 points of running market share in statement footwear, more than any other top 5 brand. The integrated marketplace is 1 of our most important areas of transformation. We have been rebuilding our wholesale relationships. Expanding our outreach, and improving how we show up across channels. For the fiscal year, wholesale revenue grew 4%, led by double digit growth in North America. And we have also made significant investment in physical marketplace, refreshing more than 15 thousand spaces in wholesale doors around the world. In Nike Direct, we have taken equally important steps. We are elevating the user experience by leading with performance celebrating sport moments, and we are discounting less on Nike Digital. In FY 2026, we have elevated more than 150 stores with sport led experiences. Over time, we will continue to rezone and elevate our fleet and close the doors that are no longer aligned to our strategy. At our scale, this takes time, We are not finished yet, I am confident our investments in the integrated marketplace will pay dividends for years to come. We are also investing in experiences in our key countries and cities to accelerate demand. In global football, our grassroots tournament, TOMA, has reached more than 10 thousand kids across 25 cities to date. In basketball, we continue to invest globally from our partnerships with the Chinese High School Basketball League and its 600 teams, to Jordan's The 1 tournament in 20 cities around the world. In running, we launched the After Dark Tour in Shanghai, It will reach 7 cities this fall. Last year, 50 thousand runners joined. And a third were first time runners. And with our more expanded reach, we expect even more impact. Being more local matters, It deepens connection, it builds loyalty, And it creates a pull market for our brands and products. As we strengthen Nike Inc's foundation, we are taking decisive action across our supply chain to lower cost, streamline operations, and rightsize our distribution network to match the demand ahead. We have redeployed resources from our Nike Direct technology teams to better support the company end to end across the entire value chain. And we are investing in advanced tools and capabilities to improve speed, precision, and reliability in everything we create. From air manufacturing and materials innovation to how we plan, make, and move product to the marketplace. At its core, this work is about serving athletes better and creating a more profitable business. that is especially important in Greater China. A critical long term growth market for Nike, where we are fully committed to winning. Our teams in China are executing a comprehensive reset returning to sport and innovation, taking a more local approach to product creation, and building a territory level offense. At the same time, we are reimagining how we operate in the marketplace We are working with partners in evaluating new ways to accelerate our return to growth, so we can be more premium more culturally connected, and move at the speed of the Chinese consumer, with seamless journeys across digital and physical retail. In the near term, we are executing cleaning up inventory, investing in must win doors, and where we invest, we are seeing sales increase high single digits. I am confident in our leaders and our plans to restore long term marketplace health in Greater China. Converse sharpened its strategy this quarter. it is getting clearer on the role it plays within Nike Inc. And where it will grow. Especially with the Chuck Taylor and Jack Purcell franchises. As part of that focus, we announced that Shai Gilgeous-Alexander has joined the Nike basketball family. Shay and Nike basketball are a perfect match. This move allows Converse to fully focus on serving creators, through its lifestyle business. That clarity matters. When we are focused we win. And right now, global football is the best example of that playing out through the sport offense. it is been an incredible few weeks for the World Cup. What feels different this time around is we are not treating the tournament as a single moment. We are using it to reshape our business telling a connected story over time, engaging different communities in relevant ways, and building momentum that carries well beyond the tournament. We built a full Nike football universe. It started with a simple image of 31 Polaroids, a map of what was to come. An epic film called Rip the Script followed, branching off into individual athlete stories, collaborator collections, innovation unveils, retail experiences, and local tournaments. We have built it this way because the next generation wants to engage with sport, on their terms. Discovering, sharing, and participating in the story as it unfolds. Every beat, every story is a doorway. giving different micro-communities their own way in. This is the way to reach scale in today's culture. By the first week of the World Cup, we had 1.5 billion views of our various stories. This is about deeply understanding today's consumers, and building modern, meaningful, and innovative connections with them. This is nothing new for Nike. Once again, we are out front rewriting our own marketing playbook. At the center of the Nike football universe is amazing product. We launched AeroFit in our national team kits to help athletes compete in extreme conditions. By the start of the tournament, we had already sold 2.5x the number of kits compared to the same period World Cup 22. Earlier in the year, we redesigned our Tiempo and Fandom franchises And before the tournament, we launched our new Mercurial in 2 expressions of speed. At launch, the Mercurial became the fastest selling 24 hour launch for cleated footwear, in the history of Nike Direct. We also connected Nike By You to the tournament and team colors to fuel our new innovation. With our X2 collections, we created amazing energy with leading creatives, and we reached scale through Nike Sportswear, Skate, Cactus Jack, and N 7 to connect deeper with broader football culture. And as we talked about last quarter, we are activating the marketplace. Elevating over 5 thousand football doors around the world. The World Cup is always a moment to prove ourselves. it is 1 of the toughest battlegrounds in sport. And we are coming with our best. We are leading the conversation in shaping football culture, a strong early proof point for the sport offense. As we move into fiscal year 27, we are focused on building on that momentum. Here's what you can expect from our teams: As we scale the sport offense across more sports, we expect growth to expand beyond running, into training basketball, and ACG. But that progress will continue to be uneven. We expect sportswear and Jordan streetwear to continue to be negative this fiscal year with improvement expected in the back half. We know changing their trajectory is critical to restoring sustainable top line growth, because together, they represent approximately half of our revenue. We are moving quickly to reposition both businesses. In the second half, Nike sportswear will introduce more than a dozen new footwear styles each with distinct consumer journeys. But this work will take time to scale and translate into consistent results. Our teams are also focused on inspiring the consumer in modern ways while driving commercial impact at local sports moments. And we will continue to invest in how we show up as a premium brand in both digital and physical retail, including a plan to elevate 50% of our Nike Direct owned fleet by the end of the fiscal year. Across the enterprise, we will operate with even greater discipline to improve planning accuracy strengthen inventory management, and expand our margins over time. Most importantly, we look forward to sharing the next phase of our growth strategy at our Investor Day. On November 16 and 17. Before I pass it to Matthew, I want to take a moment and recognize him for his many contributions to Nike over his nearly 18 years at this company. Matthew helped guide the company through a demanding stretch. And he has been a trusted partner to me and to this team. I appreciate his continued support and his commitment to ensuring a seamless transition in the coming weeks and months. I would like to thank him for all he has done for Nike, and wish him the very best in his next chapter.

Matthew Friend: Thanks, Elliott. I have truly valued the partnership with you and this team. And I am proud of the progress that we have made together. As we close fiscal 26, we made meaningful progress across the business. Through rebalancing the product portfolio driving momentum and growth in performance, while reducing classic footwear franchises by more than $2 billion. Keeping revenue flat on a reported basis, versus the prior year. Stabilizing gross margins excluding the impact of incremental tariffs, taking initial steps to reset our cost base and improve operating efficiency and effectiveness and our balance sheet is strong. With substantial liquidity and flexibility to operate as we go forward. Our fourth quarter financial performance was in line with our expectations. However, the operating environment became more challenging as we progressed through the quarter. After a stronger start in March, especially in North America, by mid April, we began to see a deceleration in retail sales trends. Our consumer is under pressure. Around the world. And we can particularly see it having a larger impact on sportswear which declined double digits in the quarter with a similar decline in retail sales. At the same time, momentum in performance sports continued to build. Growing mid single digits and delivering positive year over year retail sales comps across running, training, and global football as well as other sports. We are monitoring marketplace inventory and promotions closely. And adjusting buy plans to manage future supply and sell-in with demand and improvement in full price sales. Before I turn to our results, I want to address an unplanned benefit related to tariffs, which was recognized in the quarter and was not included in our previous financial guidance. In the fourth quarter, we determined that the financial recovery of claims related to incremental tariffs paid under IEPAA had become probable. This resulted in the recognition of a onetime benefit of $986 million. Offsetting the IEPAA tariffs embedded within cost of sales that had been expensed through the income statement throughout fiscal 26. As of quarter end on May 31, we collected over $300 million of cash related to these claims. The remainder of the benefit was recorded to accounts receivable as we await recovery. Tariffs remain a dynamic cost headwind that we expect to continue looking forward. And so I will share more on our rate assumptions later in my remarks. Now I will turn to our fourth quarter results. For the quarter, revenues were down 1% on a reported basis. And down 4% on a currency neutral basis. Reflecting modest growth in North America more than offset by expected declines in Greater China, EMEA, and Converse. Nike Direct was down 9%, with Nike Digital declining 12% and Nike stores down 7%. Wholesale grew 1%. Gross margin was 49.2%. up 890 basis points versus the prior year. Driven by a 900 basis point benefit related to recovery of IEPAA tariffs. Excluding this benefit, gross margin would have been 40.2%, down 10 basis points versus the prior year, which included additional severance costs related to supply chain actions in North America and EMEA we highlighted last quarter. We expect these actions will deliver positive operating leverage and gross margin. In fiscal 27. SG&A was down 2% on a reported basis versus the prior year, reflecting continued discipline managing expenses while accelerating investment for the World Cup. Our effective tax rate was 19.6%. Earnings per share for the quarter was $0.72. And excluding the benefit on tariff recovery, was $0.20. Inventory was flat versus the prior year. With continued progress made to address aged inventory in Greater China. For the full year, revenue was flat on a reported basis and down 2% on a currency neutral basis. Gross margin was 42.9%, up 20 basis points versus the prior year. Including a 210 basis point benefit related to recovery of IEPA tariffs. Excluding the benefit, gross margin would have been 40.8%. Diluted earnings per share was $2.10, down 3% versus the prior year. Excluding the benefit on tariff recovery, earnings per share would have been $1.58. Looking at our reported full year results for fiscal 26, you can clearly see that our gross margin slightly expanded while earnings per share modestly declined. Despite significant investment and nearly $400 million of severance charges made to reposition and create a healthier foundation for our business. Now I will turn to performance in the geographies. In North America, Q4 revenue grew 3%. Nike Direct was down 6%, while Nike Digital was down 5%. Nike Stores were down 7%. Wholesale grew 10%. EBIT increased 91% on a reported basis. Excluding the tariff refund benefit, EBIT would have declined 1%. North America continues to drive momentum in performance. Including strong double digit growth in global football and running, as well as growth in kids and golf. Sportswear was down high single digits. Retail sales grew over the first 6 weeks of the quarter. However, we did see a deceleration in late April which we continue to monitor closely. Particularly in sportswear and Jordan streetwear. Wholesale revenue growth was driven by new and existing distribution. 1 highlight I would like to note is that our revenue growth and retail sales comp with Foot Locker was positive for the first time in 4 years. And we continue to be encouraged about the path ahead. Inventory grew mid single digits in line with our plans, with a healthy closeout mix. And importantly, excluding the tariff refund benefit, underlying gross margin profitability continued to improve year over year. In EMEA, Q4 revenue was down 6%. Nike Direct declined 16% with Nike Digital down 24%, and Nike Stores down 9%. Wholesale was down 1%. EBIT was up 8% on a reported basis. EMEA continues to work through heightened inventory and promotional levels, disruption in the Middle East, and a higher portfolio mix of sportswear, than our other geographies. We had continued momentum in performance through running, global football, and golf. All of which grew double digits versus the prior year. Although digital revenue declined, off price was down over 50%. Following aggressive actions to reduce promotions. This resulted in a 15% improvement in full price realization. Sportswear declined double digits. And sell through continues to be challenging. and so we have tightened buys and moderated selling plans for the near term. Total inventory dollars were up low double digits. With actions in place to reduce supply and accelerate liquidation to improve marketplace health. In Greater China, Q4 revenue declined 7%. Nike Direct declined 14%, with Nike Digital down 25% and Nike Stores down 9%. Wholesale declined 19%. EBIT was down 20% on a reported basis. As you heard Elliott say, there are several changes underway in Greater China. And the team continues to execute on their plan. In season sell through has improved sequentially, and average retail discounts are down. We are seeing recovery in full price realization on digital, after more aggressive actions to reduce promotions over the last 2 quarters. Running grew mid single digits. And global football and tennis were up double digits. Our pinnacle retail expression the house of innovation in Shanghai, posted double digit growth for the quarter. We also saw sales growth in the doors that we have reset, and encouraging initial results at our newest ACG door in Nanjing. Inventory was down double digits. With units also down double digits. We continue to take actions with partners to clean up the marketplace. And expect revenue trends in Greater China over the near term to be in line with recent performance. In APLA, Q4 revenue was down 1%. Nike Direct declined 3%, with Nike Digital down 8%, and Nike stores up 2%. Wholesale was up 1%. EBIT declined 1% on a reported basis. The business across this geography continues to be mixed. With strength in select territories and performance sports, offset by ongoing pressure in sportswear. Running and global football grew double digits, with high single digit growth in tennis and ACG. Across the marketplace, the team is focused on elevation, and expansion. Where we have invested in elevated retail, we are seeing a strong increase in comp sales growth. We also added new digital partners across 5 Southeast Asian countries. Inventory grew high single digits versus the prior year, with a sequential improvement in closeout mix as inventory actions continue across the geography. Now I will turn to our outlook. The environment around us continues to be volatile. Including evolving tariff policies, ongoing disruption in the Middle East, oil prices, and other factors that could impact operating costs, consumer behavior, and weakness in store traffic and retail sales. These assumptions reflect the macro environment as it stands today, and we are not expecting the environment to improve meaningfully over the next 6 months. Last quarter, we provided guidance which cumulatively included the fourth quarter of fiscal 26, through the first 2 quarters of fiscal 27. With revenues to be down low single digits gross margins to inflect positive in Q2, and earnings to be flattish over this period. We reiterate our expectation for earnings to be flattish over that time period, excluding the benefit from tariff recovery. However, the composition has shifted. Considering the current macro environment, as well as recent sell through trends, we are taking actions to tighten buys, reduce future sell in, and manage inventory. This will result in revenue moderating but also higher gross margins. We now expect revenue to be down low to mid single digits. With Q2 having a sequential deceleration from Q1 due to some unique factors equating to a multipoint headwind. Including higher digital promotions in the prior year in EMEA and timing of North America wholesale shipments. We now expect gross margin expansion earlier. Beginning in Q1. We will continue to be disciplined with SG&A management driving productivity benefits and operating overhead, Beginning in Q1. Specifically for the first quarter, we expect reported revenues to be down low to mid single digits. With no expected benefit from foreign exchange. And currency neutral revenue growth consistent with recent performance. We expect gross margin in Q1 to be slightly positive. The tariff environment continues to be uncertain, Our forecast is based on incremental tariff rates of 10% continuing through the end of July, and then increasing to 15% thereafter, as we communicated last quarter. We expect Q1 SG&A dollars to be flat with operating overhead declining while demand creation grows high single digits as we invest into the World Cup. We expect our full year tax rate to be in the low-20% range. While the environment remains volatile and it is taking more time for the top line to inflect positively. We remain confident in the actions we control to improve EBIT margins and increase cash flow from operations. We are tightly managing expenses. Reallocating resources to elevate retail and drive deeper consumer connections, and taking actions to structurally improve the efficiency and profitability of our supply chain as well as Nike's overall business. With that, I will pass it back to Elliott.

Elliott J. Hill: Before we go to questions, I want to leave you with 1 thought. We spent a lot of time this quarter talking about sport. The highs, the setbacks, the pressures that define teams. Yet there is 1 I keep coming back to. Earlier this month, we watched something special happen in New York. The Knicks became NBA champions. A team that had carried the weight of expectations more than 50 years finally broke through. And when you look at what happened at the final buzzer, the trophy, the celebration, the joy across the city, it is easy to think. that is where it was won. But it was not. The championship was not built on a single series. or even in 1 season. It was built over time. Through setbacks and step-forwards, through relationships, and buying into a system where everyone knows their role. You saw it when it mattered most. Because every 1 of those wins in the finals was a fight. Double digit deficits. They did not flinch. They did not panic. They went to work. Chipping away. 1 stop. 1 bucket. Another stop. Again and again. that is not luck. that is a team that is ready. Most importantly, that is belief. Belief in their system. Belief in each other. Brunson kept coming. Towns was disruptive at both ends. Hart made the hustle plays. Different players, 1 goal, all focused on closing the gap. Possession by possession. And that is what I see in our team. belief in our system in each other, in the way we are building this. Not because the work is finished, and not because every result is where we want it to be today. But because we know what it is built on. I see the progress. I see the structural change. I see the foundation getting stronger. I see the sport offense. Taking hold. I see a team that is been tested and is ready for what is in front of us. The Knicks reminded all of us of something important. The real story is never just a celebration. The real story is everything it took to get there. And that is exactly how we are building Nike. The right way. Because the goal is not 1 championship, it is building a team that can do it again and again. Operator, we are ready for questions.

Operator: We will now begin the question and answer session. To ask a question, press star then the number 1 on your telephone keypad. Kindly ask that you please limit your initial question to 1. Our first question will come from the line of Adrienne Yih-Tennant with Barclays. Please go ahead.

Adrian Yee: Thank you very much. I guess, Elliott, 1 of the things you talked about was kind of the difficulty in full price sales-through of, I guess primarily sportswear. I am just trying to figure out how much R&D and innovation investment in that sportswear category to drive kind of future growth. And if you are pulling back on inventory, and focusing on full price selling, yet having struggled with full price selling. Just wondering how you can get the performance success to Halo out to sportswear. Thank you very much.

Elliott J. Hill: Great question. Thank you, Adrian. Let me, start first with the sport offense. So I think it is really important for everyone on the call to understand We understand the importance of getting both, Nike Sportswear and Jordan Streetwear back to growth. With that said, our point of differentiation, our point of distinction, what creates authenticity for Nike, is our sport business, and that creates a halo over both of those brands. it is also what differentiates us from fashion brands. And so the reason why we have put so much time on the sport offense is because we believe that is how we create that authenticity around that business. We have created a portfolio of sport verticals small cross functional teams, focused on a consumer, Nike running, which I am sure we will dive into here in a minute, It led the way And as you heard in the prepared remarks, we have had great response with a sharp, sharp focus on the consumer, whether it is the product, whether it is the investments we have made on the ground in retail with Eakins, our tech reps, and the results are clear. Running grew $1 billion and or $1 billion over the last 5 quarters. and we gained 5 market share points. Shifting over to other sports. We see it in the sport offense. it is working in real time, Nike basketball, that team, yes, we have Ja 1 or Ja 2. The Ja 3, but the way they respond around the Knicks, championship's been phenomenal. The ad we ran the championship product, the preorders and footwear, Nike football, I am inspired. You heard me talk about that in my prepared remarks, around the way the Nike football team is leveraging the World Cup to create a halo over the Nike brand, not just sport, but also culture, And we would not be doing that if we were not in the sport offense. And we see momentum gaining training, tennis, golf, outdoor, I will use 1 example before I jump to sportswear. I am I am not sure if you guys watched Serena today, but she had the radical air on. that is performance product. And that will start to show up. That innovation will start to show up in some of our sportswear as well. So when we lead with sport, we win. As it relates to sportswear, and Jordan, we have taken $2 billion out of the market in FY 2026 of our classic franchises. We do have now dedicated teams against each of those consumers. And so that team now is looking to the future And in the second half of FY 2027, Sportswear is gonna introduce more than a dozen new footwear styles. And it is not just going back to the vault and doing old retro shoes. It is leveraging innovation. And you will see some newness and freshness coming in new silhouettes. And so the Sportswear team is moving to quickly reposition the business. Being more community driven, on the ground, working with local creators, authentic storytelling and product, We are investing and accelerating our local product creation as well. You will see us leverage that more. Around the world. And in the end, it is gonna take time to scale but I am confident in the work that the teams are doing.

Operator: Our next question will come from the line of Bob Drbul with BTIG. Please go ahead.

Bob Drbul: Hi. Good afternoon. And, Matthew, you know, I just wanna say thanks for the last 17 years. it is been a pleasure, and wish you all the best. Thanks, Bob. I guess if I could shift Elliott, when you look at the innovation pipeline, I think 1 of the bright spots really has been the mind I guess, 2 parts to this is when you think about your ability to scale the MindShoe and sort of broaden that out, Can you talk about what you are doing throughout the business how quickly that can occur? And I guess the second piece of it is, you think about the innovation over the next, you know, 6 to 18 months, where are you most optimistic, most excited about what is coming in the pipeline? Thanks.

Elliott J. Hill: Yep. Thank you, Rob. Here, I will go back to we are leading with the sport offense. We now have those small cross functional teams. Against each of the sports, obsessing the consumer, taking the insights for the consumer, translating that into a relentless flow of innovative, beautiful, coveted product across footwear apparel, accessories. And we needed to get that going, Rob. that is where a Nike mind comes from as an example. And so the first time you are gonna see the product across all of the sports that the teams worked on from brief to the market will be spring 27. So that will be the first time you are gonna see the fruits of those teams' efforts. But, nevertheless, I am excited what the team continues to do in running, where they set it up. This quarter alone, we would launch the peg 42 and it was a full length encapsulated Zoom airbag and sold through well. As I look forward to running the Airofit, product that we launched in football is gonna show up and running. apparel in fall 2026. We have got a Vomero 17 coming in new and running ACG continues to bring really interesting product, the radical airflow is amazing looking product, and that sold well. The long sleeve sold out immediately. And you will see us then also leverage that innovation across multiple sport categories. Football, we have talked a lot about. Aerofit, the Mercurial Pack, coming back next year with the Women's World Cup. I am excited. We are hosting a bunch of retailers this today yesterday and today in New York. We have had tremendous feedback to the product coming there both in sport and in culture. Basketball, excited about the dimensions that the team's bringing there. Of course, Caitlin Clark's coming, so that will be launched in the in holiday 2026. Training. Nike By You. we see a big opportunity there, and you will see us scale that beyond the slide. Coming in spring of 27. Free MetCon. Another performance fabric or innovation with free that is doing well. Nike Pro, men's and women's. And so the point there is and it is not just performance. I think the team is doing a nice job of launching new products in sportswear. Probably the best example this quarter would be the moon shoes. So short answer to your question is, it is taken time to get the flow of innovation and product going. But I am I am excited by what the team's doing. I am confident in the teams. And you will start to see a season in, season out that relentless flow of product that we expect and you expect out of Nike.

Operator: Our next question will come from the line of Matthew Robert Boss with JPMorgan. Please go ahead.

Matthew Boss: Great. Thanks. So, Elliott, could you elaborate on the sequential cadence of sell through trends across performance relative to sportswear, And what you see as the optimal mix between performance and sportswear, roughly versus the roughly 50/50 split today? And then, Matthew, just on the numbers, could you help us just bridge the drivers of first quarter revenues down low to mid single digits, further moderation in the second quarter, just relative to the -1% decline here in the fourth quarter as the base?

Elliott J. Hill: Thank you, Matthew. Again, we do not break out sell through by sport and sportswear. What I can tell you is we had a strong start in March and, especially in North America on sell-through. I watch it, the teams watch it, track it every single week. We are on it, watching sell through. And then by mid April, we began to see a, deceleration in retail sales trends. And that softness did coincide with our we believe, our consumer being under more pressure, impacting traffic and discretionary spend, But Matt did touch on it, I think, in his prepared remarks. We are seeing a strong bounce back with the World Cup momentum right now. So as we moved into June, we are seeing a halo that is being created by the World Cup. So it is something that we will continue to monitor every single quarter-- excuse me, every single week and make the necessary adjustments that we need to make on forward orders. In terms of optimal mix, I think ultimately, the consumer's gonna decide what the optimal mix is. it is not something that is predetermined. I think if we predetermine we want X business to be bigger than the other, I think it forces our teams to do unnatural things to get to that number. So it is not a number that we are driving the teams towards. We are gonna let the consumer ultimately decide the mix of sport to sportswear.

Matthew Friend: And, Matthew, on the revenue guide, I think the way to think about it is we provided specificity on the first quarter that we expect revenue to be down low to mid single digits. And I think the biggest driver in Q1 versus Q4 is the fact that FX will no longer be a tailwind to revenue. Outside of that, know, we do not expect a meaningful change in the in the mix of the portfolio or anything else. As it relates to Q2, we just wanted to highlight that we expect the sequential deceleration relative to Q1. As you will recall, in Q2, 2 of last year, there were some anomalies that drove our revenue in that particular quarter. And the 2 largest ones that equate to a multipoint headwind were much higher level of digital promotions in EMEA last year in the second quarter. And you can see from our results this quarter, we have taken a massive turn on the amount of promotional activity that is on nike.com and on our digital platforms in Europe. And our off price business was down 50% versus the prior year. it is the right decision. it is it is strategically what Elliott highlighted as he came in that we need to reposition digital be a premium business, but that is gonna create a comp issue in Q2 of next year. And then we also had, extraordinarily high wholesale growth in North America in Q2 last year. Also related to some timing anomalies. So we just wanted to call that out in advance as we as we think about this performance over the next or over the next 2 quarters.

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

Lorraine Hutchinson: Thank you. Good afternoon. I was hoping you could go into a little more detail on your China strategy. It sounds like there some renovations underway for the physical fleet but how are you thinking about the direct to consumer, particularly the digital business from here?

Elliott J. Hill: Yeah. Lorraine, and I have said this every quarter that I have been on this call, I will continue to say it. China it is the second largest market today. It will be the second largest market in near term or any you know, 3 to 5 years from now. And so we remain committed to serving the Chinese consumer. We are gonna do it through sport. I think the key in China is we have to get back to growth in China is we have to be more premium. And culturally relevant and we have to lead with sport. it is those 3 things In sport, some of the proof points running did grow mid single digits this quarter. We had a great launch of the peg 42 there. The team just did not sell it online. We sold it in 2,000 physical doors, and we really elevated the presentation, which is what we need to do more of. Global football was up double digits. We launched the Mercurial. We had a really good storytelling both digitally and physical on that. The team's moving resources out to our territories and our cities. Connecting with consumers, which I think is also critical to our success there. We have got the after dark tour from a running perspective up and going there. We celebrate it. The Chinese basketball league. I talked about that. But we know that is not enough, Lorraine. And so we are gonna take additional actions to reimagine the marketplace. Number 1, it is gotta be easier for a consumer to find and we do have to be more culturally connected. Or reposition the brands as premium to do that. Gotta continue to clean up the marketplace and elevate the marketplace. We have to invest in elevating online and offline storefronts. So that we have a consistent consumer experience between that online experience that you referenced and then the offline experience. And we know that success in China is gonna require deep local partnerships. And we continue to execute the rep the reset with both online and brick and mortar in mind and those partners mind. And so we are working closely with them 2 last points. Local for local. We have hired and are resourcing our Greater China local product creation team They are they will be delivering locally designed developed, and manufactured product in China in holiday 27. And then the last thing I will say is it is been great to have Kathy Sparks leading that team. I have a tremendous amount of confidence in her and her team We have a clear diagnosis. We have a plan in place, and we are moving with urgency. So overall, pleased with the progress we are making in China.

Matthew Friend: Next question comes from the line of was just gonna add that, you know, we also highlighted this quarter the progress that the team continues to make in China. And I just wanted to reiterate a couple things that I said on the call, we are seeing recovery in full price realization on digital. So, you know, in addition to what every everything Elliott said, the team has taken aggressive actions to reduce promotions over the last 2 quarters, and we are seeing that bear fruit on our across our digital on the digital properties in Greater China, including partners. Our pinnacle retail store, you know, the most premium Nike store that we have in China is in Shanghai. House of innovation, and it grew double digits in the quarter. A reflection of elevating retail and focusing on sport in the market. And then as Elliott referenced in his remarks, you know, where we have elevated our other retail doors with our partners, as we talked about our top-door offense, we are seeing strong comp performance in those doors for another sequential quarter. And so we continue to be encouraged by the actions that we are taking and the decision that we have taken to sell in less inventory into the marketplace in order to create a more full price business. And the progress that we are making with our partners on aging and circuitry in the marketplace is meaningful. And so as we look forward, we do expect that the revenue trends in greater China over the near term will be in line with our recent performance. And we continue to believe that profitability will bottom before sales in this market.

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

Michael Binetti: Matthew, let me add my thank you for the last 17 years. Wishing you all the best. Thanks, Michael. Maybe just a couple brief comments on where the order books on the wholesale side saw the most impact. You know, which geos got better or worse. But then maybe just a qualitative thought on back half of fiscal 2027. I know you commented that sportswear will be down the year, but improves in the second half. Is that so that is negative for the full year. Is that negative as you start to look out to the springsummer 2027 books? And how are retailers in general approaching springsummer 2027 overall given the pretty aggressive actions you guys are taking as you work through the channels here?

Elliott J. Hill: Well, so here's what I would say on the outlook as we look out, and we reiterate that we expect earnings to be flattish. I want to start there over the 3 quarter period that we guided. But we do know that the composition has changed Matthew hit on that in the prepared remarks. Part of that is the software sell through. And weaker macro environment, and we are tracking the sell through weekly and making adjustments. But we expect revenues over that period that we guided to be down low single digits to mid single digits. At the same time, we expect gross margins to expand in Q1 And we are actively managing costs in our business, and we will see the benefits beginning in Q2. And so we look forward to sharing more about our overall view to the future at Investor Day from an outlook perspective. So, again, overall, that is how we are seeing the balance of this calendar year. And then and, like I said, we continue to track sell through the order books, and we are making the adjustments that we need to make.

Operator: Our next question will come from the line of Aneesha Sherman with Bernstein. Please go ahead.

Aneesha Sherman: Thank you so much, and best wishes to you, Matthew. Elliott, about 6 months ago, you talked about being in the middle innings of the turn. We now go into fiscal 27. Can you give us an update on where you are at? And do you expect FY 2028 to be the first quote, unquote, normal year of operations? And then, Matthew, a follow-up on margins. You have said there is a clear path to double digit margins today You guided for a faster inflection in margins than before. Can you walk through some of the main drivers of this margin inflection that are aside from operating leverage, so excluding sales growth, what gives you the confidence that margins will inflect first? Thank you.

Elliott J. Hill: Yep. Well, first off, I do not think there is been anything normal since I have sat in this chair. Neither. there is been nothing normal about this. But you know, we in December 2024, we launched the Win Now actions, and it helped us without question, rebuild the foundation of Nike. And we do remain on track to sunset the Win Now actions by the end of this calendar year. So I am gonna reiterate that. The idea is we wanted to move through the actions in a really thoughtful sequence. We began first around culture, getting the team refocused on sport and growth and really inspiring our teammates around that. And I think we have made tremendous progress there. Was also about reigniting our brand. Being more emotional and inspiring with consumer connections. Hopefully, you are seeing and feeling some of that of us through this quarter. Then we started to focus on our product portfolio. Driving a steady flow of innovative, coveted, beautiful products. And so next, it is about how we then start to execute out into the countries and the cities that around the world that make a difference for us. So we continue to elevate And so I think we are making tremendous progress. And we are prepared as we move through this calendar year to sunset. What that then sets us up to run the fourth the sport offense, and we are gonna share more of what is to come next at our investor day this fall. And I will just sort of end here is that we are not building this business for the next quarter or the next year We are building it for the decade to come, and we are sunsetting when that sunsetting when now is just sort of the next step on our journey. And so we again, we look forward to outlining more in November.

Matthew Friend: On margins, Anisha, you know, I would say that the our performance this quarter has given us increasing confidence that our margins are stabilizing and that we are starting to see a pathway back towards gross margin expansion. In the fourth quarter, our margins, if you exclude the tariff benefit, were down 10 basis points versus the prior year. And that was better than how we guided. We guided to be down 25 to 75 basis points. And I would say that the biggest driver was discount improvement. That we are seeing in North America. We are seeing lower sales related reserves in North America, lower cancellations, and lower discounts. And so that is that is been giving us confidence that margins are coming back. We also have had we had 4 quarters of sequential improvement in our margins overall throughout fiscal 26. And then I do think it is really important to note that, you know, we highlighted in the third quarter, and we have talked about this a couple times now, we see a meaningful opportunity to structurally improve our gross margins. Really focused on taking out costs of our supply chain and the make of our product. And the actions that we took in Q3 and Q4 were the initial steps of us reducing the number of facilities we operate to changing the size of our workforce to changing the way we flow product. From factory to retail. And we expect that while those were costs largely in fiscal year 26, we expect those to drive margin in fiscal year 27 and contribute to this trajectory to get back to double-digit margins as you referenced. And then, obviously, as we continue to take actions on our business reducing tightening buys, reducing the order book in holiday, and thinking about the and reducing the order book as we look beyond, we do expect that we are gonna have a more full price business and a higher and healthier business, and that should help us pull margins up in the geographies outside The US that are still depressed relative to where they were.

Operator: Our final question will come from the line of Ike Boruchow with Wells Fargo. Please go ahead. Please go ahead.

Ike Boruchow: Hey, Elliott and Matthew. Matthew, congrats on the 17 years. I just wanted to focus on North America wholesale. I know you guys do not guide you know, by geography or channel, but just in terms of the shaping, you know, I guess my highest level question is, are there any quarters next fiscal year you are expecting North America wholesale to decline just based on the sell in and some of the comments that you made on POS. So just kinda curious if you could kinda help shape that at least for the first half that you kinda had walked us through. Thanks.

Elliott J. Hill: So let me just North America. What I would say about North America. They continue to lead the comeback. That team does with Tom Petty his crew have done. And I think part of it is because the biggest part is they have centered on sport. And they are elevating the marketplace, not only our own digital footprint and physical footprint, Nike, but also the relationships with the wholesale team. As well. And so again, I think what they have been able to do is the model for the rest of the geos to follow. And the only other thing that I would say really quickly is that when we do elevate, we see better sell through, stronger sell through. Both in our own doors and our partner doors. The team's doing a great job managing sell through every single week, making certain that we are adjusting order books making certain we are shipping in the appropriate level of inventory, so that we drive not only revenue for ourselves, but revenue and profitability for our wholesale partners as well. So I think the team's got their they found a really good rhythm there. And I am really I remain very bullish on North America and their ability to continue to have sustainable growth. Moving forward.

Matthew Friend: Yeah. And I would just add, Ike, what I think when you look at Q4 and you look at the North America wholesale growth reported up 10%, I just want to, you know, make the point that we did not sell in up 10%. There was a meaningful amount of that revenue growth that was associated with lower returns or sales related reserves and returns lower discounts, and lower cancellations. And so it is a healthier business in North America. They contributed to that growth in Q4. It is not just that was not just a wholesale comp. But when you look forward into 2027 specifically to your question, Q2 has a tough compare in North America. And what I would say is that without getting into the specificity of every quarter, Q2 does have a tough compare in North America. And we continue to believe North America is leading our progress You know, we have talked for several quarters about the fact that the geos are operating on different time lines. And while we have seen a little bit of a blip associated with retail sales in North America, you know, it is highly correlated as we can see with gas prices and how those fluctuated in North America. You know, we continue to believe that North America is out front leading us in our turnaround. And our comeback. And we are looking forward to the momentum that we continue to build in the geography. I referenced Foot Locker and the fact that this quarter was the first quarter that we grew both Nike revenue plus Nike retail sales in Foot Locker in over 4 years. And so, you know, we are encouraged by that relationship. You know, they are an important partner to us in North America and outside, but especially in North America. And then, you know, we continue to be furthest ahead in the progress we are making in Nike Direct. In North America and in digital. And so, you know, we are continuing to take steps forward there to a more full price business. And, believe that we are on the right path. As it relates to that marketplace.

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