Nike Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Robert Drbul - Guggenheim Securities LLC - Analyst : Elliott, welcome back. Congratulations and best of luck.

Question: Robert Drbul - Guggenheim Securities LLC - Analyst : I guess, I appreciate all the commentary. The one question I'd love for you to elaborate a bit more on is the relationships and the reception by your retail partners, especially around earning back the shelf space that you've given up as a company over the last few years.

Question: Robert Drbul - Guggenheim Securities LLC - Analyst : Great. And I guess one of the other meetings, I think you said you had was with the NCAA. Just curious if you think this is the year for the Ducks, are they going to win the college football playoff? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 19, 2024 / 10:00PM, NKE.N - Q2 2025 Nike Inc Earnings Call

Question: Michael Binetti - Evercore ISI - Analyst : Elliott, welcome back, it's great to hear your voice. Elliott, do you think -- you gave us some commentary around how you're planning the near-term investments in the business. And Matt, you made some allusions to some of those investments continuing into the fall. As you look at your first 60 days and think about the path to getting this brand back to growth longer term that it deserves. What do you think are some of the most important things about how you phase the cost in bringing investments back into the business along the way and the pace of those investments along the way as you look to, I guess, returning to growth as we look past fiscal '25.

Question: Lorraine Hutchinson - BofA Global Research - Analyst : You're accelerating a lot of the work around lifestyle in fiscal '25. But how much incremental pressure do you expect on 2026 sales? And based on your analysis of the pipeline, when will newness gain sufficient scale to offset that pressure?

Question: Adrienne Yih-Tennant - Barclays - Analyst : Elliott, welcome. Look forward to meeting you.

Question: Adrienne Yih-Tennant - Barclays - Analyst : I apologize if my phone is crackly, sorry about that. I appreciate the notion of margins before sales. And so when we look at kind of what you're doing, you accelerate sort of the reset actions. When you get to the fall of next year, do you have the proven innovation at scale to replace what you are liquidating now? And then, Matt, is there a reset inventory provision that's happening right now in the gross margin -- excuse me, and kind to wrap that all up, it would very much seem that you are going for those margins before sales. So when we think about FY26, I think it would be rightfully the right thought to think that sales would be down again if you're going for margins as you say, healthy bedrock margins before you drive the top line growth?

Question: Jay Sole - UBS Equities - Analyst : Terrific. Elliott, you mentioned in your prepared remarks that you're willing to take some actions in the near term that will hurt in order to do what's best for the brand and the company over the long term. The history of NIKE is that the top companies always try to balance short-term earnings with sort of long-term investment. The question is how far are you going to take the actions in the short term to really put the business on that sustainable path you're talking about to drive? In other words, how long are you willing to sort of take the actions in terms of resetting the marketplace, making investments in key cities, rebuilding brand marketing. Is there a limit? And is there a sort of a balance you're thinking to strike, or you want to go 100 percentage, do the right thing, whatever it costs to put the company back on the path to winning. Sorry, that's a long question, but hopefully that make sense. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 19, 2024 / 10:00PM, NKE.N - Q2 2025 Nike Inc Earnings Call

Question: Matthew Boss - JPMorgan - Analyst : Great. Elliott, so maybe could you help rank the fields of play opportunities you see by category. And then just on the long-term view, what's a reasonable timeline to realign inventory to pull market? And then after for the product pipeline and the marketing investments to return to sustainable profitable growth.

Question: Jonathan Komp - Robert W. Baird & Co., Inc. - Analyst : I want to follow up on the output sort of margin recapture potential, if you will. I'm just curious, Elliott, as you look at some of the moves in the past few years as the brand is focused on, where are the products being sold more in the digital channel, specifically. And today, if you look at the organizational structure around supply chain and distribution, are there sort of unique opportunities to become more efficient? Or is it purely going to be getting back to growth to scale some of the investments from the past few years?

Question: Brooke Roach - Goldman Sachs - Analyst : Elliott, I was hoping you could speak to any specific actions that you'll be taking either in the North America or Greater China geographies as you look to accelerate some of these actions over the course of the next 12 months?

Question: Ike Boruchow - Wells Fargo Securities, LLC - Analyst : Elliott, great to hear from you. Actually two questions, I think, for Matt. Just a follow-up on the guide. When you talked about the expense guide for the third quarter, I just want to make sure I understand. Is that relative to the $4.2 billion in expenses of last year because I know there was the restructuring charge that some of us took out. So just trying to understand the growth up slightly or down slightly is relative to what dollar number. And then just a follow-up to that is when you talked about greater headwinds relative to 3Q. I think that was in the sentence of talking about revenue, gross margin, and demand gen spend, was the comment meant to absolutely all three of those line items? Or was it really meant for revenue or gross margin or something more specific?