Nike Inc Q4 2024 Earnings Call Summary

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

Question: Matthew Boss - JPMorgan - Analyst : Great. Thanks. Maybe, John, just to summarize and think about relative to three months back, I guess how would you rank changes on the macro front and similarly on NIKE execution, that impacted the change in your 2025 outlook today relative to three months ago? And then, Matt, just on the gross margin, could you just help break apart maybe the puts and takes to consider over the course of '25 and how best to model the cadence from a gross margin perspective?

Question: Lorraine Hutchinson - BofA Global Research - Analyst : Thank you. Good afternoon. Can you provide some numbers that might help us to confidence in the meaningful second half improvement how much less of a headwind is there from sunsetting some of these franchises? How do total order books look? And anything you can provide numerically that helped you to get to that back half improvement?

Question: Robert Drbul - Guggenheim Securities LLC - Analyst : Hi. Just two questions for me. I guess the first one is, when you look at the visibility of the business, I think, in some of your answers to Lorraine's questions, when you look at the visibility of the business, today with the shifts that are occurring, can you just talk about how you feel looking at that versus what you saw over the last 12 and 24 months, just in terms of your ability to predict? And then I guess the second piece of this is, when you look at the channel shift that is going on wholesale to direct or bricks and mortar and the digital pieces of the business, can you just give us any more framework around how to think about the P&L impacts at a higher level?

Question: Adrienne Yih - Barclays - Analyst : Great. Thank you very much. I was wondering if you can talk about the amount of newness that is coming down the pipeline over the next 6 months to 12 months. Has there been another time when NIKE has historically launched this magnitude of newness? And how do you read the second degree of the consumer, or is it going into the wholesale channel first, how do you read the success of that at the end consumer as it goes to the wholesale pipeline? Thank you.

Question: Brooke Roach - Goldman Sachs - Analyst : Good afternoon and thank you for taking our question. I wanted to follow up on Adrienne's question and your comment about the franchise management that you're focused on for FY25, can you contextualize the importance of these larger classic franchises in relation to NIKE's current sales in comparison to historical averages? Do you expect to be remixed to typical franchise penetration rates by the end of the year as you scale these new innovations? And then perhaps a follow-up for Matt, can you provide some additional color on how you're thinking about the gross margin bridge and the tailwinds that you expect from input costs and pricing relative to some of the headwinds that you see? Thank you.

Question: Michael Binetti - Evercore ISI - Analyst : Hey, guys. Thanks for taking our question here and thanks for all the details with regards to '25. I guess as we look beyond '25, you've given us a work where I hear you've got a lot of work you're going to do here, you'll have classics cleaner, you'll have the channel mix more stable, you'll have the innovation working, can you just help us think about within a historical context in the past? I think you spoke to a NIKE that could grow high single digits. But I think in the future, wholesale plays more of a role, China maybe doesn't grow what it once did. So a few things like that, that are different than the old world. Maybe you can help us think about what you see as the longer-term opportunity for this business as channels, geos, and franchises come back into alignment? And then I guess just at a bigger picture, we can see the lab is back at work bringing out new technologies on the performance side. But maybe walk us through how you can use innovation and performance and how you can create the halo for lifestyle, which is really just more cyclical product. I'm curious what -- how you guys look at the catalog and how you lean on innovation to try to drive the lifestyle stuff back to growth?

Question: Aneesha Sherman - Bernstein & Co LLC - Analyst : Thank you. I have a -- start with just a quick follow-up. Matt, you talked about the challenges for the next couple of quarters on product life cycle management. Can you clarify, are you expecting this reset to be done by the end of the fiscal year? So are you expecting to exit FY25 that's a normalized run rate on the top line without the headwind? And then second, I'm curious about where you are on the organizational reset and shifting of the cost base. How much of that $2 billion cost reallocation do you expect to be done with by the end of the fiscal year? Is it going to be front loaded? Or is it going to be spread after the next couple of years? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 27, 2024 / 9:00PM, NKE.N - Q4 2024 Nike Inc Earnings Call