Tag Archives: NKE

Nike FY 1Q18 Earnings Call Notes

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Trevor Edwards

Continue to see incredible results in China

“Finally, in Greater China, we continue to see incredible results with revenue growing double digits for the quarter. The breadth and depth of our relationship with the Chinese consumer doesn’t just continue our success in this geography, it accelerates it.”

Andy Campion

Ramping up investment in digital capabilities

“Finally, as we target doubling our direct connection to consumers, we are ramping up investment in digital capabilities ranging from data science and analytics to machine learning to augmented reality to image recognition and personalization. We will continue to use our unrivalled resources to ensure that NIKE is built to win now and for the long-term.”

Accelerating direct to consumer business

“So our measure of success in North America in fiscal year 2018 will primarily center around accelerating our direct-to-consumer businesses, and also accelerating the work that we’re doing with our strategic partners to reshape the broader marketplace. But given all of these dynamics just one quarter into the year, it’s unclear and I wouldn’t say precisely where North America will end for the full fiscal year.”

Focus on increasing manufacturing speed

“But let me just say that the obsession or the fixation we’ve had on the opportunities around man rev continue to be a central point for us, but we are seeing the effect on the bottom line as well, product cost reductions, more efficiencies in manufacturing we’re taking that to scale, and then we’re seeing some of those really showing up in our cost reduction or product cost reductions as well. And then a lot of this has to do with our Speed initiative, our 2X Speed. So the investments we’re making in manufacturing revolution are really helping to support our Express Lane efforts. So there’s a cost benefit, but there’s also a speed to market benefit. And we’re looking at optimizing both directly and then obviously through our relationships with partners like Flex.”

Nike FY 3Q17 Earnings Call Notes

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Mark Parker – President and CEO

Digital is the foundation fo the shopping experience

“The consumer has decided digital isn’t a just part of the shopping experience. Digital is the foundation of it. This and other factors have shifted consumer patterns, especially in North America, impacting traffic, the economics of brick-and-mortar retail and is driving a more promotional environment in the near term.”

2x increases in innovation, speed and direct contact

“To see consumers rising expectations, we’re driving fundamental change in three core areas of our business, through the innovation that inspires them, the supply chain that delivers it quickly and in the marketplace, where we connect personally, with consumers. And while we continue to see great success against all three areas, we committed to doubling our impact in each of them. We call it our triple double. So what do I mean by that? In products, we’re doubling our cadence and scale of innovation through performance and sports style. Throughout our supply chain, we are doubling our speed, from product insight to delivery to the consumer, and in the marketplace, we’re doubling our direct connections with consumers through digital membership and personalization. To win now and create the future, we’re obsessing these three areas, 2X innovation, 2X speed and 2X direct”

The retail landscape is not in a steady state

“The retail landscape is particularly in the U.S. is not – is in a steady state. I think that’s obvious, undergoing some significant shifts. And those shifts really create some big opportunities and some challenges at the same time. I think the important thing to point out is that these changes are really being driven by the consumer, and consumer demand at the same time remains quite strong. But we know that consumer expectations are quite high in terms of product, the type of product they want, the innovation, the style. They want the product fast, they want it easy, they want personal service. So these are all things that are driving some of these shifts in the marketplace. And that’s why we’re focused on doubling the output or the cadence of innovation or speed to market so we can be that much more responsive to consumer needs, deliver innovation more quickly, and then doubling our direct connection, to consumers in the marketplace, using or leveraging the power of digital.”

Nike (NKE) Q1 2017 Earnings Call

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Nike (NKE) CEO Mark Parker said fashion trends are currently smiling upon them as individuals continue to buy activewear

“The activewear market continues to outpace the overall apparel and footwear market, which itself continues to outpace global GDP growth.”

Nike (NKE) CEO Mark Parker said athletes wearing the company’s gear dominated the Olympics 

“Everywhere you looked in Rio, you could feel NIKE’s support of the athlete. Over 1,500 Olympians from 60 countries won 189 metals wearing our latest innovations. If NIKE were a country, we would have stood atop the medal count leaderboard.”

E-commerce was a massive driver of growth

“On a constant currency basis, DTC revenue for Q1 was up 22% with the Nike.com business leading the way at 49% growth.”

Basketball player Lebron James’ shoes continue to sell well even in Asia

“LeBron continues to build after his incredible dominance in the Playoffs and his very successful visit to China. And the LeBron Soldier 10 is seeing very strong sell-through in the United States and China, our two largest basketball markets.”

The Chinese are hungry for more American basketball players shoes

“And finally, in Greater China, we continue to see great results with revenue growing 21% for the quarter. We are leveraging consumer sports moments such as the Olympics and the athlete visits by LeBron, KD and Russell Westbrook this summer.”

China passed the United States as the largest retail market

“Just recently, the China retail market became the world’s largest market eclipse than the United States.”

Focused on shorter product cycles

“For us, this is about getting product to the consumer faster, it’s about lowering our product cost as we talked about, really trying to drive greater labor productivity, less waste in the system, new design capabilities.”

Automation is delivering tangible savings across the enterprise 

“The tangible results that we’re seeing today are primarily driven by automation and being closer to market. In terms of automation specifically, we’re seeing greater yield in terms of our use of materials. So less waste means lower cost and we’re also improving the throughput in our manufacturing lines; in other words, improving labor productivity. I guess in short I’d say we’re increasingly confident the Manufacturing Revolution now across both footwear and apparel will have a significant impact on both revenue and margin long term. And as you know, as you start to see returns on your investment that starts to build momentum. So we remain bullish on that opportunity.”

Nike FY 1Q17 Earnings Call Notes

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NIKE’s (NKE) CEO Mark Parker on Q1 2017 Results

Manufacturing revolution

“In Q1, we took major leaps toward those long-term goals, especially in the promise of personalized performance. Our connection to the consumer through Nike+ is core to that vision. But equally important is disrupting the business model that supports it or as we like to call it, our Manufacturing Revolution or Man Rev. Through our acceleration of Man Rev, we’re currently seeing the benefit to product cost optimizations. At the same time, we’re building capabilities for increased speed to market.”

Computational design

“Beyond that, one of the most exciting opportunities for Man Rev is within design. We’re continuing to scale our transition from cut and sow where precision is at the stitch level to digital design where precision is at the pixel level. We’re leveraging the power of computational design that uses algorithms to create highly tunable innovations very quickly. This summer in Rio, athletes such as Allyson Felix, Elaine Thompson and Mo Farah claimed gold wearing our latest track spikes. Each were developed using computational design, 3-D printing and Selective Laser Sintering, which allowed us to create and refine prototypes in hours instead of months and aligned with the athlete’s specific training programs and competitive needs.”

Sport and innovation have always been the two most powerful drivers of culture and style

” I’ll just back up and say though that sport in general and innovation have always been and I think always will be two of the most powerful drivers of culture and style. NIKE always – we’ve always started with the athlete. That’s how we create the insight to drive innovative product and then we amplify that across the portfolio, and sportswear is really important means of doing that. We see tremendous growth in all areas, specifically in both dimensions of performance and sportswear.”

The intersection between performance and style is stronger than ever

“That intersection between performance and style I think is stronger than ever. And by the way, innovation is a huge part of creating a new esthetic and lifestyle product does prioritize I think at this stage with the consumer comfort and lightweight and breathability. So performance is really an element of sportswear for NIKE and that’s what helps to separate and distinguish NIKE in the marketplace.”

Inflection in manufacturing revolution is about taking this to scale

“Well, we’re actually starting to take some of this innovation to scale. I think that’s the short answer. For us, this is about getting product to the consumer faster, it’s about lowering our product cost as we talked about, really trying to drive greater labor productivity, less waste in the system, new design capabilities. These are all parts of Man Rev. I think though the difference, the inflection point that you mentioned, is really more about taking it to scale.”

Trevor Edwards

China has become largest market

“Just recently, the China retail market became the world’s largest market eclipse than the United States. And with our impressive growth there, we continue to feel confident about the successful strategies we are executing. We are leading with digital where we’re seeing incredible growth in our Nike.com business, as we continue to innovate with a focus on mobile. And we are leveraging the best practices from China across our global portfolio.”

Nike (NKE) Q4 2016 Earnings Call Transcript

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Nike (NKE) CEO Mark Parker said the company is benefitting from the secular trend of individuals buying more athletic related apparel

“But NIKE wins because we just don’t adapt to these forces, we create and shape the change. We lead. For example, we are all seeing the growing power of sports. Participation is increasing all over the world. People are leading healthier, more active lives. At the same time, the rise in sport culture is bringing fitness and style together. Profoundly influencing what we all wear everyday.”
 
Nike (NKE) President Trevor Edwards called out Western Europe as a geographical area of particular strength 
“Now let’s turn to Western Europe where we’ve seen broad based demand with growth of 19% in the quarter and 14% for the year. Growth in the quarter and throughout the year was fueled by our continued efforts to transform the marketplace along the category offense. In Q4, all territories grew double digits and all key categories grew led by Sportswear, Global Football, Jordan Brand and Running.”

Nike (NKE) CFO Andy Campion emphasized the strength of the brand
“NIKE is the number rated brand by consumers in every major market and every key city around the world. From China to Europe and of course here in North America. That is perhaps the most important metric that I’ll speak to you on this call. Because it is bestowed upon us by the consumers that we serve and it must be earned. NIKE Brand leadership with consumers is fueled by our authentic and relentless obsession with bringing inspiration and innovation to every athlete in the world.”
Nike (NKE) CFO Andy Campion said demand for athletic wear it outperforming
“Globally consumer demand for athletic footwear and apparel is outpacing broader consumption. At the same time, the retail landscape is rapidly evolving.”
Nike (NKE) CFO Andy Campion said Brazil is still economically challenged
“Revenue in Brazil declined due to the challenging macroeconomic environment, however, our brand is strong in Brazil, our inventories are healthy and we continue to take share.”

Nike (NKE) CFO Andy Campion Interview

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Nike (NKE) CFO Andy Campion says the key ingredient to business success is a high performing team

“You’ve probably heard the phrase ‘it’s business, it’s not personal.’  That phrase makes absolutely no sense.  It’s a cliche that everyone uses.  It’s sort of absurd when you think about it, people actually are the ingredient to creating amazing results in business.  The reality is that it is business AND it’s personal.  You need to understand what motivates your team and how you can deliver on that.  You need to understand what people value, what their strengths are, and how you can enable them put their strength to use.  As a leader, you need to develop a personal relationship with your team.  As a leader, you’ve got to push yourself to develop those personal relationships.  And there’s something that’s even a little more powerful, what’s more powerful is when you push yourself to share that same dimension about yourself with the team.  When you’ve got members of the team that have a deep understanding of what motivates you.  And when you do that, the results are phenomenal, you get to a level of understanding and trust amongst your team which drives you to results even faster than you imagine.”

 

 

Source: Video Interview https://www.youtube.com/watch?v=JFlttbCGCFo

Nike (NKE) Founder and Former CEO Phil Knight Interview

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Nike (NKE) Founder and Former CEO Phil Knight said the company is not a shoe manufacturer

“Nike is more than a shoe company.  It’s a company that provides inspiration and innovation for every athlete in the world.”

Nike (NKE) Founder and Former CEO Phil Knight on winning versus losing

“I hate to lose, it’s not about winning so much.  It’s a tough emotion.  I take losses personally.  They affect me.”

Nike (NKE) Founder and Former CEO Phil Knight on why he’s leaving the company later this year

“I think it’s alot better to step down as Chairman or an officer of a company two years too early rather than two years to late.  But I’ll still be around.  I’m keeping my office there.”

 

 

Source: https://charlierose.com/videos/28031

Nike Earnings Call Transcript Q3 2016 Earnings Call Transcript

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Nike (NKE) CEO Mark Parker said they are seeing business strength in China & Western Europe

“we’re seeing strong growth in China and Western Europe as well as in our global women’s business and the Running category. We are creating deeper and more meaningful connections with our consumers through all of our dimensions from competition to training to sportswear.”

Selling their products over their website is seeing explosive growth

“For Q3 NIKE.com delivered another impressive quarter with growth at 56% fueled by growth in both traffic and conversion. NIKE.com allows us to expand our brand and deepen our relationships in new markets. We continue to add new countries every quarter to our NIKE.com platform and its driving growth around the world.”

Nike (NKE) President Trevor Edwards emphasized China as a growth engine of the business amidst unprecedented demand

“Finally, Greater China, which continues to see strong marketplace momentum and very healthy growth despite macroeconomic uncertainty. China grew an incredible 27% this quarter, fueled in part by the continued strength of the NIKE Brand. The success we’re seeing in China today stems from decisions we made to align our teams against the biggest opportunities, driving growth in key categories of sportswear, Running, Jordan, and Nike basketball. We are seeing incredibly strong growth in DTC with NIKE.com leading the way.  Demand during the Chinese New Year surpassed anything we’ve ever seen before, and we operated with sharp precision to drive conversion to capitalize on that demand across all of our DTC dimensions.  Our brand and business in China have never been stronger. And we continue to build momentum. That’s not by accident.”

Nike FY 2Q16 Earnings Call Notes

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http://seekingalpha.com/insight/earnings-center/article/3772726-nikes-nke-ceo-mark-parker-on-q2-2016-results-earnings-call-transcript

Mark Parker

China had an incredible quarter

“in China specifically, as you recall, we spent time resetting the marketplace and we are now seeing the results of that reset really take place. They had an incredible quarter. I was actually just recently there. We are seeing just great growth across the Sportswear, the Running, the Basketball business, the dotcom business is doing exceptionally well.”

Still have excess inventory from West Coast port shutdown

“Overall, the excess inventory in North America is really current fresh product and the largest portion of that really stems from the residual impact of the West Coast port congestion earlier this year. And it really consists of basically part of that was delayed. We proactively delayed some products in favor of priority products that we felt that would actually work well in the marketplace.’

Excess inventory should be liquidated at factory stores

“we expect that more of our inventory would be liquidated to our factory stores. Like we have said, we have got a robust network and we continue to feel very positive about the demand in the marketplace for the brand. And so for those consumers looking for a value occasion, we think we are providing great value at this – particularly with the recency of some of these products.”

Nike FY 1Q16 Earnings Call Notes

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New CFO

” Before I move into a discussion on our business, I want to take a moment to introduce our new Chief Financial Officer Andy Campion. As you know, Don Blair retired from the CFO role as of July 31. ”

14% currency neutral revenue growth. 23% EPS growth

“NIKE Inc. revenues grew 5% to $8.4 billion, despite significant FX headwinds. On a currency neutral basis, NIKE Inc. revenues grew 14%. Gross margin expanded 90 basis points to 47.5% and earnings per share increased 23% to $1.34.”

Ecommerce revenue up 46%

“revenue for e-commerce business. It’s up an incredible 46% on a constant currency basis, with robust growth across all of our geographies”

Relentless focus on innovation

” Our obsession with speed has driven us for years, so we never settle, always looking to shave off that extra second. This relentless focus on innovation can be seen in the momentum of our Zoom Air technology”

Mindful of economic volatility in China, but focused on what we can control

“the brand in China is extremely strong. And that’s a piece that we have known for a while. As we went through the reset strategy, we wanted to be really focused on how to make sure that we could drive the Business. So, we’re very mindful of the macroeconomic volatility in the marketplace. But we continue to really focus on the things that we can control which is how we continue to bring excitement to the marketplace and also continue to align the marketplace around our category offense and we’re seeing success from that perspective.”

Inventory still elevated thanks to port issue

“demand for our products continues to be very strong in the marketplace. What we’re working through is the impact of the west coast port congestion from earlier this year. And what we have done is we have seen the actual flow of product from the port normalize. At the same time, we’re working to efficiently clear the excess inventory to keep the in-line channel healthy.”

Europe is an example of complete offense working

“I will just quickly add, we’re seeing incredible brand strength, too, across the major cities across Europe. And I think that is helping as well. The product that we’ve been introducing to the market has resonated — sell-throughs are strong. Western Europe is a great example of a complete offense, not just the category offense working, but the complete offense. So, we really feel good about executing across the categories up and down the price point spectrum and across the major channels as well. e-commerce”

The Jordan brand can transcend basketball

“I want to add, Jordan is a tremendous brand globally. It’s not just a subset of NIKE basketball. It’s a stand-alone brand with tremendous potential to resonate beyond basketball as a category. So, it’s largely been basketball-based and that will always be the core of the Jordan brand. With that though, we see tremendous opportunity to expand that brand, not just here in North America, but around the world.”

The Olympics are great for the world, but especially for Nike

“Clearly, the Olympics are a great sport moment for the world, but certainly for NIKE. These global events at this scale, the Olympics and the World Cup really stand above and beyond all sports events. And for us, there’s an opportunity to really bring our best product, the best innovation, our best storytelling out, serve the athletes at the highest level.”