No bad stock

NIKE, Inc.
CEO : Mr. John J. Donahoe II

Quarterly earnings growth(YoY,%)

John Donahoe says,

Running Segment

• NIKE has divided the running segment into three categories based on consumer insights: Racing, Trail, and Road Racing.
• The company dominates the Race Day with the NEXT% platform.
• The Peg Trail 4 and other innovative models are gaining market share in the Trail segment.
• The Invincible 3, a recently launched product, was well-received in all four geographies across channels, and will have a significant impact on the company’s earnings in the coming quarters and years.
• The company will upgrade the other five road running models in the next six to 12 months, incorporating the innovations from the racing platform.

Basketball Portfolio

• NIKE’s signature portfolio is refreshed and has never been stronger, with a variety of new next-gen stars.
• The company plans to continue driving the basketball portfolio through the marketplace in the next six to 12 months.
• The GT Series will have significant updates in each of the run, cut, and jump.

Women’s Segment

• NIKE is encouraged by the early market reception of Go and Zenvy Leggings, and Alate bras.
• Several hundred global leaders are planning the spring ’24 season, and the innovation pipeline’s breadth and depth are strong.
• NIKE’s teams returning to the office, combined with consumer insights driving product innovation, storytelling, and marketplace, are picking up steam.

Matthew Friend says,

Inventory Management

• The company has made significant progress in managing its inventory.
• The brand momentum has helped sustain it through the holiday season and into the spring.
• The company is confident that it will exit fiscal year 2023 with healthy inventory levels across channels in the market.
• The company expects to exit with even leaner inventory than anticipated, given the momentum it is seeing.

Gross Margins and Fiscal Year 2024

• The company has been experiencing 350 basis points of transitory cost headwinds in its gross margins over the past two years due to elevated ocean freight and logistics and promotions required to move through excess and early arriving inventory.
• The transitory headwinds are expected to recover in fiscal year 2024.
• The company will provide specific guidance on the recovery next quarter.

Q & A sessions,

Revenue Guidance and Growth

• NKE’s updated revenue guidance for FY23 is high single-digit growth.
• The Q4 outlook is higher than the previous 2 quarters.
• Revenue growth has been driven by the higher mix of business through digital and direct channels.

Expense Management

• NKE has managed expense growth tightly by prioritizing investments in its consumer-led digital transformation and reducing planned headcount growth.
• The company has been managing product pricing and margin, with a focus on driving profitable growth.

Inventory Management

• NKE has made progress against excess and early rising inventory.
• The company is seeing timing of delivery of current season product go up significantly versus prior quarters and now starting to rival the levels of deliveries that were seen pre-pandemic.

China Market Momentum

• NKE feels good about its momentum in China, driven by the fundamentals of the market, such as sport and wellness being a key trend and tailwind and a desire for innovation and style.
• The company’s product innovation is resonating with the Chinese consumer, and the brand strength is growing.

Connected Membership

• NKE’s whole marketplace strategy is to allow consumers to get what they want when they want, how they want it across its own digital, retail, and wholesale partners.
• The membership program is 150 million active members, and the company is developing personalized experiences for shared NKE and partner members.