A：Paul Tressel, VP of corporate finance and treasurer, is leading the conference call. Also on the call are Nike Inc president and CEO Elliott, CFO Matt Fre, and other team members.

A：Nike provides non GAAP financial measures and nonpublic financial and statistical information. Participants are directed to refer to Nike's earnings press release or Nike's website for comparable measures and quantities.

A：The key priorities of Nike's 'Win Now' actions include focusing the team on culture, product, brand, marketing, marketplace, and ground game.

A：The 'sport offense' is a new formation and way of working that aligns Nike's 3 brands (Nike, Jordan, and C) into more nimble, focused teams by sport. It is important for gaining sharper insights to fuel innovation, storytelling, and connecting with each sport's community in a more meaningful way.

A：The sport offense is designed to maximize Nike Inc's complete portfolio, drive growth across all dimensions, and serve athletes across sports with distinct brands in retail channels at every price point, which is an advantage not shared by other companies in the industry.

A：Recent innovations in the running business include the redesign of the Air Zoom and Pegasus to address runner insights and the introduction of new footwear styles each season using industry leading innovation platforms like Nike Zoom X and React X. The plan for expansion includes applying these benefits to more sports and sport culture, such as global football, basketball training, and sportswear.

A：The strategy for global football includes preparing for the energy of upcoming events like the World Cup, moving forward with the debut of new apparel innovation platforms, and launching football streetwear collections to connect with a younger consumer. This strategy also involves reinvigorating the football brand identity with campaigns like 'scary good' and utilizing major sports days to debut new products.

A：Nike is addressing new market opportunities by bringing creativity to these spaces to take design risks, be innovative, and irreverent. Recent accomplishments include the launch of an elite ACG race team, a breathable apparel innovation platform called Radical Air, and a trail tuned supershuttle with the ACG Ultrafly ACG Professional Racer Caleb Olenski, who won the Western States 100 race.

A：The partnership with Scams is about creating performance training products with a different look by combining Nike's innovation expertise with inclusive apparel. This has the potential to create more dimension around established sports. The product line debuted with 58 silhouettes and received strong consumer response.

A：During the US Open, Nike celebrated wins and encore appearances from players like Alcaraz and Sava lanca. They designed custom dresses for Naomi's comeback and for Sharapova's induction into the Tennis Hall of Fame. They also launched a retro version of Agassi's Tech Challenge sneakers and created an immersive tennis experience in the New York House of Innovation.

A：Nike's priorities in sports performance include elevating the market with actions that connect athlete performances to commercial offerings. In sportswear, the company is working to refine its product construct to better serve consumers, evidenced by ongoing business declines indicating the need for improvement.

A：Investments in North America led to significant progress, with the team providing more consumers access to the brand in premium environments. Over 1300 running spaces were reset, and the launch of the Nike brand store on Amazon drove stronger engagement and sales.

A：Nike is facing structural challenges in the Greater China market, leading to a decrease in business. The company is committed to growth in China, focusing on sport and innovation with products like the Vimeo Ridge and the Jordan Game shoe. They plan to develop consistent plans across all sports and retail environments, taking investment and time.

A：Nike Digital is working towards less reliance on classic franchises and pullback on promotions for long-term brand health. They are focusing on the right assortment and marketing mix to bring consumers back to the digital ecosystem, facing the challenge of varying recovery timelines across sports and countries.

A：The leadership team is grounded in the belief that the wind now actions are the right focus for the company, despite the cautious consumer environment and teams settling into new roles. They recognize the company has much to prove but are confident due to focus on the athlete and creative marketplace approaches.

A：Nike reported that revenues were up slightly, with direct down significantly and wholesale up. Gross margins declined due to higher wholesale discounts and other factors. Income from operations was down, with a decrease in brand marketing expense and flat operating overhead. The effective tax rate increased, and earnings per share were 49 cents. Inventory decreased, and the company is progressing towards a healthy marketplace.

A：The growth in the wholesale segment was attributed to shipment timing in the prior year and higher liquidation volume to value channels. Additionally, the strategic actions taken to expand distribution and reach new consumer segments were mentioned as contributors to growth.

A：In the first quarter, North America experienced unit sales decline while dollar sales were flat, primarily due to new US tariffs. Closeout mix is approaching normalized levels and Q1 revenue grew by 1% despite Nike Direct declining 6% with Nike Digital down 13% and Nike stores up 1%. Wholesale grew 4%. EBIT declined 7% on a reported basis.

A：Nike has largely cleaned the marketplace in EMEA, and momentum is building in sport and with wholesale partners. Nike Digital is being repositioned as a full price business, although traffic and demand remained soft in Q1. The performance business built momentum with double digit growth in running and low single digit growth in global football and training footwear, while sportswear declined low single digits.

A：Greater China saw Q1 revenue decline by 10% with Nike Direct down 12% and EBIT down 25% on a reported basis. The company is responding by creating energy with consumers through new product innovation and athlete activations, reducing owned and partner inventory, and focusing on improving seasonal sell-through trends through refreshing store concepts, better merchandising, and reducing the mix of inventory.

A：In APLAG-1, revenue grew 1%, but Nike Direct declined 6% with Nike Digital down and Nike stores down. Wholesale grew 1%. EBIT declined 13%. To address challenges, Nike is implementing additional discounts on Nike Direct and focusing on rebalancing inventory levels with retail sales trends in certain countries and reducing Titan buys.

A：The newly issued tariffs are increasing costs for Nike, with the gross incremental cost estimated to be $1.1 billion annually, up from the previously shared $1 billion. The net headwind to gross margin is expected to increase from approximately 75 basis points to 120 basis points. Nike continues to evaluate and implement actions to mitigate these new costs.

A：The outlook for Q2 revenues is a decrease of low single digits, with a one point benefit from foreign exchange. Q2 gross margins are expected to decline approximately 3 to 3.5 basis points, with a net headwind of 175 basis points from new incremental tariffs. Expenses and interest income are expected to be between $400 million and $500 million, and the tax rate is anticipated to be in the low teens range due to changes in earnings mix.

A：The wholesale business is expected to return to modest growth in fiscal 26, supported by a stronger spring order book with growth led by sport. The repositioning of Nike Digital is also a contributing factor. However, Nike Direct is not expected to return to growth in fiscal 26 due to continued organic traffic decline.

A：Momentum in wholesale and the continued repositioning of Nike Digital are expected to influence revenue growth. North America is leading the global recovery, while Greater China requires more time due to unique market dynamics. Converse is resetting its marketplace and brand under new leadership. Foreign exchange is becoming a tailwind to reported revenue but is expected to have minimal benefit to gross margin.

A：The expectations for SGN growth in fiscal 26 are to grow low single digits.

A：The significance of the special sport moment described is the representation of the power of a unified team with a singular mission, specifically referencing the England women's football team's victory at the UEFA Women's European Championships.

A：In the football tournament final, England faced challenges as they started slowly, went into halftime down 1-0, and were on their heels instead of attacking. However, they made a comeback with the right substitutions, leading to the equalizer in regulation and eventually winning in a shootout.

A：The victory of the England team had a positive impact on Nike, as they built a campaign around the importance of home, and the team's pride and achievements were celebrated across various platforms, reinforcing the lessons of passion, commitment, and resilience within the company.

A：The progress made in the sportswear category is positive, with a focus on a sharp, sport-led approach. The learnings from the success in running are being applied to other areas such as global football, training, and basketball, as part of the company's strategy to run the playbook against these segments.

A：Nike's spring order book is up year over year, which indicates a positive performance in product and marketing efforts, and a more thoughtful and integrated marketplace response.

A：The outlook for margins has moderated due to new tariff rates and their impact on the business, as well as the timeline to return to profitable growth in greater China and converse. However, the company continues to believe that double-digit margins are achievable and is clear on the path to get there, which includes reigniting organic growth, improving the full price mix of the business, and driving operating leverage on supply chain costs, retail overhead, and general operating overhead.

A：The company's teams and product and brand marketing are closely monitoring consumers around the world, looking for signals, staying close with partners, and evaluating their own door and Diesel performance across geos and countries. They are also focused on inspiring through sport and on delivering innovative product and emotional storytelling across the integrated marketplace.

A：The performance in the first quarter was not related to pull-forwards because the increase in wholesale growth in North America was due to shipping more of the fall season product in Q1 compared to the prior year's Q1, which created a timing benefit year on year.

A：Guiding revenue down low single digits in the second quarter is attributed to Nike Digital facing a more significant headwind due to reduced promotional activity from the Win Now actions and expecting only one point of FX benefit in Q2 versus two points in Q1. The actions taken on the Dunk are also contributing to a more significant comparison in Q2 versus Q1.

A：In early September, the organization was flipped to be aligned on the product creation side and the brand marketing side by brand, sport, and country, as well as account, wholesale, digital, and physical channels. The intended purpose of these changes is to have small cross-functional teams gain insights from athletes or consumers in each segment, which will help drive competitiveness and strengthen consumer connectivity.

A：The challenges faced in the Nike Digital business include strategic reductions in promotion and other factors impacting growth. The strategies in place involve elevating and growing the entire marketplace, not just digital commerce, and focusing on innovative, relentless product flow across various sports and business segments. Sharp consumer engagement in each location (digital or physical) drives consumer assortment and profitable growth for Nike and its partners.

A：Recent strategic actions are expected to lead to a healthy and more profitable part of the business for direct digital commerce in the future. These actions include reducing promotional days, improving markdown rates, reducing certain types of business such as classic show and launch share, and pulling back on paid media, which has been contributing to bottom-of-funnel traffic. Some progress has been made, especially in EMEA and North America, and while direct digital is not expected to return to growth in the current fiscal year, it is anticipated to be a better-performing and profitable part of the business in the future.

A：In China, strategies to improve the digital business include focusing on sport leadership, innovative products, specific sports like running, training, basketball, especially outdoor basketball and football, and leveraging local athletes and events. The approach also involves using local products and storytelling. The physical marketplace is focused on operational strength, such as proper assortment, presentation, and service in physical stores. Cost investments have been made to clean up inventory and set the foundation for success, but improvements in sell-through rates are needed to achieve a healthy operating model. As a result, China is expected to continue being a headwind on the top line and margin for the remainder of fiscal year 26.

A：Inventory in the wholesale channel is being managed with an eye on improving sell-through rates to ensure that partners have the capacity for newness and innovation. The forward-looking order book is a positive indicator of progress as both partners and the company work together to move through inventory. Improvements within the wholesale channel and a focus on reducing partner inventory are expected to lead to gross margin benefits in the second half of the fiscal year. However, there are headwinds to gross margin in the second half that may mitigate this improvement.

A：The overall approach to managing the marketplace involves organizing the company into smaller cross-functional teams by brand, sport, country, and channel (wholesale and direct, digital and physical) to drive deeper consumer connections and profitable, sustainable growth. This strategy is part of the 'Win Now' actions that are considered the right path forward, and progress is expected to be nonlinear in certain areas such as sportswear, Nike Direct, Greater China, and Converse.