A：For the first quarter of fiscal 2027, Nike's results were in line with expectations. Revenue was within the range, gross margin improved as guided, and costs were managed with discipline. The sport offense is driving results.

A：The Nike performance business is not yet large enough to offset the pressure seen in Nike Sportswear, Jordan Brand, and Greater China. The company is taking deliberate actions to strengthen these businesses, but the full benefit of these efforts will take time.

A：Nike is transforming its operating model to scale the success of the sport offense across the company. This involves organizing sportswear into smaller areas of focus to create a more diverse product portfolio and a more differentiated marketplace, similar to how the performance business is organized.

A：Strategic actions include reducing the volume and frequency of specific Jordan Retro launches to maintain the special and earned perception of the Jordan brand, as well as an initiative to clean up the digital side of the market in Greater China by eliminating distribution through non-aligned channels and focusing on fewer, higher quality experiences through official flagships.

A：The financial results in the reported quarter were impacted by benefits from supply chain cost management efforts and favorable foreign exchange (FX) tailwinds, partially offset by increased discounts and changes in the channel mix. The team's strong discipline on expenses and investments in demand creation related to the World Cup also played a role.

A：The company ended the quarter in a net cash position with $8.4 billion in cash and short-term investments, with leverage at roughly two times. It remains disciplined in capital allocation, prioritizing investments that strengthen the business and improve returns over time. In the quarter, approximately $600 million was returned to shareholders through dividends, and the dividend is a significant priority in the company's capital allocation strategy.

A：The company is implementing a program called 'Pace' to improve the way and speed of work, to make better market decisions, and to focus on areas important to consumers and athletes. Pace aims to enhance productivity and drive a lower cost base, with an expected $2.5 billion in savings for Nike. Part of the savings will be reinvested back into the business, and the cost to implement Pace will be approximately $1 billion, along with $300 million in severance-related costs.

A：The company expects a decline in EBIT as a percentage of revenue, cost associated with lower revenue levels, and higher input costs, but this will be partially offset by disciplined expense management. They expect to control management, increase full price realization, and strengthen sourcing and supply chain execution. The projected decline in SGMA is year-over-year, and they plan to reinvest in consumer product innovation and long-term growth opportunities. The expected range for adjusted earnings per share for fiscal 27 is $1.15 to $1.35, excluding approximately 15 cents of impact from the Pace program.

A：The company is making deliberate choices to improve the health of businesses like Nike Sportswear and the Jordan brand in Greater China. These actions include supply adjustments to support a healthy market environment and stronger full-price realization, which are expected to create pressure on revenue records for the remainder of fiscal 27 and into fiscal 28.

A：The outlook for profitability indicates a decline in EBIT as a percentage of revenue, higher input costs, but is partially offset by disciplined expense management. The company aims to control expenses, increase full price realization, strengthen sourcing and supply chain execution, and manage the cost structure. SGMA is expected to remain down year-over-year, focusing on improving efficiencies, simplifying operations, and increasing productivity. Adjusted earnings per share are projected to be in the range of $1.15 to $1.35 for fiscal 27.

A：The continued growth of the sport business and performance across all key sports indicate that focusing on distinct consumer segments and aligning the sport offense effectively leads to success for Nike.

A：Innovation is driving the performance growth at Nike, with specific segments such as running training, golf, and the sport office contributing to this success.

A：The performance of the sport business in North America is contributing to overall company growth through broad-based growth across all key sports, with specific regions like running, global football, and basketball leading the charge.

A：Dave is excited about working with the company and is confident in the recent financial performance and guidance provided. He emphasizes a comprehensive business plan review, taking into consideration the realities and risks within the business to ensure a healthy return over the long term.

A：Nike is executing a marketplace reset in China, focusing on becoming a more premium and culturally relevant brand. They are leading with sport to ensure success, as evidenced by the continued growth in running. The company is also cleaning up the marketplace, elevating the consumer experience, and taking actions to improve the digital marketplace and physical retail, such as eliminating unprofitable online distribution and investing in must-win doors with more consistent and elevated experiences.

A：The strategy involves investing in product creation teams on the ground in China to work on future seasons, with the first collection made for China launching in October. The products are designed, developed, and manufactured locally, and there's an emphasis on resetting the marketplace, which is expected to continue pressuring revenue and profitability in the near term.

A：The company expects the China business to worsen from a revenue perspective for the remainder of fiscal year 27 due to actions taken to ensure the business returns to health in the long term. The provided guidance assumes an even more negative impact from revenue perspective in China.

A：For the second quarter, revenues and gross margins are being impacted by a number of factors. The comparison with the prior year, which included significant actions in Europe and North America, is pressuring growth rates. The company is making constructive moves in supply chain and sourcing programs that bolster gross margins in the short term, but discounts and a need to reset the marketplace are dampening margins over time.

A：Mo Bamba was let go to pursue other opportunities. The decision to let him go allows for a focus on other athletes. The new plan for signature basketball involves continuing to dimensionalize the sport, both for men's and women's games, with an emphasis on growth in the women's business. The company is excited about the opportunities in football and is starting to see growth in basketball.

A：The family footwear channel, referred to as core footwear internally, is a cross-sport channel that includes running, basketball, training, and sports wear. It's focused on the $65 to $85 price point and is an opportunity across all performance sports. The teams are focused on driving progress and optimizing the pace in this channel.

A：Nike is looking to optimize the supply chain by building an operating model closer to the athlete, consumer, and marketplace. This includes moving from four to three geographic regions (America, EMEA, and APAC, including China), consolidating resources, and adjusting the workforce size and shape. The goal is to create a stronger Nike in the future and support more profitable and sustainable growth.

A：When the speaker first returned, the main challenges were related to having a better understanding of the pressure points with Jordan, China, and sportswear. These challenges have been addressed by focusing on strengthening the business foundation, building for the long term, and taking deliberate actions to improve performance. This includes repositioning the Jordan brand, enhancing the scarcity model for retro styles, and creating segments focused on distinct consumer groups within sportswear.

A：To improve the sportswear business, the company is breaking it down into segments with a focus on distinct consumer groups to enhance clarity around products, stories, and retail experiences. The Jordan brand is being repositioned with the restoration of the scarcity model for retro styles and is being extended through various sports. In China, the focus is on leading with sport and innovation, taking decisive actions in the marketplace, and building a healthier business over time.

A：The ongoing transformation work is already yielding savings, with improvements seen in P&L starting in the current fiscal year. These savings are expected to ramp up over time, with the maximum benefits to be appreciated in fiscal years 29 and 30.

A：The company considers the dividend a very significant priority and it remains a key component of the capital allocation program. Despite the challenges and the current guidance, there is support for maintaining and ultimately growing the dividend over time. A detailed financial algorithm will be provided in November to help assess the company's performance over the next five years, which will include information on the dividend's role in the capital allocation.