Elliott Hill
President & Chief Executive Officer at NIKE
Thank you, Paul. Good afternoon, everyone. I'll start by saying, I'm proud of the progress we made against the key actions we committed to 90 days ago. While we met the expectations we set, we're not satisfied with our overall results. We can and will be better. For the quarter, the big takeaway for me was clear. When we lead with sport, we create impact for Nike. We told inspiring athletes stories, we brought more energy to sports biggest moments and we introduced performance product across an integrated marketplace.
We delivered something new to the consumer week after week, and that's exactly the kind of sustained pace we need to strengthen our business. Last quarter, I shared my initial observations and where we need to focus. The last 90 days only reinforced my early assessment of the areas that are most important. Since our last call, I continue to meet with wholesale partners to discuss -- to discuss the distinct role each can play with Nike.
I also had an incredibly inspiring trip to visit factory partners and Nike teammates in Asia to see how we're executing in our supply-chain with a focus on production for our new innovation. Most importantly, I continue to spend meaningful time with our Nike teammates. We focused in two areas: strengthening our culture and committing to our top priorities. In fact, right after my first-call with you in December, we met with our teams and shared the five priority actions we outlined on the call. With a sharp focus on five fields of play, three countries and five cities.
We call these strategic priorities win now. We have a clearer picture on our path forward and despite the global economic uncertainty, I believe our priority actions will continue to drive progress. The first action is to ignite our winning culture. As I mentioned, our teams are building momentum. We're hustling and being opportunistics. The next action is shaping our brand for distinction. This is about lining up storytelling power of Nike to celebrate the passion and emotion of sport.
In February, I attended the Super Bowl and the NBA All-Star Weekend to see firsthand the kind of impact we make when we line-up all of our advantages towards one moment. Our third action is to accelerate a complete product portfolio. We're fully committed to creating a more breadth and depth season after season. While we added innovation across our five key fields of play this quarter, it's not enough to offset the continued headwinds of our classic franchises.
Elevate and grow the marketplace, the fourth action is a balanced approach where we're supporting wholesale partners to drive healthy growth and returning Nike Direct to a premium destination. We're in the early stages of repositioning Nike Digital and we're restoring our sales organization and go-to-market processes. The final action, win on-the-ground, is where we celebrate local athletes, make cultural connections and support grassroots roots communities. A big reason for our running product success this quarter was the resources we put into building energy through the ground game.
Of all the priority actions, we knew we could move quickest on investing in our brand. You saw that in several defining moments this quarter. I'll start with the Super Bowl in New Orleans. It was of course, it starts with our close partnership with the NFL and our high-performance uniforms, cleats and gloves that everyone sees on the field. Our product visibility goes well beyond four quarters. From Jalen Hurtz wearing his red and black unbannable Jordan Cletes during warm-ups to Kendrick's halftime show wearing Dion Sanders retros and Serena Williams and wearing Chuck Taylor's our three iconic brands were front and center.
We, of course, also debuted So Win, our first Super Bowl ad in 27 years where we celebrated the winning mindset of the top athletes in the world. We also showed up on-the-ground in New Orleans to support flag football with a sharp focus on girls and a commitment to increasing their participation in the game. We created pop-up retail spaces across the city with partners like, SneakerPolitics and Hibbits, and built Nike and Jordan houses to connect with athletes, influencers, partners, and wholesale retailers. After the win, we followed up with strong reactive campaigns.
The Nike brand created It's Good to be Green for the Eagles win and for MVP, the Jordan brand aired its first Super Bowl ad in history, Love Hurts. That is how we create impact and that is Nike B and Nike. We transitioned from one amazing weekend right into another for the -- NBA All-Star weekend in the Bay Area. Our brands in one word dominated. On both sides of the Bay, Nike, Jordan and Commerce own performance and the culture of the game, connecting with young athletes and fans through unique experiences. Nike celebrated the future of basketball, hosting games with top high-school prep stars.
At the Alameda Navy Yard, the Jordan Fam Fest celebrated the brand's biggest moments for its 40th anniversary with thousands of fans. And Converse unveiled the first signature shoe for Shea Gilgis Alexander, the Shea One designed by Shea himself as the new Creative Director for Converse Basketball. His shoe will launch this fall. All told, Nike Inc. Lit up the marketplace on-the-ground. Our Nike San Francisco flagship store had its best commercial day-in 10 years. And just down the street, we created energy and buzz with our wholesale partners Foot Locker and Shoe Palace.
One thing it was great to see for the right product drops like the Nike Black Label collection, the Kobe Protros, Jordan Red Ones, and Jordan four cements, the passion of sneaker culture is alive. I saw lines down the block all weekend. An important part of our strategy moving forward will be to harness the full power of our portfolio of brands. We made significant progress in elevating the voices and distinct position of our brands at the Super Bowl and All-Star Weekend. Shifting to products.
We're beginning to drive a more diversified portfolio. It will take time to reach the volume to replace the handful of classic franchises we over-indexed on. But our approach is simple. Help consumers fall in love with something new from Nike and that something is not replacing one icon for another, it's about building a Supporting cast of multiple styles, some that are gaining traction with men and others with women's. Segmenting and differentiating our wholesale partners across the integrated marketplace, investing in the presentation of our products at point-of-sale, digital and physical, and having an intentional ground game in influential cities. And we will lead with performance with a disciplined approach that balances product that's seeding with product that's scaling. Running was the standout field of play for the quarter, growing mid-single digits. The PEG 41 is continuing to drive healthy volume in all geos and two innovations that have just begun to see are the Pegasus Premium and the Vomero 18. The PEG Premium is Nike bringing something totally unique to the market, a full visible Air zoom unit that for the first time, we sculpt it to the foot so it springs back for better energy return. It's a great ride and a beautiful looking shoe. Early seed pairs nearly sold-out across the North-America marketplace and the PEG premium will scale through fall '25. This quarter, we launched the Vomero 18 created for the Everyday Runner. We aligned the storytelling of the Vomero 18's big foam and Maximum cushioning across over 1,800 doors in the integrated marketplace, RSG, Sporting Goods, Nike Direct, the results have been outstanding. We plan to build-on the momentum and double the distribution of Vomero 18 by mid-April, supported by a large-scale running campaign. You can expect new additions to the franchise to release in our next fiscal year. In running, we're on the path to meeting our high standards of execution and turning to sportswear, our largest icons, Nike and Jordan Streetwear are in different states of transition. With Air Force One, Dunk and Air Jordan One, it's about rightsizing, not sunsetting. Each franchise will always have a place in our stable of products. They're timeless staples with loyal fans. Our best example of healthy diversification in sportswear footwear right now is our look of running. The 5 doubled its revenue this quarter. Nike Shocks has grown its revenue by over 10 times in the last 3/4. And while in the seeding stage, recently released shoes like the Air Superfly and LD100 are getting a lot of positive interest in the media and on social channels. Air Max, a brand in itself, is a platform that consumers expect us to reinvent. This quarter, we brought fresh energy with the new DNA, which is resonating well with consumers in Japan and Korea and women's silhouette in the Air Max news. Look for another new innovation platform with Air Max in FY '26. Diversifying our sportswear apparel offense is equally important. We want to minimize our reliance on fleece and push the edges to build new businesses, and that doesn't have to fit neatly into the sportswear category either. This quarter's new 24/7 collection brings performance materials to high-style training apparel. The new impossibly soft and perfect stretch fabrics gave us the opportunity to tell a deep technical apparel story. The first month of sales at 24/7 have exceeded our expectations and we're ramping-up capacity to meet the demand. We also made some noise with the announcement of a new brand this quarter, Nike Skills. Together, we identified a consumer need and are creating new -- a new market of style-led product that sculpts and performs. Our first comprehensive collection launches next quarter in North-America through both Nike and direct channels, and we will scale globally over multiple seasons. The apparel space is ripe for fresh-thinking and I've asked our team to keep innovating across the spectrum of performance and style and to seek out white space in the market to complement our brands and product portfolio. Our responsibility is to grow the overall market and one of the most powerful ways we do that is through a relentless flow of coveted and innovative products through our powerful brands in both performance and sportswear for men, women and kids, across footwear, apparel and accessories and up-and-down price points. We're moving with focus and urgency to get back into a rhythm of delivering across all dimensions. The final topic I'd like to discuss in detail is the integrated marketplace, where we create consumer-led experiences across Nike Direct or our wholesale partners, physical or digital. In the almost 190 countries in which we do business, we have over 40,000 points of distribution and a digital business with massive reach. Our footprint is an unbeatable competitive advantage. That means that a lot of change is in motion because we want to be great at all touch points and I'm playing an active role in this one, leveraging my years of experience and relationships in the marketplace. Here's what we're going to prioritize. First, I mentioned we're restoring our sales organization and go-to-market processes. Partnering with Nike must feel like a world-class experience. That means building growth plans together, creating distinct consumer positions and consumer right assortments, engaging way earlier in the process and asking for product feedback, delivering our assortments at the right time, right place and at the right depth, educating their teams on new innovations, providing marketing support and making certain their Nike presentation is premium. So we capitalize on every sale opportunity. In Nike Direct, digital will feel the changes more quickly. We're already reducing the promotional days and discounting at lower rates. In fact, comparing last year's January and February to this year's, Nike Digital in North-America went from over 30 promotional days to zero. In our ecosystem, the consumers are already seeing a more elevated content and storytelling with a greater focus on our performance fields of play. Now that I've had the opportunity to visit each geography, we're clear where we will focus to make an immediate impact. Through our win now strategic priorities, we'll start with three key countries, the United States, China and the United Kingdom and five key cities, New York, Los Angeles, London, Beijing and Shanghai. We'll invest to make sure each has innovative and coveted products, a loud and proud locally relevant brand voice, a consumer-led and balanced integrated marketplace and passionate Nike teammates on-the-ground. Each country has unique dynamics and is in different state of development. China specifically is where we're being the most proactive in cleaning up the marketplace, and we'll get back to inspiring the Chinese consumer in a more meaningful way. To close, our consumers and partners felt a different pace from Nike this quarter. We're off to a solid start. And where we are making progress in our five priority actions, it's mostly through serving athletes. Through the lens of sport and performance, that's exactly where we want to be. The bottom-line is we are looking for opportunity on all fronts. Now, it's up to us to be consistent. Some of the bigger shifts I covered will take multiple seasons of excellent execution. Our teams are moving with focus and urgency and are up to the challenge of writing the next great chapter for Nike. I'll pass it to Matt to provide additional -- initial thoughts on the building blocks to return to sustainable and profitable growth, and I'll be back to close-out the call.
