TTN Summary of 17:00ET Earnings Call: Expect business results to improve from here; Sportswear industry continues to operate under geopolitical and tariff uncertainty; to raise prices this fall to mitigate tariff costs; Holiday order book up in North America, EMEA and APLA (partially offset by Greater China)
Thursday, June 26, 2025 5:06:22 PMEST
- Tariffs: new U.S. levies will add ~$1B of cost this year; expect ~75 bps gross-margin headwind in FY26 (peaking in H1) to be fully mitigated over time via supply-chain reallocation, surgical price increases and partner cost-sharing arrangements.
- Wholesale momentum: holiday order book up in North America, EMEA and APLA (partially offset by Greater China); early partnership wins at DICK’S (24/7 Training), JD (Air Max 95), Urban Outfitters (Gen Z doors) and upcoming Amazon brand store launch in Q1.
- Expect business results to improve as WinNow repositioning actions gain traction following Q4 and FY25 performance below Nike standards
- Execution of five WinNow actions — culture, products, marketing, marketplace and ground game — delivering early benefits
- Strategic focus on three key sports, three core countries and five flagship cities to sharpen brand emphasis
- Rightsizing of Air Force One, Dunk and AJ1 franchises and reinvestment in Nike Digital to restore premium portfolio balance
- Flattened leadership structure with 11 of 15 direct reports replaced to accelerate decision-making
- Transition to cross-functional sport offense teams organizing Nike Jordan, Converse and core brands by sport rather than demographic segments
- Amplified investments in Nike Direct and digital platforms aligned to sport moments and key product launches
- Sharper wholesale segmentation and expanded points of distribution to reach sport-specific consumers across channels
- Leadership’s personal engagement with wholesale partners to reaffirm prioritization and drive profitable, sustainable growth
- Order book improving q/q with holiday orders 'up'
- This fall, Amazon will carry a select assortment of footwear, apparel and accessories and Nike will have a featured brand store on the platform focused on running, training, basketball and sportswear
- FY26 strategic priorities: laser focus on sport and five WinNow actions across five sports in three countries; modest share-repurchase pace; investing in demand creation and commercial offense; leveraging a strong balance sheet to return to sustainable top-line growth and margin recovery.
- Product pipeline accelerating: running up high-single digits with BIVERA 18 topping $100 M in 90 days and new Vomero Premium/Plus drops; women’s basketball +50% FY25; Asia One sold out in 3 minutes; major football boot upgrades and kit innovations slated for 12 months.
- WinNow actions delivered the largest financial impact in Q4; classic-footwear clearance (Air Force One, Dunk, AJ1 down >30% in Q4, ~$1 B headwind) and repositioning Nike Digital to full-price will continue to pressure H1, then moderate as inventory normalizes.
- Sport offense realignment: reorganizing into cross-functional, sport-obsessed teams across Nike, Jordan and Converse; sharper marketplace segmentation (integrated Nike Direct & wholesale channels) to drive differentiated assortments, storytelling and consumer reach.
- Nike Digital down 26% in Q4 (NA –25%, EMEA –36%, China –31%) but showing improving full-price share and lower markdown rates; Nike stores +2% globally; digital traffic to remain down double-digits as the channel shifts to premium.
- Product pipeline accelerating: running up high-single digits with BIVERA 18 topping $100 M in 90 days and new Vomero Premium/Plus drops; women’s basketball +50% FY25; Asia One sold out in 3 minutes; major football boot upgrades and kit innovations slated for 12 months.
- Regional recovery timelines vary: Q4 CNB revenues down NA –11%, EMEA –10%, China –20% (inventory –11%), APLA –3%; Greater China reset slower due to mono-brand model—plan includes store concept refresh, local “Geo Express Lane” storytelling and digital repositioning.
- FY26 strategic priorities: laser focus on sport and five WinNow actions across five sports in three countries; modest share-repurchase pace; investing in demand creation and commercial offense; leveraging a strong balance sheet to return to sustainable top-line growth and margin recovery.
- To begin phased implementation of prices increases during the fall 2025
- Expects gross costs increase of $1.0B due to tariffs; Expect to mitigate costs over time
[CFO]: Traffic remains 'challenged' in China.
- Tariffs represent new and 'meaningful' cost headwind.
- To reduce manufacturing in China to mitigate tariffs.
- Currently source about 16% of US footwear from China
- Have moderated share repurchases in the near term due to the uncertainty
- Over time we absolutely have the ambition to get back to double digit operating margins.
**Reminder May 21st: Said to be raising prices on select items due to tariffs - WWD
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- Wholesale momentum: holiday order book up in North America, EMEA and APLA (partially offset by Greater China); early partnership wins at DICK’S (24/7 Training), JD (Air Max 95), Urban Outfitters (Gen Z doors) and upcoming Amazon brand store launch in Q1.
- Expect business results to improve as WinNow repositioning actions gain traction following Q4 and FY25 performance below Nike standards
- Execution of five WinNow actions — culture, products, marketing, marketplace and ground game — delivering early benefits
- Strategic focus on three key sports, three core countries and five flagship cities to sharpen brand emphasis
- Rightsizing of Air Force One, Dunk and AJ1 franchises and reinvestment in Nike Digital to restore premium portfolio balance
- Flattened leadership structure with 11 of 15 direct reports replaced to accelerate decision-making
- Transition to cross-functional sport offense teams organizing Nike Jordan, Converse and core brands by sport rather than demographic segments
- Amplified investments in Nike Direct and digital platforms aligned to sport moments and key product launches
- Sharper wholesale segmentation and expanded points of distribution to reach sport-specific consumers across channels
- Leadership’s personal engagement with wholesale partners to reaffirm prioritization and drive profitable, sustainable growth
- Order book improving q/q with holiday orders 'up'
- This fall, Amazon will carry a select assortment of footwear, apparel and accessories and Nike will have a featured brand store on the platform focused on running, training, basketball and sportswear
- FY26 strategic priorities: laser focus on sport and five WinNow actions across five sports in three countries; modest share-repurchase pace; investing in demand creation and commercial offense; leveraging a strong balance sheet to return to sustainable top-line growth and margin recovery.
- Product pipeline accelerating: running up high-single digits with BIVERA 18 topping $100 M in 90 days and new Vomero Premium/Plus drops; women’s basketball +50% FY25; Asia One sold out in 3 minutes; major football boot upgrades and kit innovations slated for 12 months.
- WinNow actions delivered the largest financial impact in Q4; classic-footwear clearance (Air Force One, Dunk, AJ1 down >30% in Q4, ~$1 B headwind) and repositioning Nike Digital to full-price will continue to pressure H1, then moderate as inventory normalizes.
- Sport offense realignment: reorganizing into cross-functional, sport-obsessed teams across Nike, Jordan and Converse; sharper marketplace segmentation (integrated Nike Direct & wholesale channels) to drive differentiated assortments, storytelling and consumer reach.
- Nike Digital down 26% in Q4 (NA –25%, EMEA –36%, China –31%) but showing improving full-price share and lower markdown rates; Nike stores +2% globally; digital traffic to remain down double-digits as the channel shifts to premium.
- Product pipeline accelerating: running up high-single digits with BIVERA 18 topping $100 M in 90 days and new Vomero Premium/Plus drops; women’s basketball +50% FY25; Asia One sold out in 3 minutes; major football boot upgrades and kit innovations slated for 12 months.
- Regional recovery timelines vary: Q4 CNB revenues down NA –11%, EMEA –10%, China –20% (inventory –11%), APLA –3%; Greater China reset slower due to mono-brand model—plan includes store concept refresh, local “Geo Express Lane” storytelling and digital repositioning.
- FY26 strategic priorities: laser focus on sport and five WinNow actions across five sports in three countries; modest share-repurchase pace; investing in demand creation and commercial offense; leveraging a strong balance sheet to return to sustainable top-line growth and margin recovery.
- To begin phased implementation of prices increases during the fall 2025
- Expects gross costs increase of $1.0B due to tariffs; Expect to mitigate costs over time
[CFO]: Traffic remains 'challenged' in China.
- Tariffs represent new and 'meaningful' cost headwind.
- To reduce manufacturing in China to mitigate tariffs.
- Currently source about 16% of US footwear from China
- Have moderated share repurchases in the near term due to the uncertainty
- Over time we absolutely have the ambition to get back to double digit operating margins.
**Reminder May 21st: Said to be raising prices on select items due to tariffs - WWD