Good afternoon, everyone. Welcome to Nike’s Fiscal 2014 Fourth Quarter Conference Call. For those who need to reference today’s press release, you will find it at https://investors.nikeinc.com. Leading today’s call is Kelley Hall, Vice President, Treasury and Investor Relations. Before I turn the call over to Ms. Hall, let me remind you that participants on this call will make forward-looking statements based on current expectations and those statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed with the SEC, including Forms 8-K, 10-K and 10-Q. Some forward-looking statements concern future orders that are not necessarily indicative of changes in total revenues for subsequent periods due to mix of futures and at-once orders, exchange rate fluctuations, order cancellations, changes in the timing of shipments, discounts and returns, which may vary significantly from quarter-to-quarter. In addition, it is important to remember a significant portion of Nike Inc.’s continuing operations including equipment; Nike Golf, Converse and Hurley are not included in these futures numbers. Finally, participants may discuss non-GAAP financial measures, including references to wholesale equivalent sales. References to wholesale equivalent sales are only intended to provide context as to the overall current market footprint of the brands owned by Nike Inc. and should not be relied upon as a financial measure of actual results. Participants may also make references to other non-public financial and statistical information and non-GAAP financial measures. Discussion of non-public financial and statistical information and presentations of comparable GAAP measures and quantitative reconciliations can be found at Nike’s website, https://investors.nikeinc.com. Now, I would like to turn the call over to Kelley Hall, Vice President, Treasury and Investor Relations.

Thank you, operator. Hello, everyone and thank you for joining us today to discuss Nike’s fiscal 2014 fourth quarter results. As the operator indicated, participants on today’s call may discuss non-GAAP financial measures. You will find the appropriate reconciliations on our press release, which was issued about an hour ago and at our website, investors.nikeinc.com. Joining us on today’s call will be Nike, Inc. President and CEO, Mark Parker, followed by Trevor Edwards, President of the Nike Brands and finally, you will hear from our Chief Financial Officer, Don Blair, who will give you an in-depth review of our financial results. Following their prepared remarks, we will take your questions. We would like to allow as many of you to ask questions as possible in our allotted time. So, we would appreciate you limiting your initial questions to two. In the event, you have additional questions that are not covered by others, please feel free to re-queue and we will do our best to come back to you. Thanks for your cooperation on this. With that, I will now turn the call over to Nike, Inc. President and CEO, Mark Parker.

Thank you, Kelley and hello everybody. Fiscal ‘14 demonstrated a point I often make and that’s when we innovate, we just don’t innovate for the sake of change, we innovate to change the game and that’s what we did throughout the year. We introduced great products, launched new consumer experiences, expanded our digital ecosystem and developed engaging retail concepts that drove excitement and energy for our brands in the marketplace. By staying true to the Nike spirit, we continued to deliver great results like those we are reporting today. Here are the fiscal ‘14 highlights. Nike Inc. revenues grew 10% to nearly $28 billion. Gross margin increased 120 basis points to 44.8%. SG&A rose 12% reflecting continued strategic investments in our brands and operations. And despite significant currency pressure, diluted EPS rose 11% to $2.97 for the full year. We are proud of those results we delivered in fiscal ‘14, but more than that, we are proud of the consistent level of growth we have been able to deliver over the years. As we continue to get bigger as a company, I am often asked how can Nike continue to grow? Well, first and foremost, there is absolutely no shortage of growth opportunities for Nike. This has never been clear to me as it is today. When I look within and across our five brands, six geographies and eight categories, I see tremendous untapped potential. And this includes areas where we can build on our current foundation such as apparel and women’s and converse as well as areas where we can extend our current leadership position such as running, basketball, and football. The key to unlocking this potential is and always has been to focus on the consumer. Our relationship with the consumer is something we need to earn every…

Thanks Mark. The Nike Brand had a strong finish to a great year, one that confirms the tremendous confidence that we have in our long-term growth strategy. Looking at the results, on a constant currency basis, Nike Brand revenue grew 13% for the quarter. For the year, revenue was up 11% with growth across all key categories and geographies. Nike Brand DTC revenue was up 27% for the quarter, with 22% for the year, putting DTC revenue past the $5 billion dollar mark. Results for the year were driven by comp store growth of 10%, new store expansion and online sales growth of 42%. And finally, global futures are up 12%. As always, these results can be attributed to Nike’s unrivaled ability to understand the consumer, what they need and what inspires them. That knowledge drives us to identify the biggest growth opportunities and align our resources against them. Let me highlight three areas of the business, where we have seen significant revenue expansion on a wholesale equivalent basis clearly demonstrating the power of our consumer focus. First, I will start with global football, which in fiscal year ‘14 grew 21% to $2.3 billion. And that doesn’t even include our football sportswear product. Now, I visited Brazil many times over the past 20 years. But having just returned from Rio, I have to say, I have never seen energy like that before. There is a tremendous passion for football across the country. At Nike, our connection with Brazil is powerful. We have been there for years and we will be there long after the World Cup ends. The enthusiasm we see in Brazil coupled with our number one footwear market share around the world is living proof that our football business has never been stronger. And the power of the…

Thanks, Trevor. Our FY ‘14 results continue to demonstrate our ability to leverage our diversified portfolio to drive sustainable, profitable growth. We are able to consistently deliver results like these for three key reasons. First, we invest effectively to build our business. The category offense is the framework for our growth strategy. And as Mark and Trevor described earlier, we are delivering outstanding value to consumers on each component of that framework: product, brand and marketplace. The results were clearly on display in FY ‘14. We continue to drive remarkable growth in North America and we have significantly accelerated our business in both of our European geographies. Using the learnings gathered in more developed markets, we are making great progress resetting China, while continuing to build our brands and our business in the emerging markets. Within all of those geographies, our direct to consumer operations are the sharp point, delivering strong growth in revenue and profits, while setting a benchmark for our brand and our business in store and online. And beyond the Swoosh, we are continuing to build the Converse, Jordan and Hurley brands reaching toward the enormous potential they each offer. The results we are reporting today flow directly from the investments we have made over the past several years and we are confident the investments we are making today will continue to drive sustainable, profitable growth well into the future. Second, we work hard to maintain balance across growth and profitability, investments and returns, near-term and long-term results. The breadth and depth of the Nike portfolio gives us the opportunity to invest for the future while delivering strong growth and expanding returns on capital. And that’s important for us to compete effectively and to continue to deliver value for our shareholders. And the third reason we deliver…

(Operator Instructions) Our first question comes from Kate McShane with Citigroup. Your line is open.

Thanks. Good afternoon.

Hi, Kate.

Just one quick question on guidance, I think Don on the last call you had said for fiscal year ‘15 you had expected slightly below mid-teens EPS growth rate, is the guidance and the line items you gave today implying that same guidance?

Well, Kate, as you know it’s not been our practice to regularly give EPS guidance, but we do give you parameters on key line items. And I would point you back to the guidance that we gave in the prepared remarks and that’s where I would like to leave it for now.

And Kate, you can give a call into my team. We will walk you through it.

Okay, great. And then my second question is on share buybacks, it looks like this quarter you have bought back more on a dollar basis than you ever have in your history, how should we think about buybacks going forward?

Well, overall, our strategy as you know is to continuously increase the level of cash returns to shareholders. And as you know, we have done that very consistently with our dividend. And we do create our share repurchase program based upon analysis of value of the company and market conditions. So, over the long-haul what we would expect is that we would continue to deliver more cash back to shareholders. The specific timing of that is based upon our assessment of the marketplace, but we are confident in our ability to continue to generate sustainable profitable growth and we think Nike is a good investment.

Thank you.

Your next question comes from Omar Saad with ISI Group. Your line is open.

Thanks. Great job on the World Cup so far. You guys seem really visible. Congratulations. Two questions, one on China, one on supply chain. When it comes to China, it’s really great to hear that you have got a store format that seems to really be working. Now that you have got this kind of this DTC format that works, are you going to re-profile the partner stores? Are you going to shutdown some of the partner stores there? Any sort of deeper dive explanation of what the retail strategy there would be helpful? And then my supply chain question on the supply chain revolution really, are you starting to see gross margin benefits from some of those activities? I mean, Flyknit is really starting to get larger in size or is that really all in the come in terms of the margin benefits of some of the new supply chain innovations? Thanks.

Okay, yes. Omar, I will take the first one. Yes, around China, yes, obviously we are seeing great results in the stores that we have re-profiled. So, we clearly feel that the reset strategy is working. What we are looking to do is continue to expand on the number of stores that we actually re-profile and so that we can continue to actually scale the results. Right now, it still represents a smaller part of our entire business, but we do believe that by re-profiling more doors, we will continue to actually build the business in the right way. So, again, we feel very confident about where we are today. We will accelerate at a faster pace as we kind of come out, but we certainly feel very confident of what we have been doing.

And just to be clear, Omar, when we say re-profiling stores, it’s not just a physical format, it’s also the way we assort the stores and to Trevor’s earlier point this is already in a number of stores with our partners not just in DTC and those partners are seeing great results both in terms of sales results as well as margin. So, with respect to your second question to take the financial part of the question, we are still in very early days in terms of seeing the impact of some of the more transformational approaches to manufacturing. We are starting to proliferate that into our sourcing base but we think there is huge opportunity going forward on that.

I will just add Omar that we are very familiar to modernizing our manufacturing and really focusing on innovation with some key partners to transform the whole process. There is lots of opportunities I think to reduce product costs and we are focused on the ones that we think have the most potential to make an impact so we are selective as to where we can innovate and how we can scale those innovations. Flyknit you mentioned has enormous potential. We are getting tremendous response to that product we are improving or extending the scope of Flyknit across multiple categories. I think you will see over the next couple of fiscal years Flyknit and some of the other investments we are making in manufacturing innovation really starts to make a more sizable impact on our product cost reduction. And that will only continue to get bigger and stronger I think in the fiscal years to come. We are very bullish on this and it’s really important part of our strategy to contain product costs and then advance the innovation in our products at the same time.

Thank you. Very nice job guys.

Thank you.

Thank you, Omar.

Your next question comes from Bob Drbul with Nomura Securities. Your line is open.

Hi. Good evening.

Hi Bob.

The first question I have is around the FX and the currency hedging losses, Don how should we model that or think about that I think it came in a little bit below the expectation this quarter at least and just sort of how to think about it for ‘15 from a modeling perspective and I guess similarly on those – that line can you just elaborate a little more how you are managing the risk in some of the emerging market volatility that you are seeing right now from a business standpoint as well as an FX standpoint?

Sure. So I am going to leave – need to leave the conversation around modeling with our IR folks as it all depends upon the individual who is doing the modeling, but as far as the way we manage this we do have a pretty robust hedging program or the developed market currencies because normally those are the largest impacts on our business and it’s relatively economical to do those sort of hedges. For a lot of the other currencies we have done quite a bit of work in the last few years developing natural offsets to some of the exposure by purchasing in multiple currencies and so as a result we have reduced our overall volatility. But there is a base line level of volatility especially in the developing worlds like Brazil, Argentina, Russia, Turkey that just is not economical to eliminate through the use of a hedging program. So unfortunately we are going to see some of that volatility flow into our numbers. With that said we have very diversified portfolio of businesses. And just as you saw in FY ‘14 we have a lot of levers to pull and we were able to deliver double digit growth in EPS even though we absorbed eight points of FX headwind for the year.

Okay. And then just my second question is a lot of talk on the World Cup and the product offering, I just wondered if any of you guys would share your predictions for the winner?

We just hope that the best teams win.

Alright. Thanks very much.

Good luck.

Your next question comes from Robby Ohmes with Bank of America Merrill Lynch. Your line is open.

Thanks guys. Thanks for taking my question. Congrats on a great quarter. My question is on North America I get this question a lot, how – can you give us a little bit more of a map on how you are going to keep the North America momentum going, is it more price increases, is it an acceleration in store growth, internet is it more leaning on women’s growth acceleration, just maybe a little more color on how you guys expect to keep that going through the next year or two?

Absolutely. It’s a question that we clearly always get that same question. And the thing that we would continue to say is that we see great momentum in North America today. Our futures growth of 11% continued to demonstrate that we can continue to leverage the category offense to continue to grow the brand and the overall market. One of the key things that we have certainly learned is by drilling down against any of the opportunities in the category, we can continue to grow. So, we see great growth coming from the categories that currently are perennial categories as I talked about earlier, whether that’s running, that’s basketball. Those are obviously our key categories, which will see growth and will see sportswear growth. In addition, we see great growth come from the other categories, such as our women’s business, our young athletes business as well as e-commerce. So, those are all very under-penetrated opportunities. So, we look at the North America and we see just tremendous growth potential in the marketplace. Overall, also we have our focus with our key retail partners around continuing to transform the marketplace. So, we can increase the capacity in that marketplace, which we are certainly seeing great success from doing that today. So, all-in-all, we still see tremendous ways to grow e-commerce, young athletes, women’s, apparel, all of those represent really great opportunities for us to grow in addition to the current and expected businesses, where we are doing well today.

And I will just quickly add that we have a sizable investment and ongoing investment in DTC and that’s not just to create more premium points of distribution. It’s actually to help us elevate our business and how we manage our brand in North America certainly and then around the world. We are getting better I think at retail presentation, consumer experiences, storytelling, merchandising, product flow, assortment planning. These are the things that you have to do just to be a better brand in a better business. And so we are leveraging that investment in DTC that really drive more potential in North America, but then also it’s really a blue print for expanding our business around the world.

It sounds great. Thanks guys.

Thank you.

Thanks, Robby.

Your next question comes from Dave Weiner with Deutsche Bank. Your line is open.

Great. Yes, good afternoon. So, I was looking for a little more color on your long-term gross margin driver. So, I think the key drivers that you have talked about in the past are shift to – our geographic shift outside of the North America, a shift from footwear to apparel and then also a shift to DTC. It feels like the DTC is what’s helping the most right now. Could you just kind of confirm if that’s the case? And if it is, maybe provide a little color about when maybe the shift to apparel and the geographic gross margin shift may start to contribute to the overall gross margin gains as well if they are not already? Thanks.

Okay. Well, let me just start with the biggest drivers. I mean, certainly, we start with the top line. And as I said in my prepared remarks, we have done quite a bit of work around our consumer value equation. And one of the things that the strength of our brand and the innovation that’s in our products means that there is a great consumer value proposition at higher price points. So, certainly, working to optimize that price value equation, we think we can continue to raise prices, particularly around product innovation and brand strength. And then the second thing is migrating consumers to premium product. So, that is definitely a trend we have seen both on the footwear and the apparel side. The second one is really making sure that we are working that product cost equation. And as Mark indicated earlier, there is a whole range of supply chain and manufacturing initiatives in place all the way from the evolutionary to the revolutionary. And the objective there is to raise the productivity of labor to reduce waste of materials and produce even more premium product. And we are driving hard against those. DTC is certainly a positive driver for us. And our DTC business has increased significantly in profitability as we have driven our .com business and also as we have gotten better and better as Mark indicated at operating retail. So, all of those are key drivers. They were key drivers in ‘14. We expect them to be key drivers again in ‘15 and going forward.

Great, that’s helpful. Thanks.

Your next question comes from Jay Sole with Morgan Stanley. Your line is open.

Hi, good afternoon.

Hi.

Mark, I just had a question about the reset going on in China, can you just walk us through the strategic decision-making process, we’re thinking about whether to prioritize investment in distribution into nike.com versus investment in brick and mortar retail whether it’s your own or wholesale partners, I am sorry, retail partners?

Well, we are actually investing in both. We are as I have said you have heard us talk about quite a bit we are investing in elevating the presentation of Nike at retail looking at how we can improve our ability to create a more profitable, more focused business, raise the level of execution against the categories, it’s really imperative that we will not only learn how to do that ourselves in that market but actually help to leverage those learnings through our retail partners. So the physical retail investments we are making in China are absolutely critical. I am really excited about what has transpired over this past year and then our ability through ’15 and beyond has started to scale those learnings across both our own retail and our wholesale partners. Certainly, we are very bullish on dot-com not only in China but around the world. We think that’s just going to continue to be a bigger and bigger percentage of business going forward and China is certainly no exception. Very digitally connected country consumer and that channel for us, that medium for commerce is absolutely the future. So, we are going to be as bullish there as we possibly can.

Yes. The one thing I would also underline from an economic standpoint is our focus is on productivity and profitability of retail. So for us from a return standpoint this is really driving more revenue, more profitability though a given size of distribution infrastructure which is not to say we won’t expand over time but the strategy is not adding lots of new stores in lower tier cities here. We are really focused on making our existing base more profitable, more productive for us and for our retailers.

One other thing too as Mark just mentioned in China specifically last quarter we actually went in and upgraded our entire nike.com site in our China business. And that again is one of those things as we continued to transform that marketplace using all of the investments that we put in place we are now leveraging that in China specifically. So I think you will see that play out and in the future as that continues to grow.

Got it. Thanks so much.

Your next question comes from Mitch Kummetz with Robert Baird. Your line is open.

Yes, thank you. Trevor, in your prepared remarks, you referenced the momentum on the women’s side. I was wondering, is that more of a U.S. phenomenon, are you seeing that trending elsewhere? And then in terms of the growth that you are seeing there, is it more on the apparel side and footwear, is it more DTC than wholesale? Just any color on that would be helpful.

Yes, certainly. We absolutely see just great momentum in women’s business. Actually, it’s not only in North America, but actually across all the geographies. We are seeing great growth as we have gone in and certainly we are seeing really a strong brand position. All the work that we have done around the Nike training app has really helped to unlock a connection with our female consumer. We continue to bring really great products and premium products into the marketplace. And so she is very obviously excited about that. And then thirdly what we are also doing is around distribution, we have been able to go in and work at our DTC doors to use them, as Don said, as a sharp point to better understand that consumer and then roll that strategy out with our wholesale partners. Now, in terms of footwear and apparel, actually we are seeing growth on both dimensions. Certainly our footwear, on both running – from running to training to actually sportswear and certainly around apparel, we are seeing great growth in the women’s training apparel as well as in women’s running apparel, so again just tremendous upside here. And I think going forward, you are going to see us put a lot more focus on this part of the business, because we truly believe this is an area where we can be very successful and then we see great opportunity.

Okay.

I will add to this. The women’s business on the .com side has been incredibly healthy as well. And we expect that to continue through ‘15 and beyond and that’s a real focal point for us on the women’s side is that .com business. And then the futures on our women’s business are actually very, very healthy as well. So, we see a lot of momentum going into fiscal year ‘15.

Okay. And then real quickly on Western Europe, I mean, a lot of momentum there, you have talked about some of the strategies that you have placed in that market. I am also wondering how much of a factor is an economic recovery there? I mean, is it mostly that you are taking share with some of these strategies or are you also benefiting from somewhat of a tailwind from economic recovery?

I think from our side we are certainly seeing just broad-based growth across all of the Western European marketplace. And that we truly believe is a function of the reset that we did two years ago when we decided to really focus against the category offense as well as have a more centralized approach to the European marketplace. So, we’re seeing great growth really across all the territories and even in the Iberia, so the Southern parts, where it was struggling, we are certainly seeing strength in those zones coming back. So, we really truly believe our category offense is what’s driving that. And we are seeing the numbers actually go really ahead of any economic recovery. So, we feel very strong that it’s really about our approach in that market. And we think we have only just gotten started. We think there was just tremendous growth continuing to come through.

Okay, thanks. Good luck.

Alright. Well, thank you everybody. I appreciate you joining us for our year end call today. And we look forward to talking to you next quarter.

This concludes today’s conference call. You may now disconnect.