Good afternoon, everyone. Welcome to NIKE, Inc.'s Fiscal 2019 Fourth Quarter Conference Call. For those who want to reference today's press release, you'll find it at http://investors.nike.com. Leading today's call is Nitesh Sharan, Vice President, Investor Relations and Treasurer. Before I turn the call over to Mr. Sharan, let me remind you that participants on this call will make forward-looking statements, based on current expectations and those statements are subject to certain 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 the annual report filed on Form 10-K. Some forward-looking statements may concern expectations of future revenue growth or gross margin. In addition, participants may discuss non-GAAP financial measures, including references to constant-dollar revenue. References to constant-dollar revenue are intended to provide context as to the performance of the business eliminating foreign exchange fluctuations. Participants may also make references to other non-public financial and statistical information and to non-GAAP financial measures. To the extent non-public financial and statistical information is discussed, presentations of comparable GAAP measures and quantitative reconciliations will be made available at NIKE’s website, http://investors.nike.com. Now I would like to turn the call over to Nitesh Sharan, Vice President, Investor Relations and Treasurer.

Thank you, operator. Hello everyone, and thank you for joining us today to discuss NIKE, Inc.'s fiscal 2019 fourth quarter and full year results. As the operator indicated, participants on today's call may discuss non-GAAP financial measures. You will find the appropriate reconciliations in our press release, which was issued about an hour ago, or at our website investors.nike.com. Joining us on today's call will be NIKE, Inc. Chairman, President and CEO, Mark Parker, and our Chief Financial Officer, Andy Campion. 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. I’ll now turn the call over to NIKE, Inc. Chairman, President and CEO, Mark Parker.

Thanks, Nitesh, and hello and good afternoon everyone. NIKE delivered strong results in fiscal year '19 growing 11% on a currency neutral basis, which outpaced our expectations from the beginning of the year. Our results are further proof that the demand for sport performance and athletic lifestyle product is thriving and our consumer direct offense is capturing more of that opportunity every day. What's most exciting is that we delivered broad-based growth through our complete portfolio. We saw that balance across our geographies, men's and women's and key categories. Overall fiscal '19 was the defining year for NIKE as we accelerated the high-impact capabilities of innovation, direct and speed that fuel our triple-double. Innovation continues to win with consumers not only in performance product but also in sportswear. In fiscal '19 new innovation platforms drove roughly 100% of our total incremental growth, which is exceeding the long-term target we laid out at Investor Day 2017. In digital we know we're just getting started. NIKE is accelerating our digital advantage and that focus led to 35% digital revenue growth. Speed remains an incredible opportunity, and we're well on our way towards cutting our product creation cycle in half and we're investing in responsive manufacturing, connected inventory and optimizing data to capitalize on real-time consumer demand. And finally throughout the year, our brand connected emotionally with a wider audience in more meaningful ways. Our triple-double, our focus on the triple-double is especially important in an environment like we're in right now, where geopolitical dynamics have led to trade tensions and foreign exchange volatility. We’re certainly mindful of the risks, and more importantly we're in command of the conditions that are under our control. And that's serving the consumer and managing the leverage we have, delivering great products, engaging experiences and building our…

Thank you, Mark, and good afternoon everyone on the call. As we close fiscal year '19 and we look ahead to fiscal year '20 three key themes stand out from the financial perspective. First NIKE is a growth company. Growth is how we measure the value we're creating for consumers and growth is paramount in terms of how NIKE creates value for shareholders. Second, NIKE's growth is being fueled by strategic transformation. Transformation is about deliberately driving acceleration toward what you aspire to be in the future, not about just extrapolating what you are today. Accordingly, transformation requires innovation, it requires continuous learning and it requires investment. Third, especially in times of geopolitical and FX volatility NIKE's currency neutral financial performance provides a clear view into our fundamentally strong growth, expanding profitability and potential to create extraordinary value for our shareholders. Let's first go a little deeper on growth. At our Investor Day in October 2017, we said that our new consumer direct offense would generate high single digit revenue growth on average over the next five years. In our first full year executing this new strategy we accelerated out of the box, with growth in fiscal year '19 that exceeded expectations. For the full year NIKE, Inc. revenue grew 11% on a currency neutral basis and 10% in the most recent quarter. At NIKE Scale that is roughly $4 billion of incremental revenue in just one year. Our growth is also broad-based with all four geographies growing at or above the long-term targets that we communicated for each geography at our Investor Day. Now that brings me to the second key theme. Our growth is being fueled by a strategic transformation of NIKE globally. At our investor day we said that over the next five years, we aspire to…

[Operator Instructions] Your first question comes from Bob Drbul with Guggenheim Securities. Your line is open.

Hi, good morning. Good afternoon, sorry. It's been a long day. I guess just the first question I have is on China, I was just wondering if you could, go a little deeper in terms of strength of basketball and China apparel running. And just sort of what you see on the ongoing basis with the strong results and your expectation. I think you said continued growth the next decade. Just are you seeing any pressure there from the consumer around American brand? It doesn't appear so in the numbers, but I just wonder if anything's changing, from that perspective. And just wondering if you could maybe just update us a little bit on how you guys are thinking about, some of the trade discussions that continue to unfold here in the U.S.

Great, thanks for the question, Bob. Firstly, your first question, which was around the drivers of growth in China categorically. The short answer is over the course of fiscal year ‘19. All categories real growth in China with the exception of global football, and that relates to the comp versus last year's World Cup. The primary drivers of growth of the biggest drivers of growth. We're making sportswear, basketball, Jordan, running group training, but in general, extremely broad based across men's and women's and while led by digital, also broad based across the marketplace. And then to your question about seeing impact from the U.S. China dynamics of late we have not seen any impact on our business to-date. And we continue to see strong momentum as we enter fiscal year ‘20. The consumer sentiment around NIKE in China has been actually quite strong. We've made a lot of effort through the years to connect with the marketplace to take insights to use to drive innovation and messaging that is really, as we said, urban for China. So we're seeing that continue. And it's showing up in the results. I'm really proud of the team in China, we have and the complete offense kind of results that we're seeing coming out of China.

And just on basketball. I just wonder if I could just zone in on a follow up. But it sounds as if NIKE has capitalized on the NBA jersey opportunity, recently created by designer RJ Barrett, ahead of the NBA free agency, what raw material colors have you guys staged, blue and orange or purple and gold? Can you just give us some insight in terms of how you’re positioning for this weekend and the next few weeks?

Good one. Okay. You obviously figured out March [ph] in my hometown? Yeah. Right. You got the coast covered? Well, okay. We got the spectrum covered -- the color spectrum. So we're ready for anything, certainly blue and orange, and purple and gold. But, yeah. No other insights other than I think we got the bases covered. Yeah. Thanks Bob.

Thank you. Good luck.

Thanks, operator we’ll take the next question, please.

Your next question comes from Lauren Cassel with Morgan Stanley. Your line is open.

Great, thanks so much. Could you maybe quantify the impact that the supply chain investments had on gross margin during the fourth quarter? And then my second question is just where do we sit here at the end of the fiscal year in terms of your manufacturing exposure to China? What percentage of that is coming into the U.S.? And then just any, any commentary on -- if he wouldn't raise prices, et cetera, should this go through?

I'll take your first question on supply chain investments. The short answer is roughly 30 basis points in the fourth quarter. And just to clarify, those, that is because we capture investments that may be for the long term and our other cost of goods sold within margin. So it can be somewhat distorted in terms of current quarter product profitability.

And Lauren, your second question again, sorry, was pricing levers with respect to China is that…

Yeah just the current manufacturing exposure to China? I think you guys have been, actively sort of trying to diversify just where do we sit at the end of the year and how much of that is coming into the U.S.?

Sure, I'll take that one as well. We, we continue to source product in China. We continue to source product in China. We do externally report that we produce about a quarter of our product in China for the globe. Our exposure in terms of product produced in China to North America is relatively modest. At the same time we see a great opportunity to continue and potentially expand the production of product in China, for China and for other markets. The short of it is we've got a relatively agile approach to sourcing multiple nodes from a production and distribution perspective. And so while the dynamics are certainly -- while it is certainly dynamic out there with respect to trade, we're relatively well positioned as we always have been for macro dynamics.

And we see China continuing to be a critical part of our source space. For China, but also other parts of the world that will continue. Thank you, Lauren.

Thank you so much.

Operator will take the next question, please.

Your next question comes from Brian Nagel with Oppenheimer. Your line is open.

Hi, good afternoon. Thank you for taking my questions, I appreciate it. So of course, I want to talk a bit. We -- there -- clearly your currency neutral results were quite strong here, actually, very strong. There were indications of weakness elsewhere in Southwest in the United States. The question I have on that is, as you look at the data closer than we could, was there any more -- were there any more top line challenges through the period that maybe not been totally reflected in the aggregate results?

One challenge from a top line perspective is frankly a nice problem to have, Brian, which is, as we enter the year we've got a particularly strong demand. Its broad based and a couple of years where we have very strong demand relate to Air, NIKE AIR, which is obviously a distinctive innovation relative to NIKE. So to your point about dynamics out there in the marketplace, we've got an innovation that is obviously closely tied to and really powerful within our portfolio that being NIKE AIR. And as Mark mentioned, in his remarks, we are actually expanding our investment in Air manufacturing in the U.S., and that is directly related to demand that we weren't able to fully capture in the second half of this past year. In other areas and apparel got very strong growth in apparel. And we're ramping up supply with respect to a few classifications where our revenue growth could have been greater based on the demand in the marketplace, particularly around fleece. And then just overall, when we speak about our growth, we said that it's not really an extrapolation. It's not really just a correlation to what's going on in the market. It's about a transformation in NIKE. And most notably, that transformation is being fueled by innovation. So we're creating something new and different in the marketplace and digital. Again, we're creating something new and different in the marketplace in terms of the digital connection we have with consumers.

A couple of other areas I call out quickly. There's the performance has actually been very strong. But I think there's more opportunity for us going forward. I mentioned women's and how we have double-digit growth for the year and it's been accelerating through the fourth quarter. But we're actually very bullish on the opportunity in women's going forward as we move into fiscal '20. And then also called out core product under $100 price point products within footwear. And we have a whole refresh coming in the sort of core zone, not only with existing technologies being leveraged in that space, but unique design work that is going to refresh about 75% of that the styles in that product zone for NIKE. So that's going to create some more opportunity for us.

That's all.

Thank you, Brian.

I appreciate the detail. Thank you.

All right. Operator, we'll take our next question, please.

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

Hi, thanks for taking my question. Two questions actually, I wanted to ask first about your comments on RFID inventory, sharing the inventory in the wholesale channel. Kind of wondering what you're thinking about longer term, how you see inventory and inventory management evolving. What the opportunities are to either manage it differently, especially as you talk about matching kind of more diverse consumer demand more accurately? And then my second question on the SNKRS app, obviously explosive growth there. How do you think about as you scale that platform, I don’t know the saturation is the right word but how do you keep that growing and also keep it special and did you see, how big is that runway to create those unique experience for consumers through that platform before it starts to lose the special? Thanks.

Let me just touch on the RFID question first Omar. As I mentioned you were launching RFID across essentially we're in apparel beginning in the fall '19 season and that’s going to enable all the footwear, the majority I should say of non-licensed apparel, through RFID and there QR technology. So that’s a big upside for us in terms of our capability to dramatically improve our inventory visibility and accuracy. I think across the marketplace and throughout the supply chain. And ultimately that's going to allow us to serve consumers with the product that they want, when they want it. So the consumer up upside on this is actually quite powerful. And then we're going to rollout through fiscal '20 and scale the capabilities that we have within RFID globally across our own doors and over time I think we see RFID is a key capability throughout owned and partner retail supply chains. So I think this will help us create the capability to grow profitably across the breadth of the portfolio and ultimately, again it's putting ourselves in position to serve consumers in a way that gets them the product that they need when they want it and where they want it.

And then Omar I will take your question on sneakers. We still see tremendous opportunity with respect to sneakers. I will give you some dimension on where we see that opportunity. In terms of what you referred to as kind of special nature of the product that were launching on sneakers. We still supply a very small percent of the demand that were seeing on sneakers. In fact just this morning, we launched a few pretty unique collaboration and again saw sell out within minutes. That’s fantastic in terms of the heat that some of our styles create, but also an opportunity. Couples of other opportunities within sneakers are apparel. What we done with apparel and in limited cases where we've launched apparel either collaboration or apparel innovation we see an incredible demand and we really have. It's almost overstating it to say we scratched the surface in terms of the heat we can create and connectivity to consumers around apparel. Women's is another great opportunity through the sneakers app and then two last dimensions I speak to product creation, that's done with the membership data that we get through the sneakers app in mind. We launched the shoe in this past year. Based on data and analytics relatively Dominican community in New York, which was incredibly well received based on demand and branch. Around that we also see the opportunity, as Mark touched on, to launch innovation directly to members. Sneaker is for people who love the innovation that we provide in the app. And then finally, what both of us touched on is we often focus on the businesses that we have here in North America because we all experience them as consumers here in North America but we got a tremendous potential to continue to expand the sneakers app globally geographically in markets around the world.

I have to add that the core answer to your question about sustaining the heat in sneakers is going to be the product itself. So the strength of the product, how we refresh it, making sure supply demand is in the right ratio and now the whole experience on sneakers is going to continually evolve I think to make it a very compelling kind of have to check back in day to day comp experience.

Thank you, Omar.

Understood. Thank you.

Operator we will take our next question please.

Your next question is from Jim Duffy with Stifel. Your line is now open.

Thanks. Hope you're all doing well. I’m interested in the comments on digital and physical intersection and how successful that's been recruiting new customers to the digital ecosystem. Does that make you rethink the role of physical retail in the go to market strategies? And then maybe this will dovetail with my second question. With respect to the key city strategies, are there cities you would highlight as being further along in demonstration of the efficacy of that strategy?

Well, we see the first of all, the intersection of physical and digital is going to continue to be more and more intimate relationship. I think we're looking at a lot of experimentation, trial and error learning from some of the tests that we're doing. Ultimately, it's about making the experience physically or digitally more richer, more dimensionalized experience for consumers. We are saying where we have those digital connections through like NIKE app at retail, we're seeing the engagement from consumers rise significantly. And the actual spend per consumer in those cases actually jumps up dramatically. So this is something that we don't think it's just a -- it's not just a current trend, this is the future of the fusion of digital and physical is going to continue. And this is a huge priority. It's a source of investment for us. It's ultimately around how do we better serve customers members. And you'll continue to see us evolve that dramatically. And our ambition is to lead in that space.

And then to your question, on key cities, we're seeing over indexing growth in our key cities as compared to the countries in which they are. We're also seeing over indexing results from a brand perspective. Our brand is the number one brand in each of those key cities. I would tell you that in terms of prioritization, which I think was the spirit of your question, our priorities have been in bringing our Consumer Direct Offense to life, first in London, New York, and Shanghai. So that's where you see us having invested in the new houses of innovation in New York and Shanghai, which do -- that is a bit of a segue from what Mark was just speaking to merging physical and digital in an experience that the consumer really hasn't had for NIKE or anyone else in the marketplace. Those experiences have well exceeded our expectations. LA is another market where we've started to bring this to life with our smaller format, concept NIKE Live. So I would say that to answer your question, in short, London, New York and Shanghai, I think, are the cities where we're furthest along. But we've got really energized teams in each of the key cities. In fact, we just had all of our key city teams not just jammed together here a couple of weeks ago, at our headquarters to share best practices and learnings and align on how to leverage what we can create globally or in one key city and another key city. So we really think feel great about the progress we're making against that offense.

Thanks, Jim. Operator, we will take our last question, please.

Your last question comes from Sam Poser with Susquehanna. Your line is open.

Thank you for taking my question. I was really wondering, about how you view your brands. As a follow-up on how you view your brand's perceived in China. Somebody said that you were perceived -- other brands were perceived as American or U.S. brands or German brands. But NIKE is perceived as NIKE. Love to get your comment on that. And I have one other question.

Sure, Sam, thanks for the question. I'll start. Yes, as both Mark and I said, our approach has been to be of China for China. And that's not a new approach. That approach is not based on dynamics of late. That's been the approach we've had in for China for two, three decades. And it ranges from the strong leadership team we have in place there with local talent that understands the consumer. Obviously, in our history, it dates back to our sourcing of product in China. Over the years, it's been about us fueling the passion for sport and participation in sport, not simply being a commercial enterprise in China, but having a bigger view in terms of the purpose and the impact that we could create, in terms of the lively consumers in China. And then that last point extends to our relationship with the Ministry of Sport and Education. Our partnerships there as well as our partnerships, more probably out in front in terms of the global impact of the teams, athletes and Federation's in China, but why we're invested in sponsoring those teams and athletes and federations is because of their impact on local consumers in China.

Thank you. And then secondly --

And also as the insights that we're getting for China are actually helping us create China -- products that's more relevant for China but also other parts of the world. So this isn't about importing Western concepts into China as much as it is trying to actually take the insights we gain in China and use it to enrich our global position as a brand and as a product offering. So it's truly not just local for local. It's China putting us in a position to be a better global company.

Thank you. And then just to follow-up on a prior question. The RFID, does this mean with your core partners, Nordstrom and Foot Locker and so on Dick's and so on, that you will be able to overtime, interact with them and maybe interact between your systems to be able to make your inventory act as a whole more efficiently?

Yes. Sorry. Sam, did you add more to that question. Go ahead.

Well, yes, and I'd love color and may add something else. But go from there.

Yes. RFID provides us an opportunity to do what we aspire to do, which is connect the marketplace and do that through our NIKE Direct business, but also through strategic wholesale partners, partners that we view as being part of the NIKE Network of the future. We are already testing the use of RFID in being able to give consumers greater visibility into product down to the style, color and size that they're looking for. And I'd say that's probably the sharpest and most intuitive aspect of this opportunity is visibility into the inventory for a company like NIKE with the breadth and depth of our portfolio is somewhat limited across our broad distribution within the marketplace, being able to leverage our RFID to give almost 100% visibility into what we have, by style, color and size across our marketplace is an incredible opportunity in terms of meeting consumer demand real time in the moment.

And then lastly, for your speed initiative -- with your speed initiative, how long do you get to double the speed or beyond that this RFID will certainly help that?

Yes. Well, that's one of the measures of success. We feel really good about the progress we're making. On doubling the percentage of products and what we call one half the time to market. We've seen some really strong results over the past year. And we expect that to continue through the next year. And a lot of that effort is led by what we call the Express Lane. And Express Lane as I mentioned, I think, I commented that 20% of our product, sale revenue in EMEA is actually coming from our Express Lane initiative. So we see the speed initiative for NIKE, the time to market cut in half initiative, really accelerating through this next fiscal year. And it's ultimately going to be a big competitive advantage for us.

Thank you, Sam. And thank you, everybody. Thanks. Thank you for joining us today and we look forward to speaking with you next quarter. Take care. Bye.

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