This excerpt taken from the NKE 8-K filed Dec 22, 2009.
Charlie Denson: Thanks, Mark, and happy holidays to everybody. Well, I feel good about our future performance. The strength of the NIKE Brand remains in a very enviable position. I feel good that we've been a very solid performer in what has been a very challenging environment, and I feel good about our future. It's why we spend so much time thinking about our brand strength, managing the business, controlling expenses and driving heat into the marketplace by connecting with consumers.
And we continue to deliver on our primary objective, to create authentic product innovation for athletes all over the world.
Mark mentioned the importance of separation in the marketplace. Clearly, the impact of the strategic changes we've made both internally and externally over the last year helped us focus on key opportunities. I continue to call out our move to our category offense and our ability to execute it. Spring 2009 was our first full season in this formation, and we continue to fine-tune and focus on the benefits it's bringing, building momentum and leveraging deeper insights and connectivity.
Sub-segmenting the business by category and geography enables us to accelerate growth by delivering integrated, sharply focused product innovations, brand connections and retail experiences to our consumers. It's how we capture short- to mid-term opportunities and, more importantly, how we leverage the power of sport to grow the overall marketplace. We can drill down with tremendous visibility into specific regions, sports and demographics to get very surgical with our product innovation, messaging and go-to-market strategies.
That's why we continue to pick up share and expand our leadership position across the industry worldwide. So, here's a few quick examples.
In Basketball we continue to see the game and our brand gain momentum. The big story focuses on a he couple of franchise products, the LeBron VII and the brand-new Kobe V, which we just launched last week. It's pure NIKE -- use technology and innovation to create a project that defies logic, put it on an incredible athlete that establishes its credibility and shift the traditional paradigm that says you have to wear a high-top basketball shoe to play at the highest level.
In Running we used marathons in Chicago, San Francisco and New York, along with the second annual Human Race, our global NIKE+event, and a fully immersed NIKETOWN presence to create an interconnected consumer experience that drove tremendous sell-through of the LunarGlide, our best-selling new shoe of the year and a big step forward in bringing energy to running at retail.
In Apparel, Pro Combat has taken its rightful spot on the performance side of the U.S. apparel business. Nobody can match our relevance or performance in protective base-layer technology. Over the last 12 months we have added about 4 points of market share and we feel like we're just getting started.
As exciting as the last three months have been, its the next nine months that I'm really looking forward to. You're going to see even more of that integrated category offense beginning this spring with a concept we call Fresh Air. We are taking NIKE Air, our iconic cushioning system, and creating a whole new level of performance, aesthetics and comfort that will play out across multiple categories. This is a tremendous opportunity to leverage the strength of the NIKE Brand and a key franchise technology to energize the marketplace.
Next, in Football, we continue to redefine the game. Everyone knows the big story coming up is World Cup. I'm not prepared to drop the curtain just yet, but here's what I will say. You can expect to see unprecedented intensity in our marketing and messaging, a global network of grassroots and community experiences and a new generation of boots that are the lightest and most responsive in the history of the sport, true game-changing innovation.
As Mark said, NIKE is the biggest football company in the world. I would add that we are also the most innovative, and I'm confident that what we have coming will put to rest any claims to the contrary.
And we're not stopping there. We will follow up our World Cup efforts with a couple of other surprises that I'm going to leave under the tree for now. They will be something we'll be talking about in upcoming calls, when I'll be able to be more specific. I've talked a lot about product today because it gives us the power to drive two critical and distinguishing competitive advantages -- building and leveraging the power of the NIKE Brand and connecting that power to consumers through premium experiences out in the marketplace.
We've done a lot of things right to get where we are today, and we've got a lot more planned as we move through the second half. I'm very excited and optimistic about this brand, what this brand is capable of doing. I'm not focused on calling a bottom or predicting a turnaround. My sites are focused on growing this brand and serving its consumers. I have no doubts that what you see from NIKE between now and next fall will show you once again just how connected this brand is to our consumers and our opportunities.
Now here's Don.
This excerpt taken from the NKE 8-K filed Oct 2, 2009.
Charlie Denson: Thanks Mark. Good afternoon, everyone.
So what does Q1 tell us about the NIKE Brand? Well, first and foremost, that we're stable and we're staying healthy. It tells us that our inventory levels are lean and well-managed, and that we have a strong innovation agenda. There's a lot of energy around sports, and it continues with the Fall season. We're in good position to invest in growth opportunities, both short and long-term.
We're performing better than ever around the things we control -- but consumers remain cautious; so do retailers. We're seeing that play out across our categories and geographies. And yes, we're gaining share. It's a good win in these conditions, but our job isn't just to gain share. Our job is to grow the market. So we're going hard at what Mark calls our complete offense, in product, marketing and distribution.
So, what does success look like in this environment? Well, for NIKE, success is all about continuing to drive Brand heat, delivering innovative product, tell compelling stories, and finally, managing a healthy marketplace. And it's all driven by our connection to the consumer.
We're elevating that consumer experience and establishing NIKE as the most compelling Brand in the marketplace. We're not looking outside for the bottom or the turn. We're combining our Brand and consumer connectivity with running tight inventories, working our gross margins, and building innovative product and capabilities. That's how we're building consumer confidence and accelerating our separation going forward.
As Mark said, we're throwing a lot of new information at you from the reporting side, so, I want to spend some time taking you through that new structure. You're not going to hear acronyms like EMEA and CEMEA any more. Now we're organized into six key geographies. The change is driven by the opportunities we see for growth.
That said, I think you'll see a more granular look at the impact of the global economic downturn reflected in each of these geographies. I also believe that the Q1 performance does not reflect the potential of these markets going forward, but allows us to be more focused.
Let's take a quick look at each of these new geographies and the categories that are driving the business.
First of all, North America -- two big stories here; the first -- Basketball. The Lebron and Kobe footwear franchises continue to lead NIKE Basketball, and the Jordan Brand continues to post some impressive results. Our combined Basketball business delivered high-single digit revenue gains over last year. That's pretty good, given the fact we were up double-digits for this period last year.
The other big story -- Action Sports; a small category that's growing bigger every day. We have a three-Brand strategy that combines NIKE, Converse and Hurley, and it's proving to be a very powerful concept with consumers. Action Sports posted the biggest category percentage gain in Q1, up strong double-digits.
We continue to make gains on the performance side of Apparel. We recently launched a Pro Combat package as part of our football training attack. It's a great way to build on the momentum of NIKE Pro, a business where we've gained significant share over the last two years, and have had an even stronger momentum in the last three quarters.
Okay, let's move on to Western Europe -- and that means Football. And while overall, the category was down in revenue, we continue to gain footwear share in key markets with our Black Pack footwear, including two franchise boots -- the Tiempo Legend and the Mercurial SuperFly.
On the Apparel side, we launched the new club kits for ManU, FCB and Corinthians. So, lots of innovation across the product matrix in Football. Running and Sportswear were down, while Action Sports and Basketball turned in some strong revenue increases in this geography. And Women's Training also delivered solid results, driven by Apparel. Overall, our Brand is strong, our product is performing, but the consumer continues to be very cautious.
Central and Eastern Europe -- this is our most challenging geography of all. We saw some exciting growth in this zone up until about a year ago, but the current economic conditions aren't allowing consumers to keep up with their appetite for the NIKE Brand.
In the short-term, we're focusing on two things -- protecting our Brand and building relationships with the consumer. The category story here is also Football. This geography is home to South Africa, which is trending upward as we move into the World Cup time frame.
We're bringing a lot of product innovation to South Africa, but the World Cup is more than just a sporting event -- it's a social and cultural event, as well. And, as the world's biggest football company, I think we're well-prepared to leverage those aspects better than anyone else.
Greater China -- well, revenue was down, but we separated ourselves from our competition and we remained the #1 Brand. Basketball continues to drive excitement in this market. We took Lebron, Kobe and Chris Paul to China this summer and blew through their product.
Running is also on the move with the new LunarGlide+ selling through very well. China was one of the biggest participants in the Human Race last year, and we expect them to repeat next month with the second Human Race on October 24. So, we remain confident in China and committed to our post-Olympic strategy.
Next up, Japan. Very tough economically. Consumers continue to be very cautious, but they're willing to spend on things they believe in. We're seeing that in the Running category, where we continue to gain share against the category leader in their home country. And Apparel is getting a substantial boost through NIKE Pro. Still, like Central and Eastern Europe, Japan is a very tough marketplace right now, and we have to be patient in both of these geographies.
And, finally the Emerging Markets, which include South America, Central America, including Mexico, the Pacific Countries, and Korea. Very solid performance here. On a constant dollar basis, Running, Basketball and Jordan are up. Women's Training is up; Sportswear and Action Sports are up. Footwear and Apparel are both up. We're seeing continued growth throughout the region in spite of the global economic conditions. I feel pretty good about our team and our performance in the Emerging Markets.
So, I think we're off to a good start, given some very tough conditions. It's going to be a year of many challenges. That's good for the NIKE Brand. As Tiger Woods likes to say, The tougher the course, the better! It tends to separate the competition.
Thanks, and here's Don.