This excerpt taken from the NKE 8-K filed Dec 22, 2009.
Mark Parker: Thanks, Pam, and happy holidays, everybody. It was about a year ago that I told you that NIKE would perform well in this challenging economy and expand our lead over our competitors by doing what we do best, and that's delivering superior innovative product, connecting with our consumers, creating compelling marketplace experiences and operating with discipline and efficiency. As our performance over the last year clearly indicates, we are executing these strategies and winning in the marketplace. We continue to lead the industry in footwear and apparel product innovation, and we are doing that across multiple categories and geographies and up and down the price spectrum.
Our portfolio of global brands has deepened our personal connections with consumers. We continue to create compelling marketplace experiences with our retail partners in the NIKE-owned retail stores and online. And we are managing our business to balance ongoing investments in long-term growth with current profitability and cash flow.
Sticking with these principles allows NIKE, Inc. to expand competitive separation across multiple dimensions. We continue to gain share in key markets around the world and outperform the industry. Even as revenues dip a bit, our second quarter shows we are able to deliver an appropriate level of financial performance in a rapidly changing environment. By tightly managing the inventory on our books and in the marketplace, we have strengthened our brands, maintained profitability for NIKE and our retail partners and positioned ourselves for accelerated growth as consumer confidence returns.
As we move into the second half of fiscal 2010, I have to say I'm very excited about how we are executing against our key growth opportunities. I see a lot of momentum in our direct-to-consumer business, where we continue to deliver positive results, especially online. We are doing a good job of developing our retail capabilities, and as I've said many times, that makes us a better wholesale partner and a better company.
This really came to life in Tokyo, where we opened a new NIKE flagship store at Harajuku. It's a great example of how innovative retail experiences really connect with consumers, even in a very tough economy like Japan. As we evolve, we are getting increasingly better at product design, assortment planning, product flow and merchandising, all because we are executing everything with that consumer experience in mind.
We're also seeing the power of our category offense yield insights that drive excellence from product creation all the way through to the retail floor, and we continue to see opportunities to build on that category strength beyond the NIKE Brand. Football is a great example where we are leveraging the most powerful dimensions in sports, specifically the global passion for the game, the upcoming World Cup and our position as the world's biggest football company. It's a perfect storm that allows us to deliver compelling experiences, innovative product from NIKE and Umbro, like the CTR360 football boot and the tailored England National Team jersey all the way through retail experiences like the Boot Room in NIKE Towns.
And the recent launch of Lace Up, Save Lives in London, which is just another example of how we are able to deepen our connection with consumers while working to make the world a better place. As you will hear from Charlie in a minute, our focus and investment in football has completely changed the competitive landscape in that sport. Product innovation is what created this company and what continues to separate us from all others. We are in markets with LunarGlide, the Trainer 1, Pro Combat, all concepts with tremendous potential for continued evolution and longevity.
And, as we have demonstrated with Flywire, for example, we are able to use innovation to drive profitable growth across our business portfolio, from NIKE basketball, running and training footwear to Hurley board shorts and Cole Haan footwear. And we have a lot more product innovation in the pipeline.
Down in Laguna Beach consumers are responding strongly to our Action Sports store concept, where we have NIKE, Converse and Hurley all under one roof. In fact, we just opened a second store in Irvine, and both are excellent examples of how we are being more surgical with our brands and bringing together unique and targeted opportunities that are consumer driven.
But you don't have to be in a store to see the reach of NIKE, Inc. You can walk down the street and see Air Max 2009's, Hurley board shorts, custom Chucks, Cole Haan bags, an Umbro tee, a pair of retro Air Jordan 12's -- all unique, iconic products, each with sustainable, long-term relevance. And as you know, we have also taken a lot of aggressive and strategic actions internally over this past year. And we did it to get even more focused and surgical externally. We are able to move more quickly and decisively, like a small company, and yet still work the levers that only the industry leader can pull.
At the end of the day we are becoming a better NIKE, Inc., more insightful in our product creation, more aligned and surgical in getting after opportunities, efficient in our go-to-market practices and more innovative on the retail floor.
We all still face some significant headwinds in the global economy and while consumers are gaining confidence, they remain cautious and prudent. But given what we all know about the marketplace and about ourselves, we are well positioned to leverage the power of global sports and drive hard against those growth opportunities that have the most impact.
Now here's Charlie.
This excerpt taken from the NKE 8-K filed Oct 2, 2009.
Mark Parker: Thanks, Pam, and good afternoon, everyone.
Last December, as the impact of the economic downturn settled in, we said NIKE had the right mix of competitive advantages to manage through the tough times ahead. We talked about the unique strength of our brands, our business and our balance sheet. We told you that we would leverage those strengths to create even greater competitive separation, and Q1 shows that we're doing just that.
While consumers remain cautious, NIKE continues to connect through innovative products and compelling experiences in the marketplace. We feel very good about our relationships with consumers around the world, and we continue to gain share in key markets and categories.
That said, our strategy is not just about gaining share this quarter or next quarter; we're focused on growing the marketplace over the long-term, and we target our resources with that in mind.
We do that by drilling down in those key businesses that offer the most growth potential. That's why the NIKE Brand is aligned against seven key categories. That's why we're talking today about six new geographies to take us closer to the consumer and quicker to market. We're organized to bring a multi-category focus to multiple markets around the world, integrating the resources of multiple brands in our portfolio.
The closer and quicker and more integrated we get, the more powerful that complete offense becomes. It's not enough to be really good in one price point or one channel. NIKE takes a broader, more ambitious view.
Basketball is a great example. A complete offense means attacking the business with three key brands -- NIKE, Jordan and Converse. This gives every hoops consumer an entry point into NIKE, Inc. It means offering truly innovative product, footwear and apparel, at every price point. And it means making sure the consumer has a premium experience in our partner stores, our NIKE-owned stores, and online -- wherever they intersect our basketball business.
Only NIKE can connect on that many levels. That's the power of our complete offense.
I also said last time that NIKE is not a wait-and-see company, but we are a prudent company. We continued to drive savings and efficiency into the business and build off the benefits of our reorganization last quarter. Today, we are leaner, hungrier, and more entrepreneurial than ever before.
On the capital side, we have the strongest balance sheet in the industry, and it continues to be a significant competitive advantage that allows us to pursue appropriate growth opportunities.
So we continue to optimize our mix of strength, balance and flexibility. That's what defines our portfolio of brands, and keeps us opportunistic in today's economy.
On the NIKE Brand side of things, we're throwing a lot of new information at you today in terms of how we report our results. Charlie's going to take you through that in just a minute, but I want to highlight two things real quickly -- product innovation and retail.
Product innovation has never been more important. I've made it a personal mission to further accelerate our innovation agenda. It's already the most ambitious and effective in the industry, but there's more we can do. That's true in how we drive innovation season to season, and it's true on how we get after quick-strike opportunities. We're very surgical and aggressive in attacking product insights and moments in sports. That's where we discover or that's what we create.
Customization is a great example -- we've developed new experiences that allow consumers to personalize products in real-time and take it with them. There are a lot of similar ideas that live off the grid here, and I like that; it shows how hungry and opportunistic we are.
On the retail front, NIKE continues to be the go-to brand with our retail partners, and we continue to drive profitable growth with mono-branded partner stores around the world. And we're really starting to see some solid performance in our owned direct-to-consumer business, which saw record revenue in Q1.
Part of that came from factory stores, which enables us to keep the market clean and maintain the strength of our brands; some came from NIKE in-line stores, which provide access to our best products and unrivalled consumer experiences; and some came from digital commerce, which posted 19% growth for the quarter and outgrew the online industry by a wide margin. It's a good example of the complete offense I talk about so much.
Elsewhere in the portfolio, Converse grew revenue by 10%, and delivered its most profitable first quarter ever, up 13% over last year.
Hurley delivered its 2nd biggest revenue quarter ever. Along with NIKE and Converse, Hurley gained share in the Action Sports industry. In fact, Hurley continued to grow at double-digit rate with market share gains, while the rest of the industry declined.
Umbro continues its turnaround under new leadership and an ambitious innovation agenda that kicked off with the new English National Team kit. Lots of opportunities to increase the visibility of that Brand. And when you look at Umbro and NIKE Football working together, you can see how we -- as the world's largest football company --- will leverage the power of a complete offense to separate NIKE, Inc. around the world.
Cole Haan and NIKE Golf both operate in sectors hit especially hard by the economy. But inventories are clean and we have lots of innovation in the product pipeline.
On balance, Q1 shows a lot more than how we performed over the last three months; it shows that NIKE is poised to benefit first and most as we move through the current economy. It's not enough to simply survive -- we're more confident and competitive than that; we're focused on creating separation and momentum that allows us to extend our leadership now and in the future.
Now here's Charlie to take you through the NIKE Brand.