NIKE, Inc. (NYSE:NKE) Q2 2018 Earnings Conference Call Transcript

Dec 21, 2017 • 05:00 pm ET

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NIKE, Inc. (NYSE:NKE) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, everyone. Welcome to NIKE, Inc.'s Fiscal 2018 Second Quarter Conference Call. For those who need to reference today's press release, you'll find it at investors.nike.com. Leading today's call is Nitesh Sharan, VP, IR and Treasurer.

(Forward-Looking Cautionary Statements)

Participants may also make references to other non-public financial and statistical information and 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, investors.nike.com.

Now I would like to turn the call over to Nitesh Sharan, VP, IR, and Treasurer.

Executive
Nitesh Sharan

Thank you, operator. Hello, everyone, and thank you for joining us today to discuss NIKE, Inc.'s fiscal 2018 second quarter 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 in our website, investors.nike.com.

Joining us on today's call will be NIKE, Inc. Chairman, President and CEO, Mark Parker; followed by Trevor Edwards, President of the NIKE Brand; and finally, you will hear from our CFO, Andy Campion, 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.

I'll now turn the call over to NIKE, Inc. Chairman, President and CEO, Mark Parker.

Executive
Mark Parker

Thanks, Nitesh, and happy holidays, everyone. In Q2, we delivered solid results, showing early progress against the long-term strategies we laid out in October. Let's look at the numbers for the quarter. NIKE, Inc.'s second quarter revenues were up 5%, growing to $8.6 billion. On a currency-neutral basis, NIKE, Inc. revenues grew 3%. Gross margin was 43%, down 120 basis points to prior year. Earnings per share was $0.46, down 8% to prior year and we delivered ROIC of 32%.

While the athletic marketplace continues to shift, we're very confident in the factors of our business that we control. Through our Consumer Direct Offense, we're identifying which consumer opportunities have the most upside and we're over-indexing in those areas to fuel growth. As we outlined at Investor Day, we're focused on unleashing a relentless flow of innovation at a scale that our industry has never seen bringing NIKE closer to the consumer in key cities and delivering with speed and using the power of digital to go deep and broad by rewarding our most active NikePlus members, while expanding that community to hundreds of millions.

We're entering the second half of the year with a wave of new products and concepts. Consumers want fresh, innovative product and they want choice. And right now, our