NIKE, Inc. (NYSE:NKE) Q1 2019 Earnings Conference Call - Final Transcript

Sep 25, 2018 • 05:00 pm ET

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NIKE, Inc. (NYSE:NKE) Q1 2019 Earnings Conference Call - Final Transcript

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Executive
Mark Parker

storytelling and investments. We're seeing it with NIKE Air and React. Consumers are drawn to their comfort and performance and they're asking for more style options. VaporMax and 270 are both proven there is still vast growth potential in NIKE Air as we develop more comfort innovation in new forms. This spring, we're taking the exaggerated air you see in the Air Max 270 and going a step further with the introduction of the Air Max 720. This new platform is engineered for maximum comfort, cradling the entire foot. And the Air Max 27 or 720 is distinctly NIKE and will deliver it to consumers in early 2019. NIKE React is a great example of how we've capitalized on the appeal of performance innovation and immediately scaled it into sportswear. The React Element 87 is considered one of the industry's top new designs, and we've applied the comfort of React cushioning to more performance and lifestyle shoes at several price points.

ZoomX continues to power the world's fastest runners including Eliud Kipchoge during his epic world record smashing run at the Berlin Marathon this month. This quarter, we took the magic of the Vaporfly 4% and merged it with an iconic running shoe, creating the Peg Turbo. The launch has created incredible energy for the whole Pegasus franchise and helped lead our overall running business to solid growth this quarter. One of our most versatile and ever-advancing platforms is Flyknit. Through digital knitting, we can now place breathability, stretch and support exactly where we need it. In basketball, for example, the KD11 and the LeBron 16, each leverage specific yarns and different knit structures to match individual athlete needs. The LeBron 16 with its Battleknit 2.0 has had a great early read with consumers, both men and women.

As part of our broader commitment to scale sustainable platforms, we're expanding NIKE Flyleather through iconic styles like the Air Force 1, Cortez and the Air Max 95. Flyleather is a super material that looks and feels like premium leather, but it's lighter, more durable and more sustainable. It uses at least 50% reclaimed leather and helps eliminate waste. And in the coming year, for the first time ever, NIKE will bring digitally powered adjustable footwear to professional sports. Building on the auto-lacing platform from HyperAdapt, this breakthrough creates a custom fit. We had a group of elite athletes on campus this summer for an intense wear test. And their feedback was that they never felt more secure or more in control of their movement. This next generation adaptable innovation will set the standard for optimal fit. And we'll offer it at more accessible price points and in greater quantities.

In addition to platforms, we're executing the fundamentals across our categories at a high level right now. We know that it's newness and freshness that wins with the consumer today. So, with our edit-to-amplify approach, we're providing deeper assortments and greater options of our top sellers. Our footwear power franchises, for example,