NIKE, Inc. (NYSE:NKE) Q3 2019 Earnings Conference Call - Final Transcript

Mar 21, 2019 • 05:00 pm ET


NIKE, Inc. (NYSE:NKE) Q3 2019 Earnings Conference Call - Final Transcript


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Mark Parker

more with the fast pace of fresh options in our Power Franchises.

And with the energy for sportswear at an all time high, NIKE continues to stand out in the active lifestyle marketplace through our authentic position in sport. And through our digital transformation, we're scaling the digital capabilities that will serve consumers more personally. And we're driving significant growth through our digital ecosystem, making Q3 NIKE Digital's first billion dollar quarter.

Put together, all of this work led to strong results for the quarter. NIKE Inc revenues grew 7%. On a currency neutral basis, NIKE Inc revenue increased 11%. Gross margin was up 130 basis points to prior year and earnings per share was $0.68.

Diving into the details, we launched some incredible innovations this quarter. Let's start with Nike Air. The major leaps we've made in new designs for the Air Max, like VaporMax and Max 270 continued to energize the consumers' ongoing love for the whole platform. Icons like the Max 95 and 97 and Tuned Air are a hit with both men and women. The Air Max Dia, our new women-specific design, is performing extremely well across the globe; and the Air Max 720, a radically unique silhouette was released in a number of bold colorways, creating a strong consumer response right out of the gate. We don't, however, take this high demand for granted. It requires constant fine-tuning and the right balance of seeding and scaling to ensure a healthy position in the marketplace.

But we know as long as we're making an impact with distinctive innovation like Air Max, our top platforms will continue to fuel our long-term growth. At the same time we are delivering a faster cycle of fresh assortments of our Power Franchises. We do that by offering more options of colors and materials inspired by more targeted and relevant storytelling, and the strategy is paying off.

For example, in our sportswear category, which continues to grow double-digits, the Air Force 1 is accelerating growth in both men's and women's. In the Jordan Brand where the business grew at a very healthy rate this quarter, the Jordan 1 is a top seller across all geographies. And in basketball, we drove energy with the Kyrie 5 and the LeBron 16 through multiple colorways and creative product storytelling. We also know there were several untapped opportunities within our innovation agenda and we have intensified our focus to amplify them.

For example, we're energizing the marketplace with statement innovation and going forward you'll see us bring more distinction at the core level. Specifically for next fiscal year we have fast-tracked new collections under the $100 price point and we're aligning the merchandising and marketing teams to support them throughout the marketplace. Apparel, as we've said, is another outsized growth opportunity. Over the course of the next year, you're going to see a sharper focus on key classifications in NIKE apparel. We'll accelerate growth by offering fresh options in our top sellers, much like we