Nike Inc (NYSE:NKE) Q3 2020 Earnings Conference Call - Final Transcript

Mar 24, 2020 • 05:00 pm ET


Nike Inc (NYSE:NKE) Q3 2020 Earnings Conference Call - Final Transcript


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Andy Campion

in North America. New York City and LA each grew double-digits, fueled by differentiated NIKE consumer experiences. As an example in LA we launched our newest Nike Live concept store in Glendale which blew past our expectations and significantly over indexed in terms of the women's business. Now, as of today we've closed our own stores in North America. Going forward, we will reopen stores on a location-by-location basis as we closely monitor developments. At the same time NIKE's digital demand has been extraordinary with NIKE digital commerce sales of just the past few days approaching holiday peak levels growing triple digits over just the past week. We've maintained operations in our distribution centers, implementing social distancing and reduced staffing while focusing on the shipment of digital orders.

Now let's turn to EMEA where we continue to build on our extraordinary brand momentum. In Q3 revenue in EMEA grew 13% on a currency neutral basis, with double-digit growth in most key categories. Women's growth strongly outpaced men's, apparel accelerated faster than footwear, and digital was up over 40%. The NIKE brand has never been stronger in EMEA. In every key city in EMEA consumers rated NIKE their number one favorite and cool brand. We also gained significant market share in Q3 across both footwear and apparel driving further brand separation.

Greater speed and agility also fueled our growth and share gains in EMEA in Q3 with over 30% of EMEA revenue and nearly 80% of EMEA incremental growth flowing through our Express Lane. In order to help limit the spread of COVID-19, we have also closed our own stores in Western Europe and select Eastern European markets. And similar to the US, we will reopen on a location-by-location basis based on developments. NIKE Digital continues to grow versus prior year and we're maintaining operations in our distribution centers, again shifting their focus towards digital distribution.

In our APLA geography, revenue grew 13% on a currency neutral basis. Growth was fueled by our key cities and was balanced across key categories, nearly all of which were up double digits. The Jordan brand in particular secular was incredibly strong in APLA, growing nearly 50% in the quarter, with new innovation like the Jordan Max 200, along with fresh new approaches to Jordan Icon all resonating with consumers. In performance running our accelerating momentum continued, especially in Japan where we dominated the Hakone Ekiden competitive race, seeing a record 84% of participants wearing NIKE. The energy around running in Japan is being fueled by the Vaporfly and NEXT% as well as a halo effect that is impacting other performance models like the Zoom Fly, Rival fine and Peg Turbo, which all grew triple digits in Q3.

Nike Digital grew 51% and wholesale grew double digits overall on a currency neutral basis as business with our differentiated strategic partners grew five times as fast as undifferentiated distribution. As we've said, APLA is our more -- most diverse geography. So we are seeing the impact