NIKE, Inc. (NYSE:NKE) Q3 2023 Earnings Call Transcript

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And then on the membership and marketing side, the idea that if we’ve got more members coming in through the top of the funnel who are more engaged and buying more frequently, we should start to see an improvement in our ROAS or return on ad spend from a digital perspective and give us a lot of confidence that we’re building a moat to be able to continue to serve and grow our digital business. So those are two examples, in particular, of us working hard to improve even greater the profitability of our digital channel. I think as we look longer term, we remain confident in our ability to continue to drive towards the long-term goals that we’ve provided. Obviously, this year, we’ve seen higher markdowns and promotions in our direct channels as we’ve been moving through excess inventory, but we think those are transitory costs, and we should begin to see the recovery of those beginning in fiscal year ’24.

Paul Trussell: We have time for one last question.

Operator: That question will come from Gaby Carbone, Deutsche Bank.

Gabriella Carbone: My question is on EMEA. Curious if you can dig into what you’re seeing in the region? It seems like it continues to be quite resilient despite the macro environment. But are you seeing any meaningful differences between countries?

John Donahoe: I mean I’d just say a broad statement, and then Matt, you can fill in some of the specifics. The EMEA consumer has held up remarkably well. And what’s clear is our brand strength has really strong across demand. That’s both for NIKE and Jordan. You saw really strong across channels, digital, very strong this entire year as well as this quarter as well as our direct and wholesale channels. So the brand connection with NIKE across our major fields of play across NIKE and Jordan is as strong there as it is anywhere.

Matthew Friend: Yes. And I just would add that we’re running a complete offense in that marketplace, and we’ve seen strong growth across brands, across performance and lifestyle, across different genders, sport dimensions, up and down price points. I mean we’re — that team is doing a phenomenal job running a complete offense there. And when we look across the country portfolio, several quarters ago, we had highlighted some softness in the UK, but we’re continuing to see strong growth across all of our Western European markets and including the UK, which has bounced back. And so as we look at the dynamics that John referenced, we’re continuing to focus on driving authenticity for the brand through sport and in lifestyle in that important region.

And I’ll be honest with you, a lot of things that resonate and incorporate and sneaker culture around the world find their place starting in the Europe market. And so our closeness to the consumer in that market is critical not just to drive growth in that region, but to drive trends and behavior in markets outside of that region.

Paul Trussell: Thanks for the question, Gaby, and thank you all for participating in our Q3 earnings call. This concludes the conference call for today. We’ll talk to you next time. Thank you.

Operator: Thank you, everyone. Once again, that does conclude this call. You may now disconnect.

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