Good afternoon, everyone. Welcome to NIKE’s Fiscal 2016 Third Quarter Conference Call. For those who need to reference today’s press release, you will find it at investors.nike.com. Leading today’s call is Kelley Hall, Vice President, Corporate Finance and Treasurer. Before I turn the call over to Ms. Hall, let me remind you that participants on this call will make forward-looking statements based on current expectations and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed with the SEC including forms 8-K, 10-K, and 10-Q. Some forward-looking statements concern future orders that are not necessarily indicative of changes in total revenues for subsequent periods due to mix of futures and at-once orders, exchange rate fluctuations, order cancellations, changes in the timing of shipments, discounts and returns which may vary significantly from quarter to quarter. In addition, it is important to remember a significant portion of NIKE, Inc.’s continuing operations including equipment; NIKE Golf, Converse, and Hurley are not included in these futures numbers. Finally, participants may discuss non-GAAP financial measures, including references to wholesale equivalent sales. References to wholesale equivalent sales are only intended to provide context as to the overall current market footprint of the brands owned by NIKE, Inc. and should not be relied upon as a financial measure of actual results. Participants may also make references to other non-public financial and statistical information and non-GAAP financial measures. Discussion of non-public financial and statistical information and presentations of comparable GAAP measures and quantitative reconciliations can be found at NIKE’s Web site, investors.nike.com. Now I’d like to turn the call over to Kelley Hall, Vice President, Corporate Finance and Treasurer.

Thank you, operator. Hello, everyone and thank you for joining us today to discuss NIKE’s fiscal 2016 third 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 and at our Web site investors.nike.com. Joining us on today’s call will be NIKE, Inc. President and CEO, Mark Parker, followed by Trevor Edwards, President of the NIKE Brand, and finally you will hear from our Chief Financial Officer, Andy Campion, who will give you an in depth review of our financial results. Following their prepared remarks, we will take your questions. We’d like to allow as many of you to ask questions as possible in our allotted time. So, we’d appreciate you limiting your initial questions to two. In the event you have additional questions that aren’t covered by others, please feel free to re-queue and we will do our best to come back to you. Thank you for your cooperation on this. I’ll now turn the call over to NIKE, Inc. President and CEO, Mark Parker.

Thank you, Kelley and hello everyone. Before we get into today’s results, I want to acknowledge the tragic events that took place in Brussels. We are thankful that all local NIKE employees and those traveling to the area are accounted for and safe. I know I speak for everyone on this and to the call, when I say our hearts go out to the victims and the families of those impacted by today’s attacks. Getting back to the results, NIKE delivered another strong quarter in Q3 with balanced growth across our expansive powerful portfolio. By the numbers, here the highlights. NIKE, Inc. revenues grew 8% to $8 billion. On a currency neutral basis, NIKE, Inc. revenues grew 14%.Gross margin was 45.9% flat to prior year and earnings per share increased 22% to $0.55. The foundation for NIKE’s success and one of our greatest competitive advantages, is our complete offense. It’s what gives us the power to use our size and scale to accelerate growth and the flexibility to stay nimble and fast. Through our complete offense, we serve a wide range of athletes personally across 13 categories, six geographies, men’s, women’s and young athletes, up and down the price points, in wholesale, owned retail and online. Our complete offense also creates a culture of shared innovation within NIKE where we turn insights from one sport into breakthroughs for all athletes, as we’re dealing with footwear platforms like Flyknit, Lunarlon, and Air or apparel with Dri-FIT and Tech Pack. And it allows us to create and curate a targeted mix of products, services, and environments into amazing retail experiences for consumers. We develop new concepts and collaborate with our wholesale partners to bring them to life in completely new ways around the world. The complete offense is our proven game plan…

Thanks, Mark, and good afternoon, everyone. The NIKE Brand delivered another strong quarter of growth and profitability, as our innovative products and compelling consumer connections continue to drive growth. On a constant currency basis, NIKE Brand revenue increased 15%, with double-digit growth across all geographies and nearly all key categories. NIKE Brand DTC revenue grew 29%, driven by 56% growth in online sales, 10% comp store growth and new store growth and finally Global Futures grew 17%. These strong results are driven as always by our relentless focus on the consumer. Consumers worldwide expect and demand cutting edge products, engaging experiences and powerful retail presentations. NIKE’s ability to deliver on all three strengthens our position as the brand of choice and builds our business around the world. To view how all these three come to life, you’ve to look no further than basketball where we were on a two category offense across NIKE basketball and the Jordan Brand. Our long history of success in NIKE basketball comes from creating the most innovative and exciting products. Thanks to the insights and inspiration from our great athletes. We saw tremendous sell-through of the Kyrie 2, which features a first of its kind contoured midsole and outsole designed to enhance banking and cutting on the court. And the Kobe 11 was incredibly popular offering high performance and lightweight design in a progressive low top that distills Kobe’s signature legacy to its very essence. Looking forward, I’m very excited about what’s to come in NIKE basketball. As we gear up for Kobe’s retirement, he will continue to inspire innovative products for years to come. We’ve already started celebrating his career with a monochromatic, retro collection called the Black Mamba Pack. I’m also incredibly excited about the signature basketball performance products that are coming including…

Thanks, Mark and Trevor and good afternoon to everyone on the call. Our strong third quarter and year-to-date results demonstrate first the power of NIKE’s uniquely diverse global portfolio of businesses. And second, the virtuous cycle of growth and investment that fuels NIKE’s long-term financial model. As Mark said, running a complete offense is one of NIKE’s many competitive advantages. We continually push ourselves to sharpen our game and better serve consumers in every dimension of our business around the world. That said, not every dimension of our portfolio will have the same level of momentum in each and every period. But as we relentlessly strive to run a complete offense, we do sustain strong momentum in the vast majority of our businesses while also acting quickly to turn challenges into opportunities in other dimensions. That portfolio dynamic is how NIKE, Inc. consistently delivers strong top line growth year-after-year. In the third quarter, we again delivered strong growth with revenue up 14% on a currency neutral basis. All geographies grew double-digits with Greater China continuing to set the pace. On that note, I was just in China three weeks ago, and I can sum up my visit in one word, amazing. Our brand and business in China have never been stronger. And we continue to build momentum. That’s not by accident. Our focus in China has been on fueling greater sport participation and love for sport, while also transforming the consumer experience along category lines both in store and online. We are now seeing increasingly deeper passion for sport in China and that is translating into strong demand for our products across multiple categories from NIKE basketball to Jordan, to Running, to Men's and Women’s training. To serve that fast growing demand, our team in China has already created some…

[Operator Instructions] Your first question is from Kate McShane from Citi.

Hi. Thank you. Good afternoon.

Hi, Kate.

My question was on inventory. I know you addressed them a couple of times in the prepared comments. But can you just drill down a little bit more to, where we are in terms of inventory composition? Are you still working through things in North America and are there any other areas where there maybe higher levels of inventory and in what categories?

Okay. Just to -- let me just give you just a little recap on the inventory as we discussed. Obviously we’re working to efficiently clear all the excess inventory and we actually made good progress in Q3, specifically on the flow of products is actually working through our North American distribution network is now normalizing. We also prioritize liquidation through our factory stores and we selectively utilized third party value channels. And we continue to actively manage the flow of the product in the inline market place to ensure that we can have the healthy pull market by the end of fiscal year ’16. At the same time the inventory is relatively fresh, its all very fresh product and so we feel good about where we are today in terms of making progress, and we don’t see any increasing areas, its really isolated to North America and its not a global issues.

Okay. Thank you. And if I can just follow-up with an unrelated question with regards to futures growth in North America specifically, are store closures or announced store closures having any impact on that growth in that futures window you announced today?

No, they’re not.

Okay. Thank you.

Feel good about the futures.

Your next question is from Lindsay Drucker Mann from Goldman Sachs.

Hello.

Hello.

Lindsay Drucker Mann, your line is open.

Hi. Can you hear me?

Yes.

Yes. We can hear you.

Sorry about that. Thanks for taking my question. I wanted to ask a little bit more on Andy’s reference to the need to invest in order to drive this virtual cycle of growth. As you think about your big areas of investment over the next year or so, is there any shift in where you had your emphasis in terms of investment? And perhaps you could update us a bit on how you’re thinking about supply chain investments and the opportunity to get -- differentiate yourself better with those?

Thanks, Lindsay. In terms of investment, we have shared with your our strategic priorities over time in some of the areas that we’re most focused on, those will remain largely consistent. Some of the investment I referred to in the near-term obviously related to some brand initiatives, phenomenal moments in sports around March Madness, The NBA Playoffs, The Olympics, European Football Championships. But as we look further out as we look more consistently to next year and beyond, we’re going to continue to invest in consumer engagement so that the digital capabilities as well as digital services, we’re going to invest in the operating infrastructure that’s required to support our growth. I referenced some of the investments that we made in our supply chain, in fact including in our supply chain in North America a lot of what transpired over the last year was us ramping up capacity and capability that’s going to serve us incredibly well long-term maintaining a pull market and flowing product to consumers. Those are the primary areas in which you’ll see investment. We’ll also continue to invest in the consumer experience at retail.

I’m going to add the product area, product innovation. Innovational basically in product and in manufacturing continues to be a priority and a major opportunity for the company.

Great, thanks. If I can just quickly follow-up, you discussed I think Trevor, you said in your prepared remarks, you referenced the replatformed stores in China versus the broader floor network. Could you just give us an update on how far along that initiative is?

Yes. As it relates to China, obviously we continue to be very excited about the continued momentum that we’re seeing in the Chinese business. The actual growth of 27% this quarter and then the futures obviously -- the futures growth is just what we thought was just amazing results. And the reason why we continue to feel confident about those results is the team there is really focused on driving the category offence and connecting with our consumers. The brand remains incredibly strong, and the work that we’ve been doing with our partners to re-profile the doors is actually paying dividends. They still represent a relatively small part of the overall -- of their overall business. So we continue to believe that there was still a lot of run way for us to continue to accelerate that business.

Yes, and Lindsay I’ll just add, in terms of dimensions of the marketplace, we’re seeing very strong comps in our owned doors. We’re seeing incredible growth in nike.com, and comps in the doors that we’ve re-profiled in the wholesale market place with our partners continue to be strong, and actually the -- what we’re implementing in those doors to feel growth is cascading into the rest of the market. But there is still a tremendous opportunity in the broader market in China as well as in our nike.com and other DTC businesses.

Great. Thanks.

Your next question is from Omar Saad from Evercore ISI.

Thanks. Nice quarter.

Hi, Omar.

Thank you.

You’re welcome. My first question kind of the P&L guidance that Andy gave, I’m trying to understand -- it looks like the gross margin trends you expect similar in the fourth quarter -- similar to what's been happening. But it looks like you’re implying a pretty significant deceleration on the constant currency sales line and simultaneously an acceleration [indiscernible] acceleration on the SG&A line. I wanted to make sure, A; I’m reading into that right. I’m interpreting your comments correctly, and maybe little bit color around those two line items. And then I have one follow-up.

Okay. Sure, let me hit -- you asked about revenue and SG&A. Our guidance for the full year remains consistent with 90 days ago Omar, both our revenue guidance as well as our SG&A guidance. One thing that has certainly transpired is we’ve moved forward a quarter. And so while we gave you full year guidance 90 days ago, you now have actuals and we’re given more specific items with respect to Q4. And as you know, we don’t manage line item-by-line item quarter-by-quarter but more the long-term focus and our trajectory continues on the same track. So I think what you’re seeing is you’re just getting a little bit more detail quarter-by-quarter, that one; it’s just the passage of time and two; the operating actions that we take in each quarter again are with more of a holistic focus than just adhering strictly to a line item-by-line item plan.

Thanks, that’s very helpful. And then, I wanted to ask a question about all the innovation unveiled next week. One thing we noticed was, some of the innovations are tied to downloading apps and there seems to be maybe even some limited sequenced releases around some of these new innovations which is maybe a strategy we’ve seen more in the basketball area with some of the limited edition products. Are you changing the kind of distribution and release strategy around innovation and this will tie into apps and things like that? Maybe help us understand what's going on there.

Well, first of all what you saw last week what we introduced last week in New York was, some of what is coming over the next year. So our -- with this in the Olympic years, we always have more innovation coming out of the pipeline than normally. I mean it’s pretty much the cycle that we’ve been on. It’s a focus that we’ve had in delivering innovation really since the past two or three decades. But I think what you saw last week was more at one time than we’ve ever introduced. We’ve actually edited that. There’s more innovation than what we showed in New York, both in product and on the digital front. That said, we’re incredibly proud of the spectrum, the scope of innovation that we had in footwear, in apparel, competitively in sportswear really much across the spectrum, the complete offense that I had talked about. And then in digital, obviously that continues to be incredibly important for us. I think you’ll see a stream of innovation coming from NIKE in that area. It continues to a high priority for the Company and obviously important to the consumer and the athletes that we’re hear to serve. So that will be the norm I think that to see that kind of steady stream of innovation. And this is what fuels our growth in the end is, the scope and the power of the innovation we have; not just in terms of any one product but the influence that those products have on all the categories and in some cases the brands within the portfolio. So we’re in a great position to leverage that innovation across a wider portfolio.

Thanks, it’s helpful.

The next question is from Bob Drbul from Nomura.

Hi. Good afternoon.

Hi, Bob.

Hi, Bob.

I guess the questions that I have, I think, the first one is, when you look at the gross margin performance, can you give us an update on the Flextronics relationship, sort of where you are in those initiatives and if that is impacting the business now, and sort of when we can expect it to start to [technical difficulty]?

Sure, I’ll take that one, Bob. Actually I mentioned I was in Asia three weeks ago. That was one; to visit the marketplace, but also to spend time with our team there leading our manufacturing revolution initiative which as you know is, includes our partnership with Flextronics and it’s even broader. In terms of the financial impact, we did see an impact in our gross margin a favorable impact from some of those initiatives. It’s obviously starting to build. We’re more optimistic about the impact of those initiatives long-term and I can tell you from being there first hand, it’s certainly reinforced and probably built my optimism in that regard.

Yes. As I said, this is a huge priority for the Company and a massive opportunity for us, not just in terms of being more productive and more efficient and improving our margin performance, but also in getting us closer to the market in advancing our sustainability goals, bringing customized solutions to consumers in the marketplace and that’s where the Flex -- this is where the Flex partnership is particularly valuable to us. We do a lot of work with Flex and we’re seeing the potential scaling that work between NIKE and Flex across our broader supply chain, both in our manufacturing partners around the world as well as even how we customize products here in the United States. So we’re very, very excited about where that’s going and the potential.

Great. And I guess just, on the business overall, on the revenue growth that we’ve experienced and you’ve seen so far, ASPs have been a big portion of that. Do you think near a ceiling with ASP growth or should we expect more units to drive the business. Can you just talk about how you see that playing out over the next several years?

Yes, Bob, I’ll start on that one. Average gross selling price continues to favorably impact margin, it did in the third quarter and I think when you look at our futures, you see that it’s having a significant impact on our futures growth, seven points -- percentage points. We continue to see strong demand for the innovative and new products that we’re bringing, of course in any given period we add it in shift as appropriate. But that continues to be in our view an element of gross margin expansion that we believe we can sustain.

Yes. And I’ll just add that, obviously our pricing strategy always centers on ensuring that we’re giving the right price value to our consumers. And right now the -- and continue going forward, our brand is very strong. And importantly as Mark kind of just touched on, we have an incredible amount of innovation. So we believe that ability to combine the brand strength along with bringing great innovation to the market it allows us to continue to actually deliver a premium value to our consumers, and that’s always the way that we look can drive our pricing strategy.

Great. If I could just sneak in one more quick one?

Bob, come on.

Okay, go ahead. Sorry, go ahead.

Go ahead.

So I guess, my question is -- is who had Syracuse and Gonzaga and who is going to win that game?

Now we know why you wanted to sneak one more.

I think the NIKE team will win.

Thank you.

The next as is from Robby Ohmes from Bank of America.

Hi, guys. Great quarter and thanks for taking my question. I wanted to ask about sportswear. I think it was and I think you guys called it out in every market. Can you give us a little more color on what's working so well in sportswear? Is it more apparel than footwear? Is it weighted towards the women’s strength that you’ve been calling out? Is it different drivers in sportswear by region globally even though it’s working well in every region? And also is there a -- is it a higher selling business right now than say Jordan or some of your other businesses? Just maybe some more color on why sportswear has been so great?

I mean I’ll tell you, in the beginning part of your question, I’ll kind of give you a big yes, yes, yes on all those dimensions in the sense that, our sportswear as we always talk about -- our sportswear strategy is aligned with our Amplify strategy. So we always drive a performance business and then amplify our sportswear from that. Right now we have incredible great products that are coming through on sportswear, that really hits on the multiple dimensions of that business, whether that’s footwear, look at the items line the, Air Force 1 Ultra Flyknit culture or the Huarache styles or the Roche styles all doing really well, the Air Max that we’re launching right now. So those are the great items in footwear. On the apparel side, we just launched the new Tech Knit collection which is doing phenomenally well in the market place, and so, which is a continuation of the Tech Pack, so we’re seeing that. And we’re also into that really multiple price zone, so whether it’s the most premium to the most premium value going all the way through. So it’s hitting on every single dimension. But what is true also, that you’re seeing sort of strong growth in the Jordan brand. So it isn’t one versus the other. We believe that the complete offense allows us to really drive and continue to drive all those dimensions of those business both from performance to sportswear from the NIKE brand to the Jordan brand, and that really represents the complete offense.

Yes, I want to add to that. When we say complete offense, we talk about that relative to NIKE in general. But you can dive into any category, in this case sportswear and there is a complete offense within sportswear. Today we’re actually clicking on about every cylinder in sportswear up and down the price points, around the GOs [ph], current revenues of the futures demand, bringing technology into the category which is creating a great deal of interest from a consumer standpoint that the ability for NIKE to leverage technology in sportswear in compelling ways is what creates distinction for NIKE in this segment. And that is going to be the case moving forward. We’re very bullish on where we are with sportswear now but really even more on the potential of what lies ahead.

That sounds great. Thanks so much guys.

Thanks, Robby.

We have time for one more question.

The last question is from Michael Binetti from UBS.

Hi, guys. Good evening. Thanks and great quarter. Thanks for getting my question in here. I think where we’re or I could use a little bit of help here just on the spread between the revenue guidance in the fourth quarter of the futures growth rate. I know Kelley and I talked about this intra-quarter. I think the past few quarters you’re pointing to a very wide spread between futures and revenues due to a few shifts that I think should have at least started to normalize or normalize by now. If I look at what that means in your direct to consumer business contributing maybe four points of revenue growth every quarter and a guidance from its singles in the fourth quarter. Can you help me reconcile between the 17% futures growth ex-currency and the mid-single digit revenue growth, it’s just a touch wider than we’ve seen in the past. I want to make sure we understand it. Thanks.

Sure, I’ll touch on that one. As you know just two level set, we obviously reported futures to give you an indication of demand for the product we’re bringing to market at full price in the inline channels, and we continue to see strong demand for what we’re bringing to market going forward. We also gave you revenue guidance, so that you -- you get a sense for all of the items that sort of reconcile from gross futures to the total revenue for NIKE Inc. There is several dimensions of that. I won't hit all of them. We do report them, but just -- just to touch on a few of them. The difference between seasons and quarterly reporting windows, seasons in our industry are about a month off of our quarterly reporting windows. The waiting of futures by a month, both of those things, seasons and waiting by a month can be impacted by a number of different factors ranging from shipping timing to consumers to events, like the European Football Championships, The Olympics et cetera, so those are certainly impacts. And then, you touched on one of the two other dimensions. One is, the lag between the futures order date for our DTC business and the timing of sell through to DTC and the consumers. And that is the dynamic as we have a fast growing DTC business particularly led by nike.com. The other dimension is, that while futures represent the vast majority of our revenue, there are some pretty significant items that aren’t reflected in futures and can be growing at various rates. That would be always available. NIKE factory store revenue, Converse for example. So there are a lot of factors. What we try to do for you guys is, give you a sense for demand again for the NIKE brand at full price that’s futures, and then do that reconciliation for you and give you the revenue guidance.

Okay. And then if I could just follow-up with one. On the fiscal ’17 early thinking, thanks for the -- some of the help on that, Andy. I know the five-year plan from the October analyst day was 10% revenue growth. So when you look at the high end of the guide to the low end of the guide, high singles to low doubles. What kind of dynamics would take you to the high singles which might be touch below the 10% and what kind of dynamics are you thinking about early on that could take you above that 10% mark?

Yes, it’s a great question. And I think, as I noted we’re still finalizing our plan. And one of the reasons we’re finalizing our plan is, there are number of dynamics, macroeconomic dynamics that can be headwinds to some extent, but there are also opportunities that are presenting themselves. And so, our guidance is in line with what we talked about at the Investor Day, high single digit to low double-digit, currency neutral revenue growth. And we -- and I think what you’ll see from time to time, obviously mostly to the positives that we’re looking at opportunities to connect even more deeply with consumers, and so we’ll update you on our guidance as we move forward.

Thanks a lot, guys. Have a great evening.

Thank you.

Thanks everybody. I appreciate you joining us on the call this quarter, and we’ll talk to you at year-end.

This concludes today's conference call. You may now disconnect.