Good afternoon, everyone. Welcome to NIKE’s Fiscal 2016 Fourth 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 website, 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 fourth quarter and full year 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 website 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. Fiscal year 2016 was a strong for NIKE. Let's take a look at the highlights. NIKE, Inc revenues grew 6% to $32.4 billion despite significant FX headwinds. On currency neutral basis, NIKE, Inc. revenues grew 12%. Gross margin expanded 20 basis points to 46.2%. Earnings per share rose 17% to $2.16. And we delivered ROIC of 29.7%. Year end is when we reflect on our success is over the last 12 months. And I am proud to say that there were many for NIKE. But more importantly, this is a key moment to look ahead. To focus on the opportunities in front of us. We just kicked off an amazing summer of sport. Lebron, Kyrie and Cavs made Basketball history coming back from an unprecedented 3 to 1 deficit in the finals to win the NBA championship. It was a total team effort to be sure but the storyline of Lebron bringing its championship back to his hometown Cleveland will be down as one of the greatest in recent history. In Global Football, we saw a monumental win for Chile taking the Copa America Title for the second time in a row. In the European Championship after some remarkable moments were now down to the final eight. And we can't wait for Rio to watch the best athletes in the world under the brightest lights. As you know, the backdrop of our business is more dynamic than is ever been. But NIKE wins because we just don't adapt to these forces, we create and shape the change. We lead. For example, we are all seeing the growing power of sports. Participation is increasing all over the world. People are leading healthier, more active lives. At the same time, the rise in sport culture is…

Thanks Mark. I feel great about the results we delivered for the year. Once again illustrating the power of the NIKE brand portfolio. From our geographies and categories, from wholesale to DTC and across men's, women's and young athletes. In fiscal year 2016, NIKE proved yet again that the diversity of our business is one of our greatest competitive advantages. Let's take a look at the numbers. On the constant currency basis, NIKE Brand grew 8% for the quarter. For the year revenue was up 13% with double digit growth in nearly all geographies. NIKE Brand DTC revenue was up 23% for the quarter. For the year, DTC revenue was up 25% driven by online growth of 51% new store and comp store growth of 10%. And finally Global Futures are up 11%. The growth throughout fiscal year 2016 is a direct a result of a deep relationships we have built with consumers. Our relentless focus on individual athletes around the world bolsters those connections year in and year out. Whether at retail, online or at live experiences, NIKE's unique ability to serve the global consumer to the length of their favorite sport is what drives such consistent growth for the NIKE brand. To see this growth in action, let's take a look at a few of our categories. In Running, we delivered 10% growth for the year. With the category reaching $5.3 billion in revenue on a constant currency basis. Contributing to this growth was our Pegasus franchise and statement to power including the dry fit cool top, the AeroSwift short and the Power Speed tight. Q4 was also highlighted by key innovative footwear launch is led by the LunarEpic, a disruptive style that offers an amazingly smooth ride and remarkable soft like fit. Excitement is building for the…

Thanks Mark and Trevor. And good afternoon everyone joining us on the call. As we close fiscal year 2016 NIKE is better positioned than ever to continue delivering strong growth, expanding profitability and high returns on invested capital. While we are an increasingly dynamic macroeconomic environment, we have a management team with experience and a proven track record of working all of the levers within our business to deliver strong financial performance under a wide range of circumstances. Even more importantly, NIKE is the number rated brand by consumers in every major market and every key city around the world. From China to Europe and of course here in North America. That is perhaps the most important metric that I'll speak to you on this call. Because it is bestowed upon us by the consumers that we serve and it must be earned. NIKE Brand leadership with consumers is fueled by our authentic and relentless obsession with bringing inspiration and innovation to every athlete in the world. In fiscal year 2016, we brought that to life by executive our category offense like never before. And that drove strong double digit growth on a currency neutral basis. We execute our offense through three primary dimensions. Brand, product and marketplace. As Mark and Trevor noted, from a brand perspective we are more deeply connecting with and inspiring consumers leveraging the most iconic moment in sport. And from a product perspective our groundbreaking, innovative footwear and apparel is enabling the world's best athlete to perform at unprecedented levels and make history in those moments. We then bring those innovative products to our billions of consumers around the world. From the Lebron Solider 10 and the Kyrie 2 the LunarEpic in running to Cristiano Ronaldo's Mercurial SuperFly CR7 boot. At NIKE we always start…

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

Hi, good afternoon. This is actually Corrina Van Der Ghinst on for Kate. I was wondering if we could start with some of the category breakdowns that you gave. It looks like the Basketball category was actually up on an ex-FX basis. Can you just walk us through some of the dynamics of Basketball and how you're looking at it in the year ahead?

Yes, absolutely. On Basketball I think overall we continue to feel great about the Basketball business particularly as its trend in going forward. What we have -- we certainly have is 2% increase in the fiscal year and what we see is energy for Basketball is really high, it is really an all time high and in Basketball we have a really great relationship with Basketball fans around the world. We have a great fit roster players and what we are seeing is just the sell is actually starting really pickup particularly in key zones, the Kyrie 2 did exceptionally well. The Kobe also did exceptionally well. And we are -- also our Jordan because it's a portfolio of performance and sportswear and also the Jordan business, that is also continue to help to drive our business. So we feel really good about the trajectory of the Basketball business. In particular when you think about what's happen in globally we are certainly seeing strong results around the world. Certainly China really delivers some incredible growth. Also coming out of the playoff, the Lebron 10, Lebron Solider 10 did exceptionally well, also did the Kyrie 2. So we are definitely feeling energized about the pipeline of products that we have come in through and we are certainly excited about way the players continue to playing and our ability to continue to drive connection with our consumers.

Great, thank you. And then just for a second question, with the environment maybe a little bit worse than when you gave your long-term guidance in October. Is there any change about in how you're thinking about the long-term growth?

Actually no, there is not. We feel really good about where we are in general from a growth standpoint. We are obviously very focused on the actions that will get us to that goal and beyond for that matter. That's the basics of developing, keep a relationships with our consumers, obviously delivering the most innovative product and services and then further differentiating in an integrated marketplace. So these are things that I think ultimately are going to continue to drive profitable growth over the longer term. And we remain confident in those long-term projections that we laid out.

Yes. I'll just add that obviously currency markets have become increasingly volatile over the past week. That said our expectations for fiscal year 2017 remain largely unchanged from a growth and profitability perspective. And that includes our best estimate based on the information that we have of late.

The next question is from Jim Duffy from Stifel.

Thank you. Couple questions. First, the outlook implies a pick up in North American revenue across the US. Can you speak to the factors that give you confidence in that reacceleration?

Yes, obviously I can touch on that from a dimension perspective in terms of growth and Trevor can add some commentary on how he feels from brand and product and marketplace perspective. When you reflect on the fourth quarter for North America, I think it is important to note what I mentioned which is that the flat revenue growth was really more so a result of comparisons to prior year. We continue to see strong underlying momentum in the fundamentals that drive our growth and profitability. As you see in our futures orders, our futures orders are reflective of some of that. Dimensions, leading indicators in terms of consumer demand for the NIKE Brand such as nike.com grew 39% as I mentioned over the full year and actually north of 40% in Q4. So accelerated to some extent, so we continue to feel great about where we are going in terms of the transformation of that marketplace including through nike.com as well as through the relationship with our strategic wholesale partners and obviously how those dimensions capture growth relates back to the strong pipeline and product that Trevor and Mark touched on that we feel great about and are bringing to market currently.

Yes. I'll just add that the brand remains incredibly strong in North America. From a full year revenue perspective it was up 8% and as Andy pointed out futures are up 6%. And was really led by some key categories of Sportswear, the Jordan Brand, Running and Global Football. They also really drove the business, going forward we continue to feel very strong about the marketplace, the consumer demand in the marketplace and the consumers' connection with the brand continues to be very strong. And we feel very confident about the pipeline of products that we have come in through. And as I touched on Basketball, that's a key area where we continue to see just great energy in North America. And we are looking forward to actually the products that are coming through and how they will sell through and connect with our consumers.

Thanks for that. And then on recent conference calls, some of your North American channel partners have made reference to imbalances in the price value equation. What are you seeing from average selling prices in the futures, and are you seeing any evidence that pricing may have taken a step too far?

Yes. As I touched on in our futures we are actually seeing seven percentage points of the growth coming from average gross selling price increase. Now that's obviously an aggregated number. Average gross selling price continues to expand, full price average gross selling price in a mid single digits in North America. We really view that as a factor of the innovation we are bringing and creating increasingly premium value for consumers. Running a more complete offense bringing premium value at every price point versus trading with end price points. And then frankly one of the things we've been very focused on as we've discussed is really that supply and demand management at the intersection of those as merchandizing with assortments that are increasingly selling through a whole price.

Yes. I think as Andy really touched on our pricing strategy always centers on delivering the right price value equation to our consumers. And certainly the strength of the brand and the ability on some of the technologies that we bring allow us the opportunity to charge the premium price. And we are certainly seeing strong take up from that from our consumers. So if you look across the categories from sportswear to Basketball to running, we are certainly seeing the consumer have really strong appetite for those products. You can take the Kobe 11 is a great example of when you give the right value to that consumer, they are clearly willing to pay the price. So again we continue to monitor it very carefully and our pricing strategy always reflects our ability to adjust as we think appropriately. But certainly we feel that the pricing continues to be strong opportunity for the brand.

The next question is from Lindsay Drucker from Goldman Sachs.

Thanks, good afternoon, everyone. Trevor, you've talked before about the importance of establishing healthy pull markets in periods where there's dislocations in inventory, and I know you've been working through the inventory dynamics in the US for a bit. Could you talk about when you expect the market to finally reach appropriate levels and for momentum to resume to where you think an underlying run rate is?

Yes. Certainly. As it relates to the inventory level, certainly at the end of Q4 inventory levels in the full price channel were pretty consistent to what we discussed at the last quarter. As we go into the next quarter we expect clearly to remain in excess inventory through our factory stores and also through select third party value channels. But overall the inline full price market is clean and we continue to just make sure we maintain and sustain a healthy pull market and also to bring into new products and make sure that we are actively, proactively managing the flow of product into the marketplace.

And Lindsay I'll just add that as we've discussed you have a couple of dimensions at the marketplace at a more macro level as Trevor talked about. The full price in line market and then the other dimensions where we do tend to address those inventory management efforts in NIKE factory stores and through third party value. The mix of that margin full price and half price obviously had a bit of an impact in Q4. And as I talked about will be part of the North America gross margin contraction in Q1. But as I noted, we expect gross margin to return to expansion in North America over the course of fiscal year 2017. So that's more of an answer to your question about how you see things normalizing.

Great. And then maybe just on Europe, where your organic revenue momentum is very strong. Could you talk about the drivers of margin behavior in that market? And just a quick follow up. For the LunarEpic, I noticed that you guys are trialing 30-day free and you can return dirt and all, which I'm excited to get involved in. And I was just wondering about maybe some of your marketing strategies on new products, if that's something we could see more broadly across the portfolio, or if it's really specific to this launch. Thanks.

Sure. I'll touch on Western Europe first. The fundamental underlying drivers of our margin are pretty consistent in Western Europe. Western Europe is seeing continued increases in average gross selling price. All of our geographies benefit from some of the efforts we are undertaking in our supply chain. So that would be our manufacturing initiatives which are beginning to have an impact. We saw an impact from those in fiscal year 2016 that increasingly material. Obviously, our long-term perspective is where we are most bullish but we have shifted from plant and pilot program to more proliferation of automation in our manufacturing in Asia as well as we've actually begun production on inline running product with Flex. So those initiatives and then coupled with impact such as lower oil on our input cost particularly materials. Those are the drivers of expansion in Western Europe.

Yes. And as relates to the LunarEpic, obviously we are excited about the continued launch of the LunarEpic. One of the things about that product is that when you actually put it on, it is just remarkable in terms of its feel. So in terms of the marketing strategy to launch the product and wanted to make sure that they drove trial and got people who are actually putting on their feet. Also given that it was a high job, we wanted to make sure the consumer could really see how and experience that product. That's what we continue to do. One of the things at the marketplace right now is certainly a high service marketplace and so the opportunities to give consumers the ability to actually use the product were just a key driver. And so I think you expect us doing that more in the marketplace.

The next question is from Matthew Boss from JPMorgan

Hey, thanks. So just to switch gears can you talk about trends you're seeing and just the runway remaining in China, specifically where you stand on the reset of the distribution points and just to think about the margin opportunity remaining over time?

Yes. On China, China is really just a great example of -- we are certainly seeing really strong brand connection in that marketplace. And the work that we did few years back when we decided to really focus on the biggest growth opportunities and aligned the category offense against that. That's where we are seeing actually playback in the marketplace. In addition, we re-profiled the doors to make sure that we had the right assortments in the right doors delivering. That is actually now getting closer to scale. So we are seeing that continue to drive great results in the marketplace. And so overall the marketplace is very healthy and we still have a lot of room to grow despite the fact that we are certainly seeing these -- these certain tremendous growth numbers. We don't believe that they will sustain forever but we certainly do feel very confident about the growth that we are seeing in the marketplace today.

I'd like add to the -- apart from better managing the fundamentals of the business as we reset the marketplace in China and the brand strength that Trevor referenced, we also have an incredibly strong leadership team in China that is really well equipped to continue to sustain the kind of momentum that we built since the reset in China. So feel very confident with all those factors kind of coming together to create one of the strongest performances that we see in any geo around the world.

Great. And then just a quick follow-up, as it relates to Basketball, your commentary in matches or checks points to very strong demand for the recent KD launch. Can you just talk about changes that you've made to the product? What we should be watching and judging you on as it relates to signature Basketball, and just overall your confidence in the category going forward?

Yes. Let me jump on that. First of all, I think we have -- we've always talked about complete offense. And that goes for any categories as well. Certainly including Basketball where we have two obviously leading brands in Basketball. We also have spectrum that goes from performance to sportswear or we call it amplified performance or sportswear business. And we see the shift happening up and down that spectrum from performance to lifestyle or sportswear all the time. It's not so much of shift from one end of the spectrum to the other but was the shift by style preferences across that spectrum. I think the good news for us is that we are really well equipped with a very diverse portfolio that goes from clean, classic, authentic styles like the Air Force One for example or the Jordan style. Then we have modern classics on top of that where we bring new innovation into some of that classic style. New modern performance shoes as well like the Lebron and KD, Kyrie, these are all very strong products for us particularly with what's coming in the pipeline, we feel with the recent launches of KD and the upcoming Kyrie and certainly the Lebron shoe that we really feel like we are striking that right balance between performance innovation and product that really works well for everyday lifestyle. So very confident in the portfolio of product across Basketball.

And the one thing I'd just add is also that the Jordan Brand also is another dimension and it plays in a very similar way and we certainly seen very strong demand for the Jordan brand both in performance and also in lifestyle retro product. So, again we feel very energized about the products that are coming through Basketball.

Better equipped up and down the price points spectrum too as part of our complete offense. Feel very good about that Basketball.

The last question is from Omar Saad from Evercore ISI.

Thanks for taking my question. I actually wanted to continue the conversation you were just having around performance versus sport fashion. Obviously, the Company has been great on the performance and innovation side, driven by the category offense, some incredible product over the last few years. But are you seeing a trend -- beyond basketball, but are you seeing a shift in consumer preference towards more of a sport fashion look or a sport fashion category, or is that more of an incremental kind of driver to the overall category growth? I know you talked a lot about also earlier in the call sportswear being a very strong category, so if you could elaborate on some of that stuff it would be great.

Yes. What I just mentioned we see shift taking place month in month out, season in and season out along the lines of style preferences not so much moving to sportswear or performance per se. But just a type of styling that we are offering in performance and sportswear. So the selection isn't so much moving from one massive shift to another but it's more style specific. And we are seeing really the diversity of style across the spectrum from performance to sportswear with products that are highly priced in some cases that are doing incredibly well both in performance and in lifestyle. But we are seeing that up and down the price point spectrum. We are also bringing like I mentioned one of the things that differentiate NIKE I think from others is the amount of innovation that we are bringing into sport style. I think that's what differentiates NIKE in the end. We have an authentic product that is innovative across performance and sport style. We are not just creating a style just for fashion sake; we are bringing real performance, authentic innovation into those styles as well. So I think that ultimately differentiates NIKE from others out in the market.

And one thing I'd just add which is while consumer preferences can sometime shift around; we think we have the brand as best positioned actually to serve the consumer across the spectrum from performance to sportswear. That's why we always talk about the portfolio of the NIKE Brand; this is really that when it comes into action. So right now we are just seeing our ability to leverage that portfolio to connect with our consumers with the right products with the right style at the right prices.

Sometimes the innovation is more overt and expressive and on the other hand simpler and more restrained. And we are seeing that consumer choice up and down that spectrum. The point really is that NIKE is I think ultimately better positioned with compelling choices across that spectrum.

And if I may, can I ask when can we start seeing some of these sport style innovations that you have coming in the footwear side or the apparel side? Is it out there in the marketplace now? Are there examples you'd point to? We would be interested that too.

Yes. Actually we mean a lot of products are actually out in the marketplace right now. So take for example the Air Force One Flyknit, that's a great example of, a combination of new innovation grow to classic style. At the same time we are bringing items like the stock dart back into the marketplace, there are Roshe, the Prestos and then on the performance side you certainly have -- we have tech fleet and apparel or the tech NIKE in apparel is also great examples. All of these products are in the market today. And they certainly combined that ability to have both great style and performance having at the same time.

And you will continue to see this flow of product continue through this next fiscal year of course.

All right. Thank you, everyone for joining us on the call today. And we will look forward to speaking with you again after Q1.

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