Kelley Hall - Vice President, Treasury and Investor Relations Mark Parker - President and Chief Executive Officer Trevor Edwards - President, Nike Brands Don Blair - Chief Financial Officer.

Kate McShane - Citi Omar Saad - ISI Group Robert Ohmes - Bank of America Bob Drbul - Barclays Jim Duffy - Stifel Nicolaus Michael Binetti - UBS Eric Tracy - Janney Capital Markets David Weiner - Deutsche Bank.

Good afternoon, everyone. Welcome to Nike’s fiscal 2015 first quarter conference call. For those who need to reference today’s press release, you will find it at http://investors.nikeinc.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 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, http://investors.nikeinc.com.

Now, I would 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 2015 first 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 website, investors at nikeinc.com. Joining us on today’s call will be Nike, Inc.

President and CEO Mark Parker, followed by Trevor Edwards, president of the Nike brands, and finally, you will hear from our chief financial officer, Don Blair, who will give you an in-depth review of our financial results. Following their prepared remarks, we will take your questions.

We would like to allow as many of you to ask questions as possible in our allotted time, so we would appreciate you limiting your initial questions to two. In the event you have additional questions that are not covered by others, please feel free to re-queue and we will do our best to come back to you. Thanks for your cooperation on this.

I will now turn the call over to Nike, Inc. President and CEO Mark Parker..

our relationship with athletes and consumers, our ability to innovate, and the power of our portfolio. Those advantages are the foundation for the Q1 results we just reported, and the competitive separation we’re driving in the marketplace. First, our relationships with athletes and consumers are unparalleled.

By relentlessly focusing on what they want and need, we propel our business forward. We use the insights we gain to deliver the products and services and experience athletes and consumers want.

The lens we use to focus these relationships is our category offense, and the power of that approach is most clearly seen during global sports moments like the World Cup. These events provide us with the opportunity to showcase our most innovative products, as the world’s greatest athletes inspire us with their performance and their passion.

They also create tremendous energy throughout the year, as we leverage these innovations and athlete stories to deliver compelling products and experiences to consumers through their favorite sports. As I think about the evolving consumer landscape, there are a number of trends that play to Nike’s strengths.

The middle class is growing around the world, interest in sport continues to grow, and consumers are investing more and more in their own health and fitness. Apparel and footwear styles are becoming increasingly athletic. Because we know the consumer better than anyone else, we’re able to leverage these developments to accelerate our growth.

As a result, we turn trends into real business momentum. Second, let’s talk about innovation. At the heart of our ability to achieve long term growth is our unrivaled ability to innovate.

Nike delivers impressive innovations because we’ve developed ever-sharper insights from athletes and consumers, and we harness the power of new technologies, designs, and materials. Our capabilities today are greater than they’ve ever been. Our challenge is to edit and focus those capabilities on the most significant opportunities.

And when we do this effectively, we accelerate the pace of innovation, we create competitive separation, and we deliver results, like we did in Q1.

In just the past 90 days, we’ve demonstrated the versatility and potential of our advanced Flyknit technologies, with products in running, global football, basketball, and most recently, football in the U.S.

The consumer benefits are incredible, and looking ahead, I know the potential for this is significantly increasing the scope and scale of this technology is very, very real.

We set new levels of performance in apparel with products such as the Nike Dri-FIT rain jacket, the Nike Pro collection, and the further extension of our Dri-Fit Knit and collections like Nike Tech Fleece continue to drive growth and distinction by leveraging technical performance features in the premium sportswear apparel.

We launched the Air Jordan 29, our lightest Jordan ever, bringing a new level of basketball performance to the Jordan brand. And just last week, we expanded the potential of our Zoom Air technology with the launch of the LeBron 12. We have some very ambitious plans for this signature Air technology.

I can’t tell you much more now, but I will say that the LeBron 12 is just the beginning of the revolution. It’s important to understand that Nike’s innovation agenda goes beyond products. It touches everything that we do. One example is how we’re leveraging the power of digital. The digital world moves fast, and Nike is at the forefront.

We’re employing new ways to engage consumers online as we create communities, services, and ecommerce experiences that fuel our growth strategies around the world. These strategies are strengthening our relationships with consumers and driving our business, as ecommerce revenues were up over 70% in the first quarter.

Going forward, we will innovate at an increasingly rapid pace. We are a growth company, because we are an innovation company. That is why we are committed to sustained investment in this area. We know it fuels top and bottom line expansion and drives value for our shareholders.

And when I look at our innovation pipeline, I see innovations that will, no doubt, surprise and delight, innovations that are better for athletes, consumers, and the planet. I couldn’t be more excited about what’s coming. The final competitive advantage I want to highlight is the power of Nike’s portfolio.

It’s a complete offense that encompasses brands, geographies, categories, product types, and channels. When all these components are working together, the portfolio generates amazing growth, and when we double and triple click into the various dimensions of our business, we see even more potential.

The diversity within our portfolio is a tremendous competitive advantage. It allows us to thrive in a rapidly changing environment, create separation, and ultimately expand the market. Trevor will discuss the Nike brand’s outstanding Q1 results in more detail, but let me give you three highlights from my point of view.

One, the Nike brand is strongly resonating with consumers around the world. We’re delivering robust growth and profitability in some of our largest geographies, maintaining momentum in North America, accelerating growth in Western Europe, and turning the corner with strong results in China. Two, our category offense is accelerating growth.

Our largest performance businesses, running, basketball, and global football continue to expand. Sportswear grew at a strong double digit rate, and our women’s and young athletes businesses grew rapidly, in fact faster than our men’s business. And three, we’re driving growth across an integrated marketplace.

DTC revenues grew over 30% in the quarter, and our wholesale business grew double digits, reflecting strong growth in stores and online. I’ve said that becoming a better retailer would make us a better wholesale partner, and our Q1 results are only the beginning.

We have been extremely thoughtful about the investments we’ve made against our biggest growth opportunities across the portfolio. From accelerated product innovation, to enhanced consumer experiences, to sharply focused retail executions, it’s the integration of complementary strategies and investments that leads to an acceleration of growth.

And we will continue to make strategic investments to drive growth for years to come. I’m tremendously proud of our Q1 results, the momentum and our management team’s ability to seize opportunities and manage risks. At the same time, I’ve never been more excited about the potential to raise the bar even higher in the future.

Thank you, and now here’s Trevor..

wholesale and DTC, in line, factory, and online, in nearly all key categories and across our men’s, women’s, and young athletes businesses. The category offense is unlocking new areas of growth in North America by serving the unique consumer segments. The more we focus and separate ourselves, the more potential we discover in our largest geography.

Ultimately, the strategies we have deployed around the world are working, and the investments we have made are yielding tremendous results. I am proud of the accomplishments, and excited about the opportunities as the momentum of our business continues to accelerate. To put it simply, Q1 was a great quarter, and we’re just getting started. Thanks.

Now, here’s Don..

sportswear, basketball, and running. As Trevor discussed, we’re seeing the results of our strategies to sharpen our product assortments and reset the marketplace.

On a reported basis for Q1, China revenue rose 18% while EBIT grew 28% as higher revenues and gross margin expansion more than offset the impact of SG&A investments in DTC and our new Shanghai campus.

On our last earnings call, we projected revenues in China to grow at a somewhat faster rate in Q1 than for the full year, due to changes in seasonal product flow and significant variations in prior year comparisons. Q1 growth was even stronger than we expected, due to higher DTC revenue growth and at once sales.

We expect these trends to continue, driving FY15 revenue growth for China to a low to mid-teens rate, with the growth heavily weighted to the first half. In the emerging markets, currency neutral revenues increased 10%, reflecting revenue growth in every territory except Mexico and our Latin American distributors.

From a category perspective, the growth was led by double-digit growth in sportswear, running, global football, basketball, and women’s training. On a reported basis, Q1 revenue for the emerging markets grew 4%, but EBIT declined 26% as a result of marketing investments in the World Cup and FX headwinds in a number of markets.

We remain confident in the significant growth potential of this geography, and as Trevor discussed, we’re focused on doing the right things now to evolve these developing marketplaces and further strengthen our brand to generate sustainable, profitable growth for years to come.

First quarter revenue for Converse increased 16% on a reported and currency neutral basis, driven by market conversions in Europe and Asia, as well as continued growth in direct distribution markets such as the U.S. and the U.K.

EBIT increased 10% for the quarter, as revenue growth was partially offset by investments in DTC and infrastructure to support the brand’s long term growth and profitability. We entered FY15 with tremendous brand and business momentum that drove outstanding Q1 financial results.

Our updated FY15 guidance reflects continued momentum over the remainder of the year, fueling sales growth in revenue and EPS as well as enabling continued investments for sustainable, profitable growth. For revenue, we now expect constant dollar growth for Q2 and full year in the low double digits.

This accelerated growth reflects robust consumer demand in our largest markets and categories, with particular strength in our DTC business. Our current outlook for reported revenue growth is 1 to 2 points lower, reflecting the stronger dollar. We now expect gross margin for Q2 to expand by 125 to 150 basis points.

This is above our prior expectations, as our strategies to increase average selling prices continue and growth in our higher margin businesses, including DTC, continue to accelerate. These benefits will help to offset increases in product input costs, particularly labor and our actions to clear excess inventory in the emerging markets geography.

In addition, given current exchange rates, we expect FX will have a neutral impact on gross margin for the balance of the year, versus the benefit we recorded in Q1. For the full year, we now expect gross margin expansion of about 125 basis points.

As both Mark and Trevor discussed earlier, our growth strategies are working, and we’ll continue to invest in them. We expect demand creation to grow at a low double-digit rate for Q2, and at a high single-digit rate for the full year.

Operating overhead is expected to grow at a high teens rate for Q2, and at a mid to high teens rate for the full year, reflecting higher variable DTC expenses as well as investments in digital innovation and key operating capabilities. For full year full year 2015, we now expect the effective tax rate will be approximately 24.5%.

Overall, assuming no material changes in FX rates, we expect earnings per share to grow at a high teens rate for Q2, and about 20% for the full year, reflecting strong top line momentum and continued gross margin expansion, partially offset by strategic investments in our biggest growth drivers.

Q1 was a great start to the fiscal year, and we remain confident in our ability to drive strong growth and deliver shareholder value. We’re now ready to take your questions..

[Operator instructions.] Our first question comes from Kate McShane with Citigroup..

My first question is on China. Don, you had mentioned that you expect the growth to be stronger in the first half than the second half.

What happens in the second half that gives you a little less confidence that you can achieve that same level of growth that you expect for the first half?.

Yeah, it’s really not related to this year’s momentum. It’s really the comparisons to the prior year. We do believe that we’ve really seen fantastic improvement in that marketplace, and so this is not a belief that there’s any lack of momentum in the back half. It’s really the comparisons to the prior year..

And then my second question has to do with the category offense in Europe. It sounds like women’s is really starting to work very well.

And I wondered if, in regards to just the overall category offense in Europe, will we see another wave or another level of category offense for women in Europe now? Or is it all happening concurrently?.

Just to hit on the category offense, of course, we’re obviously very pleased with the results that we’re seeing in Western Europe.

And it really comes back to the decisions we made a couple of years ago, when we decided to really reset the offense and really get focused on the category offense in Western Europe, with a more centralized model which allowed us to get closer to our account and work with them to really help expand the marketplace.

So we’re seeing tremendous benefit, actually, come from that. So strong resonance with consumers. Around the women’s business, specifically, yes, we have now, as we said, focused it on our both running, women’s training, as well as our sportswear business. That offense is actually running in Europe.

And again, we’re also seeing a really increased drive around sneaker culture, building around women in Western Europe. So we feel very positive about the growth that we’re seeing. And more importantly, we feel very positive about the long term potential of the opportunity in Western Europe and actually around the world..

The next question comes from Omar Saad of ISI Group..

The ecommerce number this quarter was kind of through the roof, the acceleration from last quarter and from last year, off of really kind of a very high growth already.

Did something change? Did you open up new markets in terms of the digital ecommerce front? Is there a new logistical capability there? What’s the underlying driver of that pretty significant acceleration? And then is that sustainable? Do you have the logistics and the inventory in place to kind of maintain that type of growth rate there?.

We’re very bullish on our ecommerce opportunity. We’ve invested quite heavily in improving our operational capabilities or supply chain. We’re seeing, again, the category offense really resonate through dotcom. Obviously, it is the preferred channel, where a lot of consumers are shifting and moving. Women’s business is up significantly in that mix.

Our customization, or Nike ID, up significantly. Running, sportswear, really across the main key categories, we’re seeing tremendous resonance in that channel. This will continue to be a major growth opportunity for Nike, and definitely a source of further investment.

We think that the return on this investment will be as strong, frankly, as anywhere we have in the company. Very bullish. Top, top priority for the company, and continued opportunity for growth and profitability..

One of the things I’d just add to that would be on, using the category offense, we’re able to basically segment and understand how to grow the running business, the women’s business, each of the different dimensions of the business, so that our teams are squarely focused on doing that.

So we think that’s also really helping to accelerate the growth that we’re seeing in the ecommerce business..

Thanks, and then, switch gears on my second question. Around the endorsement strategy, the sports marketing assets, you had some things happen over the last 90 days or so. You were able to keep Kevin Durant. It sounds like the Manchester United contract moved somewhere else.

How do you think about it philosophically, strategically, or how should we think about where you want to make those investments, and which cases you might not want to make those investments? Or is there no rule of thumb, it’s really just individual case by case, where you see the opportunities?.

First, I’ll just start by saying that obviously we believe very much in the power of sport and athletes to inspire people. So we’re obviously very focused behind that. And obviously, some of the things that have been happening, it’s been quite a mix in the marketplace. Obviously, some issues are seriously concerning to us.

On the other side, you have some great opportunities with some great athletes like Kevin Durant and our ability to re-sign those athletes. So from our perspective, we really line up how we connect and sign the right athletes, really based on where we see the biggest growth opportunities.

We line those two things up and we make sure that we find the athletes and the teams that can inspire consumers and at the same time make sure that we can use that to then drive our business. And we remain singularly focused on that..

You know, the athletes aren’t just a source of or a platform to promote the brand and to get brand exposure. They’re the source of insights that we get. The relationships we have with the athletes are really what drives the innovation that ultimately drives our business and our growth potential. So that’s been there since day one.

That will continue to be the case moving forward..

The next question comes from Robert Ohmes from Bank of America..

Two questions. The first, so the North American footwear growth, up strong, still up, I think 15%. Any channels of distribution in North America that are outperforming that you could call out? And then the second question is, the sportswear double-digit growth, I think you mentioned it for North America, China, and Europe.

Can you remind us how long sportswear has been growing at that rate and when the change was, and what’s driving that acceleration in that part of your business?.

Around North America first, I would say that obviously we’re seeing great momentum in North America. And we think it continues to demonstrate the power of the category offense. You know, the ability for us to really connect with the consumer to make sure that we can drive the right products into the market, the most innovative products.

And we’re seeing incredible sell through amongst all of our products. So really, we’re seeing it across all the different channels. It’s pretty balanced in terms of the strength, so really on every dimension, as we mentioned, we’re just seeing great growth.

One of the things, we’re very proud of the relationships that we have with our wholesale partners, our retail partners, because they really are working with us to better dimensionalize the market so we can continue to grow it. So we’re seeing just great growth from that.

Then specifically around sportswear, if you recall over the couple years, we’ve certainly seen sportswear business grow double digit. Certainly on the premium part of the business. Where we saw the lagging part was certainly around the more entry priced opportunity. We’re seeing that business really strengthen too.

So that’s really helping to buoy the results that you’re seeing around sportswear. So again, it’s when all the pieces start to work together, both footwear, apparel, as well as both the premium and also the entry business. And we’re seeing that really play in all the markets that you mentioned..

Your next question comes from Bob Drbul with Nomura..

The first question that I have is, the DTC up 30, ecommerce up 70, do you believe that you’re seeing any signs of potential cannibalization with your wholesale/retail partners anywhere?.

No, I wouldn’t say that. Like I mentioned before, the thing that we’ve been able to put in place is this idea of an integrated marketplace. And DTC plays a role that’s been a complementary part of the marketplace. So we’re able to actually bring more dimension to the market by serving unique segments.

And that allows the market to be more segmented and more differentiated. And we believe that’s [unintelligible] incredible amounts of growth. The other piece that we’ve talked about is the idea of us being a better retailer ourselves, so we can be a better wholesale partner.

And that is actually working, so we’re able to transfer a lot of the learnings that we have done in our own stores, working with our retail partners around the world to accelerate their businesses too..

And my second question is, around the NFL business, can you just comment on sort of the sales trends of the jerseys and the sportswear? And specifically, I can’t seem to find a Richard Sherman jersey for my son, and I was just wondering if you could maybe talk to the process of selection on which athletes you’re choosing for the jerseys these days..

[laughs] I will try and find out exactly where your son is and make sure that you can get one..

Bob, I’ll help you with that. We’ll let Trevor answer the business question..

The NFL business continues to perform really well, and so we have a great relationship, a great partnership with the NFL, and we continue to see the jersey business grow. It didn’t grow as fast as it did the prior year, and that’s obviously because we had brought newer uniforms in, but we certainly see good growth in our NFL business..

Your next question comes from Jim Duffy of Stifel..

The first, increases in ASPs in the futures has been really impressive.

What are the ongoing opportunities in ASP, and what’s your feeling on the sustainability of that trend? And then secondly, what are some of the opportunities in the supply chain for efficiencies to offset some of the inflationary inputs that you’re seeing?.

Certainly on the pricing side, what I would say is that, you know, we have been really focused on ensuring that we give the consumer the best value, and we really start there.

And we’re making sure that, given the strength of our brand and the power of the innovation that we bring into the products, that we have the ability to really command a premium price.

And we’re able to do that not only in individual markets, because we work specifically in each market, to make sure that we’re paying attention to the market dynamics so that we can obviously give the consumer the most value..

And I think, Jim, on your second question, about the supply chain, we’re working really across the whole supply chain and harvesting opportunities all the way from manufacturing modernization and implementation of things like Lean manufacturing or improved human resource practices in the factories, doing some factory automation, as I said, all the way to more revolutionary technologies like Flyknit.

We’re also continuing to work on streamlining the whole supply chain and making sure that we’re matching up the supply and demand as tightly as possible, which reduces closeouts and maximizes margins. So there’s a tremendous number of opportunities.

We feel that we’re going to be able to continue to take advantage of some of those things as we work to offset input cost inflation..

Let me add that the manufacturing revolution focus is a big one for us. It’s not only a place where we can see some margin opportunity by scaling some of these innovations that are really, in a sense, game-changing. And we’re talking beyond Flyknit.

We’re on the verge of moving some other what we call man rev, or manufacturing revolution innovations to a much larger scale. So there’s a great opportunity there.

And those processes actually allow us to create products that are more innovative at the same time, to actually improve performance while we actually get some margin opportunity at the same time..

Some of the increase we’re seeing in ASP, is that a function of the supply chain, just better managing the flow of inventory and having less discounting?.

We have seen some benefit to that in most parts of the world, certainly. But I think as Trevor said earlier, the improvements in ASP are really two things. It’s really the value equation and how we approach the consumer from a pricing standpoint.

It’s also the tremendous strength at the top end of the market, the premium end of the market, driven by innovation. So if you look at the mix of our product, it’s really been extraordinarily strong at the premium end.

And it’s really, as Trevor said, the value of putting the brand, the product, and then compelling retail distribution in place, which lets you shift the market to premium and maximize price..

The next question comes from Michael Binetti with UBS..

You’ve told us the story about Western Europe a bit and made the analogy to the category offense strategy that you put in in the U.S., and I think you’ve injected a lot of those disciplines so far over there.

But can we maybe talk a little bit about some of the similarities you’re been able to capture, and maybe some of the differences as you are now, I would say, in the middle innings of rolling that out in Europe? And maybe as we think longer term about Western Europe, it’s growing very well, but you’ve seen higher margins there in the past.

That obviously looks like an opportunity.

Is there an opportunity there to push above prior peaks with the category offense, like you did in the U.S.? Or do you think that for now that market still needs some investment to get to what you think the potential is?.

Around Western Europe, and speaking about the similarities, the first thing I’d say, for example, what we did see earlier, we saw certainly a very rapid growth of our running business in North America. And we saw that we were able to really grow the running market in a substantial way. We saw that Western Europe was trailing in that respect.

We’re now seeing that actually take place in Western Europe. So as an example, we’re seeing a lot of the ideas and a lot of the things that were done in North America really play the same way in Western Europe. Having said that, we do execute sometimes slightly differently in some of those marketplaces.

So recognizing where the consumer is different or they might approach it from a different perspective, we do make sure that we have tailored product offerings that will meet that specific consumer’s need in that marketplace. The other part is just a matter of, we’re still in early days.

And so when you think about, we’ve got running rolled out, we’ve obviously got an incredible focus on footwear, we’re amplifying our business in terms of how we think about our category business. And then when you drill it down and you go into our markets within Western Europe, you can only see more growth opportunities.

So we’re seeing great growth come out of Germany. We’re seeing great growth come out of the U.K. So it’s really a matter of, we think about that as a portfolio in and of itself. And that’s what we believe helps us to continue to see even further growth. But we see tremendous potential in this marketplace, and we’re only just scratching the surface..

We have a lot of confidence around our ability to leverage and scale best practices around the world, but then also, at the other end, to tailor our product and marketing as needed, even down to the city level. So it’s that combination, I think, that is really a part of Nike’s strength and our potential..

If I could ask you one follow up. You guys have really obviously been focused on pricing, and we see the numbers go by with your new disclosure, how much that’s adding to the gross margins quarter to quarter.

Could you talk about the pricing strategy a little bit there? And what I find to be counterintuitive is how you guys are getting such a nice benefit from pricing while a lot of other categories in the U.S. in particular are seeing pricing pressure.

How do you think about policing that to make sure you’re protecting from overheating down the road, as you think about your higher level pricing strategy?.

A couple of things there. I think one of the things that we, I think, did a number of years ago is we really embedded pricing into the way that we do the business every single day. So we’re working on pricing at a style by style level and a market by market level, and making sure that ultimately we deliver the value to the consumer.

At the same time, we do believe the power of our brand, and our ability to bring more innovation to the market, is really helping to drive a premium position. And we’ve seen it really in every market around the world where the consumer is definitely trending towards premium products.

Well made with great innovation is certainly resonating with the consumers..

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And I’d add one other thing too. In our organization, the people who are really on the front lines from a pricing and a consumer value standpoint are the merchants. So this is a set of decisions that the people who are at the marketplace are really driving that strategy..

The next question comes from Eric Tracy with Janney Capital Markets..

Mark, if I could follow up on the commentary on the manufacturing revolution. Completely agree with it being potentially game changing. And I think this was kind of the first time we had heard the potential that that could be sooner rather than kind of a long term opportunity.

Could you just speak to, again, specifically beyond Flyknit, is it 3D printing, is it other disruptive technologies that are in play? Again, the timing of when you might be able to scale that and what that level of penetration might look like?.

Yeah, I’m not going to go into great detail here and now, but I will say that these breakthroughs really come in the shorter term, the midterm, and the long term.

You know, we’ve got a steady flow of innovations beyond Flyknit to speed up our manufacturing, to make the whole process of manufacturing more efficient, more sustainable, and offset some of those higher input costs. Specifically, 3D printing, that has a tremendous opportunity for us. That’s a bit on the longer road side of things.

But we intend to be on the forefront of that potential. And there’s other things that I don’t want to get into at this point, that will start to make a more meaningful impact over the next one to three years..

And then maybe if I could switch gears, as we think about heading into the Brazil Olympics, clearly a little bit of a macro downtick there as well as just some of the distribution issues across the Latin America region. How do we think about managing the emerging market business into that.

Do you double down from an investment in sort of demand creation standpoint? Do you manage back on that? Again, it’s much bigger in terms of showcasing the Nike brand on a global level, but anything kind of region specific we should think about into that event?.

I’d say first that the brand is very strong in Brazil. It’s very strong in Latin America. And in fact, the World Cup obviously was a great example of, it was a tremendous success for us. I think what you’re seeing around Latin America right now is certainly some macroeconomic headwinds that we’re working through.

And what we’re essentially trying to do is make sure that we’re taking prudent steps to proactively manage the flow of product into the marketplace. To make sure that the market can actually remain healthy for both us as well as for our retail partners. And that’s really what we’re doing. So it’s more about making sure that we balance it.

For the long term, we are tremendously enthusiastic about the opportunity that lies in the Brazilian market and in Latin America. Very high sports markets. Consumers have a very good passion for the brand and certainly passion for sport. So we really are very bullish about that market long term..

Operator, we have time for one more question..

The next question comes from David Weiner with Deutsche Bank..

I wanted to ask about the North American running business. I think you gave some color on some of the footwear and apparel SKUs, products that did well. But I was wondering if you could dig a little bit deeper into the consumer and kind of what are they looking for in product, and if that’s changing at all as we go into the holidays.

And then also, I’m not sure if you gave a performance number for how North American run did, but if you could, that would be great..

Around running, obviously running is our heritage, and it’s obviously our largest performance category. And we continue to see great growth in our running business. In fact, the running business grew double digits this year on top of double digits last year. So it certainly is still driving.

What we’re seeing in the category of running, certainly around runners, we’re obviously seeing the women’s business grow at a great clip. So we’re seeing strong growth among the women’s business, but also amongst the premium business. So that consumer continues to want more dimension, I would say.

And also, we’re seeing great things like focus on technology and certainly the focus on color. And all those things are starting to drive that marketplace. The other part to the running business is also the apparel. We’re seeing a great growth around premium apparel in running.

Now, the one area that, again, we continue to see opportunity for is strengthening our product line, certainly around the lower price points. And this is what Mark always speaks about, the complete offense. And this is the opportunity where we can really focus in more around our core business and really make sure that we strengthen that.

But all in all, the running business is still strong. And we obviously can see the pipeline that’s going to be coming, so we feel very confident about the continuation of driving the running business in North America..

And unfortunately, we do not give category level information for our geographies..

Kelley Hall:.

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