How much of this, Poonam, is, um, stuff that Elliot Hill inherited versus things that he did not fix, um, once he inherited?

inherited?I think it's a combination of both.

So Nike started to slow down before Elliot Hill- Hill had come into the equation.

That said, since he's come on board, what he has fixed is North America and performance, so we do give him credit for that.

That though, there's so much more to fix.

Sportswear, roughly 50% of Nike's business, is still down.

Jordan is down, and China is plunging as we speak.

Where are we on that? Is- is there any expectation for any changes at the top here? Because one could argue that this is an execution issue.

And in Europe, you know, where I sit most of the time, adidas and nike they've seen this kind of cycle also of trying to grab the consumer having the zeitgeist what does it take i mean i was looking at the tennis this week it was all about you know have the right shoe the right fashion is actually at leisure high fashion now

So there's a few things that you have to look at.

One, yes, absolutely, you have to get the right performance.

So when you think about yoga wear and you think about performance wear, there's two ways to look at it.

When you're looking at it for women specifically, it's about performance, it's about fit, and it's about style.

All three of them need to come together.

And they did for Lululemon several years ago.

mold aren't they um and sort of high fashion very bright colors anyway what about the global business what about China for Lululemon I mean China is surely massively important for so many US businesses it's been tough there

Putin, in the longer term, how have we seen the tariff picture and a lot of the, I don't want to call it a trade war, but the butting of heads between President Trump and the Chinese administration on tariffs? And has that affected either of these retailers? I know Walmart used to get a significant amount of its stock from China.

Yeah, so when you look at Walmart specifically, more than half of Walmart's business is grocery.

So much of that stuff is less impacted from what comes from China.

But when you look at the discretionary side of the business, apparel, home, toys, et cetera, there is an impact.

And yes, tariffs have raised costs for retailers like Walmart and Target and even others across the US because most of what we consume is brought in from abroad, especially on the discretionary side.

Now, that said, I think the tariff situation was worse off last year when we were talking about 100 plus percent tariffs from China.

From that standpoint, we've come down a lot.

So have these trend toward online slowed down at all, or how have any of those trends been changing?

Is part of what's happening here maybe that demand for kind of middle of the road brands is softening while maybe demand for higher end brands is gaining ground or is it something else entirely?

Yeah, I think it's a mix of a few things.

So first, I do think that it has to do with the higher end customer is doing better than the mid or the lower end.

So we do see that across the spectrum.

That said, Under Armour, while it is middle of the class, you know, it's not Nike or Adidas.

But it is still a strong brand when you think of athleisure, especially compared to like some of the other brands that are up and coming.

I think Under Armour does still in North America have across the board, not just in metro cities, a name.

What do we know about what happened there and how... how Under Armour is thinking about maybe replacing or finding another celebrity endorser or celebrity partner to work with it?

Poonam Goyal covers Amazon for Bloomberg Intelligence.

It looks like broad-based strength across the board.

The retail numbers were particularly good, and that was expected because we had the Prime Day shift moving in from 3Q to 2Q.

So overall, uh, really nice numbers here on the retail side.

Consumers came to Amazon to shop Prime Day sales, and the shift to online just continues to appear more and more apparent as we move through a tough consumer spending cycle.

Poonam Goyal covers Amazon for Bloomberg Intelligence.

It looks like broad-based strength across the board.

The retail numbers were particularly good, and that was expected because we had the Prime Day shift moving in from 3Q to 2Q.

So overall, uh, really nice numbers here on the retail side.

Consumers came to Amazon to shop Prime Day sales, and the shift to online just continues to appear more and more apparent as we move through a tough consumer spending cycle.

How do they think about increasingly using AI to kind of juice the numbers and maybe improve the profitability on the retail side of things?

Yeah, AI has been a big push on the retail side.

And actually, I think Amazon does it best, better than anyone.

When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever.

You go to the search bar, you can compare pricing.

You can say, I'm looking for this item, and when was it priced cheapest? And if it drops to that price, buy it for me.

I mean, just that simple, and it'll show up at your door.

But it doesn't move the needle on the financials, right, for Amazon at this stage?

How do they think about increasingly using AI to kinda juice the numbers and maybe improve the profitability on the retail side of things?

Yeah, AI has been a big push on the retail side, and actually, I think Amazon does it best, better than anyone.

When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever.

You know, you go to the search bar, you can compare pricing.

You can say, "I'm looking for this item, and when was it priced cheapest? And if it drops to that price, buy it for me." I mean, just that simple, and it'll show up at your door.

So I do think that they're gaining traction there.

In fact, in the release, I believe they said that interactions and active users w- doubled, um, over second quarter just with AI adoption and Alexa for shopping.

I find that amazing, but it doesn't move the needle on the financials, right, for, for Amazon at this stage?

How do they think about increasingly using AI to kind of juice the numbers and maybe improve the profitability on the retail side of things?

Yeah, AI has been a big push on the retail side.

And actually, I think Amazon does it best, better than anyone.

When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever.

You go to the search bar, you can compare pricing.

You can say, I'm looking for this item, and when was it priced cheapest? And if it drops to that price, buy it for me.

I mean, just that simple, and it'll show up at your door.

if they involve the ai in the transaction i find that amazing but it doesn't move the needle on the financials right for amazon at this stage

How do they think about increasingly using AI to kinda juice the numbers and maybe improve the profitability on the retail side of things?

Yeah.

AI has been a big push on the retail side.

And actually, I think Amazon does it best, better than anyone.

When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever.

You know, you go to the search bar, you can compare pricing.

You can say, "I'm looking for this item, and when was it priced cheapest? And if it drops to that price, buy it for me." I mean, just that simple, and it'll show up at your door.

I find that amazing, but it doesn't move the needle on the financials, right, for, for Amazon at this stage?

How do they think about increasingly using AI to kinda juice the numbers and maybe improve the profitability on the retail side of things?

Yeah.

AI has been a big push on the retail side, and actually, I think Amazon does it best, better than anyone.

When they introduced Alexa for shopping, for example, Alexa Plus, it's pretty clever.

You know, you go to the search bar, you can compare pricing.

You can say, "I'm looking for this item, and when was it priced cheapest? And if it drops to that price, buy it for me." I mean, just that simple, and it'll show up at your door.

So I do think that they're gaining traction there.

I find that amazing, but it doesn't move the needle on the financials, right, for, for Amazon at this stage?

Poonam, just kind of scope out for us for the... name brands that were really associated with this nike and adidas talk to us what it means for them

yeah so for both of them the world cup is a real big deal because it allows them to come front and center with their fans and consumers alike so when you think about who has the ball who has the kits who has the teams and matters so when we got to the finals adidas had the win already right because both teams were sponsored or wearing adidas gear So at the end of it, who won the World Cup? It's Adidas of the athleisure names, and that's great brand heat for them.

In fact, they came out saying that they had expected in euros a billion from the World Cup kit sales and jerseys, etc.

And they topped that by 50 percent.

So 1.5 billion euros is what now the number is for the momentum they got from the World Cup on just kits and jerseys and gear ahead of it.

Talk to us about Puma.

Yeah, so Puma, you know, they're definitely much smaller, right, when you think about them in the world of sports.

And I think they didn't have as many teams as Nike and Adidas have, so they do lag in that front.

Talk to us about what you learned from their earnings in a conference call.

So there were a few things, you know, the turnaround is still very much underway and it's not a full recovery yet or anywhere close to it as if they cut their forecast or I guess that sales are going to deteriorate further in the first half of their fiscal year down by low to mid single digits in the first quarter and then down further in the second fiscal quarter.

So that was a clear negative, but it was due to tougher comparisons from a year ago when they reentered wholesale in a more meaningful way and had higher digital promotions in EMEA.

That said, on the quarter, and to answer the first part of your question, Paul, China was better than expected, but still down 17%.

So what I would say is, you know, still a lot of work to be done in China, and it's not going to be an overnight fix.

It will take 12 to 18 months.

Is there anything that Nike can do or Elliot Hill can do to kind of change the narrative more dramatically?

I think there's a lot of things that need to be done.

Here is Bloomberg analyst Poonam Goyal.

Competition is increasing.

There are definitely more players in the market, and no one is willing to leave their share behind for Nike to easily pick it up.

So innovation is going to be key here.

Nike needs to s- continue to innovate, but even at a faster clip to keep up or beat competition because the mind share is now split.

between the newer emerging brands like On and others

and says CEO Elliott Hill's turnaround plan is front and center.

We want to hear what the look ahead is.

What is the fiscal 2027 look for Nike the first quarter? And then on tariffs, tariff refunds are coming in, and Nike has alluded to a benefit that it will expect in the back half of the calendar year.

So how much of a benefit will that

The

focus is really going to be all on guidance.

We're not expecting anything momentous.

The turnaround is underway, especially in North America.

So expecting positive sales there, low single-digit increase, though the rest of the world is going to be down, notably China, down in the high teens.

So a lot of work still needs to be done.

Poonam Goyal

What is the issue for Nike in China? What's going on over there?

So there's a lot happening in China that they need to fix.

The first thing that they need to fix is the inventory.

There's too much inventory on the floor in China.

They need to do exactly what they did in the U.S., which is clear that inventory, get it out of the market, and then bring in more new inventory that resonates with the consumer.

That's seem to be more what the consumer wants.

How they do that in the US when they did that, they did it more through their direct-to-consumer channels, which is probably the right approach.

know?

She says CEO Elliott Hill's turnaround plan is

front and center.

The focus is really going to be all on guidance.

We're not expecting anything momentous.

The turnaround is underway, especially in North America.

So expecting positive sales there, low single-digit increase, though the rest of the world is going to be down, notably China, down in the high teens.

So a lot of work still needs to be

She says CEO Elliot Hill's turnaround plan is front and center.

The focus is really going to be all on guidance.

We're not expecting anything momentous.

The turnaround is underway, especially in North America.

So expecting positive sales there, low single digit increase, though the rest of the world is going to be down, notably China down in the high teens.

So a lot of work still needs to be done.

How will AI fix that problem?

So there's a lot of things that are happening in the industry when it comes to how to solve the return problem.

We don't think it's ever going to be entirely solved, but definitely, you know, you would want to see lower return rates.

For online, the return rates are doubled out of stores.

And what we see right now happening is, you know, when you go onto a retailer's website, they have recommended sizes.

So they can tell you, based on your purchasing patterns, here's what we recommend.

There's also AI design patterns.

So is this going to increase the top line for some of these retailers, do you think? Or is it just going to change the way people shop and maybe it'll have an impact on their margins? How do you think about it from a P&L perspective?

But do people who shop Prime Day, are they all Prime members? Or is there a significant number that actually has not signed on to the program yet and will do so because of these offers?

No dumb question.

But the answer is Prime Day is for Prime members.

So to take advantage of the deals, you have to be a Prime member.

So Amazon does have over 200 million Prime members around the world that will be taking advantage of these deals.

But it is also a time where many people sign up for deals that don't have the membership.

Some of them sign up to take advantage of the deals and cancel, and many of them do stay on.

AI, Poonam, how are people using AI for shopping? How are retailers using AI?

How do you fix that kind of thing? Is it just hiring the right person or is it changing your process? How do you do that?

Right.

So I think there's two ways to think about it.

When a company like Lululemon or even a Nike, they have such great brand equity and heat that they can use that to their advantage.

What they need is a product led person.

They need innovation and product.

So they need the execution on the product side.

Is there a path forward for them to work together?

What's the Nike story right now, Poonam?

Yeah, so Nike is basically going under a turnaround.

There's a lot of things that they need to fix, but there are things that they have fixed.

So let's start with the biggest piece of the business, which is North America.

In North America, since Elliott Hill has taken helm, they have made improvements.

In fact, sales have turned positive there, and that's a sign that the initiatives put in place, getting the right product back in, working on speed, clearing out old product, reducing inventory, It's all paying off, and we expect that to continue.

The challenge, however, has been China.

I'm seeing brands of sneakers around here that I haven't seen before.

A, what did you see in the results? And B, what's the latest on their CEO search?

So the latest on their CEO search is that it's still undergoing and we don't know where they are.

As far as the results are concerned, they posted respectable 4Q numbers last night.

A 1% increase in revenue was better than the 1% roughly decline that we expected.

So a little better.

The concern was really the guidance.

The outlook for the next quarter, which is 1Q and the full year, was still very light.

What kind of influence does this have on the existing board and on investors' expectations?

What's your initial thought here from the retailer's perspective to the extent that a lot of these tariffs are going to be rolled back?

Yeah, I think it's good news for retail because at the end of the day, their costs will go down.

These tariffs caused unnecessary stress in the supply chains, caused retailers to raise prices.

It lowered their margins.

So all that is now set to reverse.

We still don't know what the magnitude of this will eventually shape out to be.

Our analysts here on the government side think that while these have been overturned, you don't know what else could be added.

So from your perspective and the perspective of the retailers, Poonam, how much did you think like the Nikes of the world kind of took in their margin? versus passing along to consumers?