FOURTH QUARTER & FISCAL YEAR 2025 Investor Presentation Safe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995 This presentation and related statements by management contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent management's expectations or beliefs concerning future events, including, without limitation, expected results for the first quarter and full-year Fiscal 2026. Words such as "outlook," " ...

Core Viewpoint - Nike's shares are declining following a mixed earnings report, with strong sales growth in North America overshadowed by a significant decline in China, one of its key markets [1][2]. Group 1: Earnings Performance - Nike reported a 9% sales growth in North America, beating expectations on both revenue and earnings [1]. - In contrast, sales in China fell by 17%, which was significantly worse than analysts had anticipated [2]. Group 2: Market Challenges - CEO Elliot Hill indicated that the recovery in China will take longer than in other regions, citing a shift in consumer preferences towards lifestyle products rather than performance footwear [2][3]. - The Chinese market is characterized as a mono brand marketplace, where consumers prefer to shop directly from Nike stores or its website rather than department stores [3]. Group 3: Strategic Adjustments - Nike is focusing on improving its retail fundamentals and has increased investments in key cities like Shanghai and Beijing [4]. - The company is also working on clearing out stale inventory to introduce fresher, premium products, which may negatively impact margins in the short term [5]. Group 4: Margin Pressures - Nike's direct-to-consumer strategy aimed at increasing margins has not yielded the expected results, leading to a reversal of this approach [6]. - The company raised prices between $2 and $10 starting in June to mitigate margin pressures, but current quarter margins are projected to decline by 175 to 225 basis points, following a 300 basis point drop in the previous quarter [6][7].

Core Insights - Lululemon is in search of a new CEO following the announcement of Calvin McDonald's departure at the end of January, with investor Elliott Investment Management proposing Jane Nielsen as a candidate [1][4][7] Group 1: CEO Search and Candidate Proposal - Elliott Investment Management, which holds a stake of over $1 billion in Lululemon, has suggested Jane Nielsen, a former CFO at Ralph Lauren, as a potential CEO [2][3] - Nielsen's previous experience includes successful turnarounds at Ralph Lauren and Coach, and she is currently a board member at Mondelz International [4][7] - The market reacted positively to the news, with Lululemon shares rising more than 4%, although they remain down over 40% for the year [4] Group 2: Company Performance and Strategy - Lululemon has experienced a slowdown in U.S. sales as it expands its product offerings beyond its traditional yoga-focused items to include golf, tennis gear, and men's apparel [6] - The company aims to revitalize its American business by introducing new products in the spring and enhancing its design and production processes [6]