decisions by Charlie Denson and Gary DeStefano to retire from their roles with NIKE. They were instrumental in growing NIKE around the world. Perhaps their most important legacy is the deep bench of enterprise leaders they helped develop, who now help lead the company.

I won’t go through all the names here, but many of them are people you already know. Even more important, they know NIKE and they know each other. They bring tremendous passion, energy and chemistry to our future. Some people will be providing leverage and continuity from their existing positions, while others will be assuming new roles.

These changes reflect our successes and our biggest growth opportunities. They represent five very specific – and ongoing – commitments:

Accelerate our innovation agenda

Elevate design

Optimize our category and go-to-market strategies

Integrate product creation and merchandising from design all the way through to retail

Sharpen our focus on supply chain and manufacturing improvements

We spend a lot of time developing our leadership talent. That’s something that never stops. It allows us to adapt and evolve our competitive offense, and that’s what you can expect as this team takes NIKE into the future.

Thanks,

Mark Parker

President and Chief Executive Officer

NIKE, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 

NIKE designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide. We are the largest seller of athletic footwear and apparel in the world. We sell our products to retail accounts, through NIKE-owned retail stores and internet websites, which we refer to as our “Direct to Consumer” operations, and through a mix of independent distributors, licensees and sales representatives in virtually all countries around the world. Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment, accessories and service businesses. Our strategy is to achieve long-term revenue growth by creating innovative, “must have” products, building deep personal consumer connections with our brands, and delivering compelling consumer experiences at retail and online. 

In addition to achieving long-term, sustainable revenue growth, we continue to strive to deliver shareholder value by driving operational excellence in several key areas: 

Expanding gross margin by: 

–  Making our supply chain a competitive advantage; 

–  Reducing product costs through a continued focus on manufacturing efficiency, product design and innovation; and 

–  Delivering innovative, premium products that command higher prices while maintaining a strong consumer price-to-value proposition. 

Improving selling and administrative expense productivity by focusing on investments that drive economic returns in the form of incremental revenue and gross profit, and leveraging existing infrastructure across our portfolio of businesses to eliminate duplicative costs; 

Improving working capital efficiency; and 

Deploying capital effectively. 

Through execution of this strategy, our long-term financial goals continue to