NA APPAREL MERCHANDISING F/H’12 GEO INPUT: FLEECE, OUTERWEAR & NIKE PRO 1/27/11.

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Presentation transcript:

NA APPAREL MERCHANDISING F/H’12 GEO INPUT: FLEECE, OUTERWEAR & NIKE PRO 1/27/11

% = inc./dec. from PY 30 % 30.3% 105 % 11.7% 117% 10 % 43 % FLEECE - USA FA/HO11 * REVENUE IN MILLIONS VS LY 114 % Source: NA Demand Plan

FLEECE - USA FA/HO11 * Breakdown by Category Source: NA Demand Plan

FLEECE-NA SWOT STRENGTHSWEAKNESSES THREATSOPPORTUNITIES Total Fleece market is $1.5B; -2.7% to LY Nike and Adidas tied for 2 nd place in market share after Private Label at 7%, and lost market share (LY Nike was 8% and Adi 8.2%) All top brands lost AUR as compared to LY The less than $55 price point segment was the only one that gained market share Columbia at 3.9% market share grew (was 2.3% LY) UA at 3% market share also grew (was 1.4% LY) Internal margin on core basic styles does not allow for fully profitable realization of the “badge and borrow” strategy Market Share info from NPD (Jul 2010-Nov 2010) M/W Performance Fleece (KO Franchise across categories): offer more novelty and color blocking in varied silhouettes – this segment is growing faster than cotton fleece. MAT could land another 6-8 styles for Fall 12, as example. UA is offering a broader assortment/color spectrum in Men’s and Women’s Performance Fleece than Nike currently is…opportunity to stop UA’s growth in this segment Spring opportunity in lighter weight (newness vs FA/HO) core and novelty fleece. Early indicators of Fall 11 AD pricing strategy (pull back margin from retailer) is strong – revenue will be flat while growing margin $ Price/Value of Fall/Hol 11 NSW Embellished fleece was strong Performance fleece overall drove classification growth for Fall 11 bookings (MAT / WT more than doubled their Fall 10 bookings; Sportswear is flat)

Gap $ % Cotton, 11% Polyester Champion $ gram 80% Cotton, 20% Polyester Double Dry wicking technology American Apparel $49 70% Cotton, 30% Polyester Metal zipper Nike 6.0 $ gram 80% Cotton, 20% Polyester The North Face Hoody $50 Cotton/Polyester Adidas $ % Cotton, 30% Polyester Russell $ gram 50% Polyester, 50% Cotton Dri-Power® quick-drying NA Fleece Hoody Pricing Nike Classic Hoody $ gram 80% Cotton, 20% Polyester

Champion $ gram 82% cotton/18% polyester American Apparel $38 50% Cotton, 50% Polyester The North Face $50 80% cotton/20% polyester Russell $ gram 50% Polyester, 50% Cotton Dri-Power® quick-drying NA Fleece Bottoms Pricing Adidas$35 70% Cotton, 30% Polyester Nike Classic Pant $ gram 80% Cotton, 20% Polyester Puma $45 80% cotton/20% polyester

Nike Pro – USA FA/HO11 * REVENUE IN MILLIONS VS LY +57 %-45% 75% 70% % = inc./dec. from PY 26% * Exclusive of NTS product that includes Pro and College Football & Baseball. 79% 72%

Nike Pro – USA FA/HO11 Breakdown by Category * Exclusive of NTS product that includes Pro and College Football & Baseball.

NIKE PRO COMBAT-NA SWOT STRENGTHS WEAKNESSES THREATSOPPORTUNITIES We have become the fitted provider within the market recognizing the trend from compression early Hypercool has proven that we can sell higher price points given adequate technology Hyperstrong has provided the sharp point for all of NPC, driving innovation primarily through football The switch from Nike Pro to Nike Pro Combat has created equity within this silo Men’s Rolling 12 Month Market Share ($) - Nike: 26.3%, +8.9 points to LY (all-time high) / UA: 59.5%, -7.1 points to LY (all-time low) W’s Rolling 12 Month Market Share ($) - Nike: 31.8%, +8.3 points to LY / UA: 36.5%, -6.7 points to LY Female Consumer validation: Positive market share gains year round including cold weather months (took over as #1 baselayer brand Nov 10) Creation of the Last Mile program UA continues to dominate cold weather with mocks and tights; they own the consumer during this time period NPC uses the same design for both fitted and compression making it an either or and not an incremental for retailers Capacity issues: we are having a hard time satisfying demand Low margins, especially on fitted and when product is sourced in Asia due to over capacity in Latin America Product benefits: we do a poor job of communicating to the consumer why they need NPC both in-store and on hang-tags Lack of newness and style innovation in women’s AUR: Nike continues to be a discounted brand, AUR well below UA Continue to lead in innovation; UA does not have the capability at this point Tell the consumer why our product is better through in-store communication Focus on youth: UA dominates in kids; higher price to convert them in high school than capturing them early All out Cold Weather attack: we need to make significant strides here to ever knock out UA Increase number of styles / colors on AA and demand pull to help delivery Inclusion of women’s business into last mile program Opportunity to grow business by layering up better/best Pro offerings Raw material increases and low margin styles: we cannot afford to out-price UA given our current market share UA is retrenching based on our gains: expect better product and in-store coming soon SP12 updates and price increases on Women’s Pro core silo

Key Styles TARGETED PRODUCT FOCUS AT UA’S FOUNDATION FA/HO’10SP/SU’11 Competitive Attack Tech Tee ($20) Flex Short ($25) Comp S/S Top ($25) 6” Comp Short ($25) Tech Tee ($20) Legend Tee ($20) Fitted S/S Top ($25) Epic / Fly / Mesh ($25/$30) Fitted S/S Top ($25) Base Layer Market Share 60.1%,-7.7 pts to LY (Rolling 12-Mo) Training Market Share 49.8%, -0.2 pts to LY (Rolling 12-Mo) Base Layer Market Share 60.1%,-7.7 pts to LY (Rolling 12-Mo) Training Market Share 49.8%, -0.2 pts to LY (Rolling 12-Mo) Legend Tee 205K Units Sold (3-Mo End Oct ’10) Legend Tee 205K Units Sold (3-Mo End Oct ’10) Training Shorts 201K Units Sold (3-Mo End Oct ’10) Training Shorts 201K Units Sold (3-Mo End Oct ’10) Nike Pro Combat Sales $12.9M, +29% to LY (3-Mo End Oct ’10) Nike Pro Combat Sales $12.9M, +29% to LY (3-Mo End Oct ’10) Shorts $38.1M Booked SP/SU11 +53% to LY Shorts $38.1M Booked SP/SU11 +53% to LY Base Layer Market Share 25.7%, +9.3 pts to LY (Rolling 12-Mo) Training Market Share 21.1%, +3.8 pts to LY (Rolling 12-Mo) Base Layer Market Share 25.7%, +9.3 pts to LY (Rolling 12-Mo) Training Market Share 21.1%, +3.8 pts to LY (Rolling 12-Mo) Tech Tee 192K Units Sold (3-Mo End Oct ’10) Tech Tee 192K Units Sold (3-Mo End Oct ’10) Training Shorts 162K Units Sold (3-Mo End Oct ’10) Training Shorts 162K Units Sold (3-Mo End Oct ’10) UA Base Layer Sales $26.6M, -27% to LY (3-Mo End Oct ’10) UA Base Layer Sales $26.6M, -27% to LY (3-Mo End Oct ’10) Nike Pro Combat $39M Booked SP/SU11 +48% to LY Nike Pro Combat $39M Booked SP/SU11 +48% to LY Updated Tech Tee Coming SP’11 Updated Tech Tee Coming SP’11 Legend Tee $14.2M Booked SP/SU11 +58% to LY Legend Tee $14.2M Booked SP/SU11 +58% to LY ColdGear Mock ($50)ColdGear Tight ($50) Comp S/S Top ($25)Flex Short ($25) HyperWarm Mock ($50) HyperWarm Mock 18K Units Sold (3-Mo End Oct ’10) HyperWarm Mock 18K Units Sold (3-Mo End Oct ’10) HyperWarm Tight ($50) HyperWarm Tight 6K Units Sold, -13% to LY (3-Mo End Oct ’10) HyperWarm Tight 6K Units Sold, -13% to LY (3-Mo End Oct ’10) 6” Comp Short ($25) Updated Compression Baselayer Coming SP’11 Updated Compression Baselayer Coming SP’11 6” Comp Short ($25) #1 Cold Gear Mock 89K Units Sold, -50% to LY (3-Mo End Oct ’10) Cold Gear Mock 89K Units Sold, -50% to LY (3-Mo End Oct ’10) Cold Gear Tight 30K Units Sold, -27% to LY (3-Mo End Oct ’10) Cold Gear Tight 30K Units Sold, -27% to LY (3-Mo End Oct ’10) MEN’S

% = inc./dec. from PY Outerwear – USA FA/HO11 * REVENUE IN MILLIONS VS LY Note: Canada Outerwear business is estimated at $3.5 mil down from $6 mil PY. 97 % 25 % 48%67 % 119% -35 %-38 %new