Performance Conclusion This quarter's results met management expectations. The "Win Now" initiative drove improvements in North America and the Running business, while EMEA and Greater China continued to drag on overall performance.

Key Data Running business achieved double-digit growth; North America February sell-through turned positive for the first time across all channels; Q4 revenue guidance calls for a low single-digit decline.

Business Progress The "Win Now" initiative is delivering results in North America: wholesale returned to growth, DTC discounting improved, and Air Force 1 and AJ 1 inventory stabilized. In EMEA, 25-year veteran Cesar Garcia has taken the helm, focusing on Running, Training, and Football, but Sportswear sell-in fell short of expectations, requiring continued inventory clearance. In Greater China, the company proactively reduced sell-in to shift toward full-price sales. On the product front, Spring 2027 will be the first to benefit from the restructured Sport Offense division; innovations such as MIND and AeroFit are in the pipeline.

Guidance & Outlook The company provided guidance for the nine months ending calendar year-end: revenue to decline low single digits, with modest growth in North America and continued pressure in Greater China. Gross margin is expected to inflect in Q2, with EPS improvement following; severance costs ($230 million) will impact this quarter on a one-time basis but pave the way for long-term cost structure optimization.

Risk/Positive Signals Positive signals: Management repeatedly emphasized that the "Win Now" initiative is "on the right track," and the North American trend is sustainable. Negative signals: Recovery in EMEA and Sportswear is slower than expected; management acknowledged that "the comeback takes longer than I’d like," and external macro pressures (Middle East traffic disruptions, promotional environment) exacerbate challenges.