Nike had strong momentum pre COVID-19 Nike Q3 sales to the end of February were up 5%, or 7% at constant FX, driven by 13% constant FX growth in NIKE Direct (digital up 36%) which was offset by the impact of COVID-19 in Greater China. Europe, Middle East and Asia sales +13%, with US +4%. Profit exceeded guidance due to cost flexibility. Learning from China and Asia experience Nike began opening Chinese stores c.30 days ago, with c.80% now open. It has opened its first store in the Wuhan area. In China, it is seeing a double-digit increase in retail traffic week on week, with some stores back to prior year levels. In China, weekly active users of the NIKE activity app were up 80% by the end of Q3 versus the beginning of the quarter. Data from China, Japan and Korea is consistent with 4 main phases: (1) Containment lasted 4 to 6 weeks. Stores were closed, but online in all markets remained strong; (2) Recovery – all 3 markets are through that phase now with consumers coming back on the street. Digital actually accelerated when stores opened; (3) Normalisation is where they are now; and 4) Growth. Nike is using its Chinese experience to engage with European and US customers digitally. As it says “while the organized world of sport is on hold, the global culture of health and wellness continues unabated”. It still has great products to launch, some of which may be launched just online. The company did that in China and demand was good. Working with partners to get up and running quickly Nike is working at realigning its supply chain operationally and adjusting its launch pipeline. It was fortunate to have good rates of sale through going into the crisis so inventory is healthy. It is working closely with strategic partners such as Foot Locker, DICK’S, JD and Zalando, across the US and Europe so they can come back stronger. To quote “we’re working with our partners in the US in a similar regard managing the inventory they have on hand, the inventory we have on hand relative to them, and how best to flow that through their digital pipes as well as ours”. We expect a managed start up from the brands post COVID-19 and would not expect Nike nor Adidas to flood the market. JD is well positioned, helped by a market-leading, multi-channel proposition in many of its markets. We believe the athleisure market will rebound relatively quickly and JD’s customer base should be less financially impacted as parents are likely to have carried the financial burden. JD forecasts are pre-COVID-19 and will be reviewed when there is more visibility.