Charlie Denson: It is something we have gotten a lot better at over the last 3 or 4 years, just our connectivity with most of our major retailers and having a much higher level of transparency into the inventory of that retail. We watch it close and even closer today than we have ever watched it because of the level of uncertainty I think that everybody has in the U.S. market. I feel good about where we are at. We continue to take share and our sell throughs are strong and we are gaining ground on everybody. We are not going to take the pedal off and we are going to keep the pressure on. We have got some great product coming down the pike. I think that some of the performance product that we are coming out with this summer around Beijing and the European Championships is the greatest performance product offering this company may have ever had.

Robert Samuels (JP Morgan): Could you talk about the trends you are currently seeing in your full price stores as well as the outlet stores?

Mark Parker: Our in line stores are reflective actually. Those are reflective of the general market. On the in line stuff we are outperforming some of the trends that you see. That is based on a lot of what we are doing with respect to some of the consumer experiences that we talked about. The NIKE Town Running experience has been popular and successful. NIKE ID launched in NIKE Town New York and NIKE Town London and we have seen great response to that as well. We have increased service levels and again as we continue to build out our own retail plan it is more than just about a format. It is about that entire consumer experience. Some of the things that we are continuing to explore and learn are already paying dividends in the market place.

Charlie Denson: Both in line and factory outlet store comps in the U.S. were up 3% for the quarter so we are up on both concepts.

John Shanley (Susquehanna Financial Group): You mentioned that you are building more outlet stores. Is that helping to stabilize the NIKE product versus some of the competitors out there which seem to be promoted more heavily than the NIKE brand is currently being?

Charlie Denson: It certainly puts us in a much better position to manage that. We feel good about the strategy of expanding our outlet footprint over the last 18 months. It is something we talked about a year or year-and-a-half ago and the timing now is going to be even maybe better than expected. Our sell throughs throughout both in line and factory outlet stores continue to be strong. Some of that is based on again being the go-to brand in times of uncertainty and part of it is attributed to just the product assortments we have in the market place.

John Shanley (Susquehanna Financial Group): Could you comment on the promotional environment that is going on in the U.S.?

Charlie Denson: With respect to the promotional activity us versus the rest of the market place we are going to stay above the fray.

John Shanley (Susquehanna Financial Group): Where are you in terms of the number of stores specifically in the U.S. that you currently operate both outlet as well as in line regular stores?

Pam Catlett: Total NIKE Brand stores are not U.S. specific and we will have to break that down separately. 331 is the total number of stores. We did not add any net new factory stores in the quarter. We have added 14 factory stores in total since the end of last fiscal year.

Brian McGoth (Morgan Stanley): Can you keep your gross margins heading higher without having to flex on your balance sheet as you head into the next year or two?

Don Blair: It is always tempting in a difficult financial environment to use the balance sheet and let the receivables string out and let your payables head out. What we would prefer to do is make sure that our factory partners maintain profitability and our accounts maintain profitability the old fashioned way of running a tight supply chain and running product that sells through a slow margin. One of the things that we have resisted even at a time when money was cheap was letting the balance sheet grow. We are going to stay focused on keeping the supply chain tight, the inventories tight and making sure that the payment terms both with our suppliers and our customers stay in the line with our policies.

Brian McGoth (Morgan Stanley): Is there anything else you can do or are doing to help your partners over in Asia continue to stay profitable even at a time when they are continually being hit with increased labor costs and raw material increases?

Mark Parker: A lot of the things we do in terms of manufacturing practices and how we design and develop products and how we run our supply chain have benefits both for us and for them. The strategy is make the whole pie bigger and then everybody’s slice gets bigger; not redistribute the same pie. We are always trying to make sure the business itself is more efficient and that is how everybody is better off.

Omar Saad (Credit Suisse): What do you think the impact of cost inflation, commodity prices rising and wage inflation in the Far East will be from a longer term perspective?

Charlie Denson: As we have discussed before there are macro economic factors and ebb and flow and to some degree you can not control those. You can manage them. Oil and labor costs and so on fall into that category. I think over time we are going to see long term increases in labor costs in Asia and energy costs are going to go up and down but generally I do not think we would expect to see major reductions that last for long periods of time. The way we operate our model is we work the levers we can control. There are several broad areas. One is reducing product costs through things like lean manufacturing and raw material consolidation and style productivity. Those things help us drive the profitability of our products by making sure that we are buying raw materials in larger quantities which improve our leverage in negotiations, that we are amortizing tooling more effectively and that we are using less labor in the product through lean manufacturing techniques. That is one approach that we take. A second approach that we take is keeping the supply chain tight. That means we have less working capital tied up and the factory does as well and everybody sells products through a full margin and maximizes profitability. There is also managing mix and making sure that we are taking price increases at the right spot. We are going to work out levers. We are going to deal with the macro economics as they come and our goal is to keep moving the gross margin higher.

Virginia Genereux (Merrill Lynch): How do you think about the National soccer teams endorsements?

Charlie Denson: One of the cornerstones of this brand has always been our ability to show up on the field of play. What it does from a credibility standpoint, authenticity standpoint, and even in exposure and marketing standpoint has always been a pointed to base since Bill Knight gave his first pair of shoes away. We continue to believe in it. We continue to see the benefits of it. It does move the market place. Especially I think you are referring to our latest signing of the French National team. What it means to have one of the big five national teams down in the brand is a monumental defining moment in our ongoing pursuit and our ability to claim the number one position in the biggest global sport in the world. For us it is not just about looking at it in a specific focused way. It has multiple direct and indirect benefits to the brand. That being said we do not just go about it with a scorched earth approach. We do look at the benefits of the commercial opportunity in regards to the French situation I think I am excited with regards to that one because not only does it give us access to the French National team but it gives us access to the entire French amateur football academy and operation throughout the country which we do not have today. It has a big commercial upside with respect to that opportunity. Overall it is a big brand plan and is something we feel confident and comfortable with.

Mark Parker: We are being on the offense in terms of the key sports marketing assets that we are looking at. We are trying to be sure that we are dialed in on which ones we are looking at and more dialed in on how to best leverage those opportunities both on a brand and commercial sense. Our connection to the world’s top athletes and teams remains a fundamental platform that we lean on to grow our business and our brand.

Virginia Genereux (Merrill Lynch): You commented a couple of years ago that other overhead was going to grow past the rate of sales and there was a lean year in fiscal 2006. Currencies are o inflating things big but as you look forward how you do think about other overhead?