Nike Inc. is bracing for a potential $1 billion financial blow due to elevated tariffs introduced under the Trump administration, the company’s Chief Financial Officer, Matt Friend, revealed during its fiscal fourth-quarter earnings call. While reporting stronger-than-expected results, Nike emphasized that the tariffs on Chinese imports have emerged as a significant cost pressure.
A friend stated that about 16% of Nike’s U.S.-bound footwear currently comes from China. However, the company plans to reduce that number to a “high single-digit range” by the end of fiscal 2026. This shift will be part of a broader effort to reallocate supply chains away from China, even though the country will remain an important part of Nike’s global manufacturing base.
“To mitigate the impact, we are optimizing our sourcing mix and diversifying production,” Friend noted. In response to rising costs, Nike beat Q4 is also preparing phased price increases in the U.S. starting this fall, while working closely with partners to limit the burden on consumers.
Nike beat Q4 Performance Outpaces Expectations Despite Yearly Decline
Despite these trade-related headwinds, Nike posted better-than-expected earnings for its fiscal Q4, marking the eighth consecutive quarter of outperforming Wall Street’s bottom-line expectations. The company reported earnings of $0.14 per share, surpassing estimates by $0.02. Revenue came in at $11.1 billion, beating analyst predictions but falling short of last year’s $12.61 billion in sales.
Nike’s full-year revenue of $46.3 billion also exceeded the Zacks consensus forecast, though it reflected a 10% drop from the previous year. Regional declines were consistent, with North America and global revenues both down 11% year-over-year.
CEO Elliott Hill, currently leading the company’s turnaround efforts, has focused on realigning operations and cost management. The CFO emphasized that Nike is considering corporate cost reductions to absorb financial pressure from tariffs while aiming to “fully mitigate” their long-term impact.
Markets Unshaken by Tariff Concerns as Nike Shares Rally
Nike beat Q4 estimates, and its shares rose by 9% in after-hours trading on Thursday, despite sobering tariff news and a weak annual performance. The stock had been down approximately 17% in 2025 before the earnings call but received a boost thanks to stronger-than-feared quarterly results.
Broader market sentiment remains optimistic, with investors seemingly unfazed by the upcoming July 9th deadline for reciprocal tariffs. The White House has signaled that the date is “not critical,” diminishing concerns of immediate trade disruptions.
Meanwhile, worsening jobless claims and hopes for future Federal Reserve interest rate cuts are influencing market dynamics. Tech stocks, such as NVIDIA and Palantir, continue to surge, helping push the S&P 500 near record highs, while sectors like housing await relief from potential interest rate adjustments.
