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Nike sees $1B hit from tariffs
The world's largest shoe company on Thursday said that current tariffs in place could lead to an additional cost increase of about $1B. Nike's (NKE) warning came after it reported FQ4 2025 results that beat lowered expectations, though both revenue and profit fell on a Y/Y basis.
Shares of the Dow 30 component, however, jumped more than +10% in Friday pre-market hours. Investors cheered Nike's (NKE) plans to reduce its reliance on China by reallocating supply from the Asian nation to other countries around the world.
"Despite the current elevated tariffs for Chinese products imported into the United States, manufacturing capacity and capability in China remains important to our global source base," CFO Matthew Friend said on the earnings conference call. "Currently, China represents roughly 16% of the footwear we import into the United States, and we expect this to reduce to the high single-digit range by the end of fiscal '26," he added.
Nike (NKE) generated sales of $6.59B from Greater China in fiscal 2025, its results showed, marking a fall of 13% Y/Y. That figure represented 14.2% of the company's total revenue of $46.31B.
Aside from its reallocation actions, Nike (NKE) also plans to mitigate tariff-related cost headwinds through partner arrangements with suppliers, price increases and corporate cost reductions.
Nike's (NKE) struggles over the past year have been well documented, with the company embarking upon an ambitious turnaround plan under new top boss Elliott Hill amid deteriorating sales and souring demand. Both Jefferies and Morgan Stanley said its FQ4 results marked a potential bottom and that things would improve from here.
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Today's Markets
In Asia, Japan +1.4%. Hong Kong -0.2%. China -0.7%. India +0.4%.
In Europe, at midday, London +0.5%. Paris +1.3%, Frankfurt +0.6%.
Futures at 6:30, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude +0.8% to $65.73. Gold -1.3% to $3,286.60. Bitcoin -0.3% to $107,097.
Ten-year Treasury Yield +3 bps to 4.27%.
On The Calendar
Companies reporting today include Apogee Enterprises (APOG).
See the full earnings calendar on Seeking Alpha, as well as today's economic calendar.
