Nike Warns of $1 Billion Tariff Hit Amid Turnaround Efforts

Nike reported stronger-than-expected earnings in its latest quarter but warned that new U.S. tariffs could cost the company up to $1 billion this fiscal year. Despite progress in its turnaround strategy, the sneaker giant faces fresh pressure as it adjusts pricing and reshapes its supply chain.

Chief Financial Officer Matt Friend described the tariffs as a “new and meaningful” cost, noting plans to offset the impact through price hikes, supply chain shifts, and ongoing factory partnerships. Currently, 16% of Nike’s supply chain is based in China, but that share is expected to drop to single digits by next summer.

While earnings topped expectations—$0.14 per share vs. $0.13 expected—net income fell sharply to $211 million from $1.5 billion a year ago. Revenue declined 12% to $11.1 billion, reflecting steep discounting, weak digital sales, and a shift back to wholesale.

CEO Elliott Hill acknowledged that results fell short of Nike’s standards but insisted the "Win Now" plan is beginning to show progress. He emphasized renewed focus on sports innovation and efforts to recover lost market share in North America and China.

The company’s return to Amazon, partnerships with Aritzia and Urban Outfitters, and a sold-out sneaker launch for WNBA star A’ja Wilson signal a more aggressive push toward retail relevance. However, Nike’s collaboration with Kim Kardashian’s Skims line remains delayed.

Despite near-term challenges, Nike said it expects sales and profit declines to moderate in the coming quarters.