Nike announced Thursday that it expects to face $1 billion in added costs as a result of President Donald Trump’s tariffs, calling them a “new and meaningful cost headwind.” Chief Financial Officer Matthew Friend told analysts that Nike plans to fully offset the financial hit by cutting back its reliance on Chinese manufacturing and passing some of the costs on to consumers through price increases.
While China remains a key part of Nike’s global supply chain, the company is reducing the percentage of footwear imported from China into the U.S. from around 16% to the “high-single-digit range” by the end of fiscal 2026, shifting production to other countries.
The financial toll of the tariffs, along with weakening consumer spending, hit Nike hard in the fourth quarter. Net income plunged 86% to $211 million, down sharply from $1.5 billion a year earlier.
Despite the steep drop, CEO Elliott Hill struck an optimistic tone, saying it’s “time to turn the page.” He outlined plans to aggressively streamline three major product lines—Air Force 1, Dunk, and Air Jordan—as part of a broader effort to revitalize the brand. The company made no mention of its delayed collaboration with Kim Kardashian’s NikeSkims on the earnings call.
Investors appeared to welcome the renewed focus and forward-looking message. Nike’s stock surged nearly 11% in premarket trading Friday.
Hill is steering the company back to its athletic roots, a shift in direction from the previous CEO. He said Nike, Jordan, and Converse teams will now work with a renewed mission: to create the most innovative and desirable products—footwear, apparel, and accessories—specifically tailored to the athletes they serve. This sharper focus on sport, Hill argued, will differentiate the three brands, make Nike more competitive, and help drive growth.
Neil Saunders, managing director of GlobalData, noted in a research note that he has “some confidence” Nike has passed the worst of its recent profitability issues. He emphasized that Nike is still the dominant brand in the global sportswear market, though that prominence means the company must constantly defend its share from growing competition.
“Nike remains the most significant brand in sportswear by a large margin,” Saunders wrote. “This means new growth does not come easily, but it also shows Nike’s continued relevance and strong foundation for future expansion.”