Nike posted earnings that exceeded analyst forecasts for the quarter but issued a warning that new U.S. tariffs could trim up to $1 billion from its profits this fiscal year. As it pushes forward with its turnaround plans, the company is under added strain, working to revise pricing and overhaul its supply chain.
Chief Financial Officer Matt Friend called the tariffs a “new and meaningful” expense, outlining plans to mitigate the impact through price increases, supply chain changes, and continued factory partnerships. Currently, China accounts for 16% of Nike’s supply chain, though that share is projected to shrink to single digits by next summer.
Earnings came in above estimates at $0.14 per share versus the expected $0.13, but net income dropped significantly to $211 million from $1.5 billion a year earlier. Revenue also declined 12% to $11.1 billion, driven by heavy discounting, weaker digital sales, and a pivot back to wholesale channels.
CEO Elliott Hill acknowledged that the performance fell short of Nike’s expectations but pointed to initial signs of momentum in the company’s “Win Now” strategy. He highlighted a renewed commitment to sports innovation and efforts to regain market share in North America and China.
Recent moves include Nike’s return to Amazon, new partnerships with Aritzia and Urban Outfitters, and a sold-out sneaker release for WNBA star A’ja Wilson. However, its collaboration with Kim Kardashian’s Skims brand remains delayed.
Looking ahead, Nike expects sales and profit declines to ease in the coming quarters despite ongoing challenges.
