Nike braces for $1B tariff hit

Nike expects to incur an additional USD1 billion in costs due to tariffs imposed during the Trump administration, prompting the company to accelerate efforts to diversify its supply chain away from China.

“These tariffs represent a new and meaningful cost headwind,” said Matthew Friend, Nike’s chief financial officer, during the company’s earnings briefing on Thursday.

“With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately USD1 billion. We intend to fully mitigate the impact of these headwinds over time,” he added.

In 2023, almost 60 percent of Nike-branded apparel came from Vietnam, China, and Cambodia, while 95 percent of its footwear was made in Vietnam, Indonesia, and China. 

Despite China’s continued role in Nike’s supply chain, the company aims to slash US footwear imports from China—from around 16 percent to the high-single-digit range—by the end of fiscal year 2026.

To offset the added costs, Nike will roll out a “surgical price increase” in the US starting this fall and implement corporate cost-cutting measures.

The company reported a steep 86 percent drop in net income for the fourth quarter, falling to USD211 million, with revenue sliding 12 percent to USD11.1 billion—its worst quarterly performance in over three years.