Nike plans to significantly reduce its reliance on Chinese manufacturing for the US market as part of a strategy to blunt the financial impact of President Donald Trump’s newly imposed tariffs on imports.
The company’s move, coupled with a better-than-expected revenue forecast, sent shares up 11% in extended trading.
Currently, about 16% of Nike’s US shoe imports come from China, according to CFO Matthew Friend. Nike aims to reduce that figure to a high single-digit percentage by May 2026, reallocating production to other regions to help absorb an estimated $1 billion in added costs from the tariff measures.
To further offset tariff pressures, Nike is evaluating corporate cost reductions and has already implemented price increases on select US products.
“The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share,” said David Swartz, analyst at Morningstar Research.
CEO Elliott Hill’s strategy to focus on sport-driven innovation is beginning to gain traction, with Nike’s running category returning to growth after several weak quarters.
The brand’s investment in performance shoes like the Pegasusand Vomero has helped offset declines in classic lifestyle sneakers such as the Air Force 1.
Marketing spend rose 15% year-over-year, underscored by high-profile events like Kenyan runner Faith Kipyegon’srecord-setting mile attempt, live-streamed from Paris.
Despite headwinds, Nike beat Q4 revenue expectations, posting $11.10 billion in sales — a 12% decline that still outperformed estimates of a nearly 15% drop.
First-quarter revenue is now expected to fall in the mid-single digits, slightly better than analysts’ projections of a 7.3% decline.
While China remains a weak spot, executives said a recovery will take time due to economic softness and competitive pressures. Nike’s inventory stood flat year-over-year at $7.5 billion as of May 31.
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