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Delhi News Daily > Blog > Fashion > Nike soars on production shift away from China, but it warns of USD 1 billion tariff hit – ET Retail – Delhi News Daily
Fashion

Nike soars on production shift away from China, but it warns of USD 1 billion tariff hit – ET Retail – Delhi News Daily

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Last updated: June 28, 2025 10:19 am
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Nike’s shares jumped at the opening bell Friday after the company said it’s shifting some production away from China. But it also warned that tariffs imposed by the Trump administration will cost it about USD 1 billion before it makes internal changes, which include “surgical” price increases in the US starting this fall.

Nike is not the first retail company to warn of price hikes when students are heading back to school. Walmart said last month that its customers will start to see higher prices this month and next when the back-to-school shopping season goes into high gear.

Walmart also cited higher costs from tariffs.

Nike is shifting production to avert looming tariffs in China. Production in China represents about 16 per cent of the footwear that Nike imports into the US, Chief Financial Officer Matthew Friend said during a conference call late Thursday. That production will be cut to the high-single-digit range by the end of fiscal 2026 as Nike shifts production elsewhere, he said.

President Donald Trump and his Commerce Secretary Howard Lutnick said late Thursday that the US and China have signed an agreement on trade, but provided no details.

Nike, Adidas, Under Armour and Puma were among 76 companies that signed on to a letter in April addressed to Trump, asking for a footwear exemption from reciprocal tariffs. The letter warned tariffs would “become a major impact at the cash register for every family.”

Nike said that it will begin to implement “surgical” price increases as part of its regular approach to seasonal planning, beginning this fall, Friend said.

The potential for higher prices from Trump’s tariffs have raised alarms for families, notably those who already spend a good chunk of money on equipment needed to participate in sports.

Also on Thursday, Nike reported a quarterly profit of USD 211 million, or 14 cents per share. Revenue totalled USD 11.1 billion. Both edged out Wall Street projections.

Nike is already facing a pullback in spending by Americans, who have grown anxious about the direction of the US economy. While it’s still the most significant brand in sportswear, a “boredom factor” seems to have settled over the Nike brand, wrote Neil Saunders, Managing Director of GlobalData.

“In markets like China, where overall market growth has slowed a little, Nike is also on the back foot for similar reasons,” Saunders wrote. “We also see some anti-US brand sentiment creeping in, which is unhelpful and difficult to resolve.”

Shares of Nike, based in Beaverton, Oregon, jumped 15 per cent at the opening bell Friday. (AP)>

  • Published On Jun 28, 2025 at 09:50 AM IST

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