Nike on Thursday announced significantly reduced quarterly profits but indicated that it is moving past the most challenging phase of its corporate restructuring. The sportswear giant is implementing “surgical” price increases in the US to offset tariff-related costs.
The Oregon-based company, which has been grappling with an oversupply of merchandise that failed to resonate with consumers, reported a profit of $211 million in its fiscal fourth quarter. This represents a substantial 86 percent decline from the same period last year. Revenues also fell by 12 percent to $11.1 billion, with the steepest drops observed in Nike’s Greater China region.
Nike had previously forewarned that Thursday’s results would be challenging as it implements its “Win Now” initiative, designed to revamp the organization, foster innovation, and strengthen relationships with wholesalers.
“The fourth quarter reflected the largest financial impact from our Win Now actions, and we expect the headwinds to moderate from here,” stated Chief Financial Officer Matthew Friend. Friend estimated a gross impact of $1 billion in costs stemming from current US tariffs.
To mitigate these costs, the company aims to reduce its share of footwear imported from China to the United States from the current 16 percent to nine percent by the end of its fiscal 2026. Friend also confirmed that Nike has initiated “a surgical price increase” in the United States, with a “phased implementation” scheduled to begin in the fall. He added that Nike is collaborating with retailers and suppliers to minimize the impact on consumers. These comments further elaborated on Nike’s May 21 announcement regarding price increases due to tariffs.
Friend indicated that the most significant impact on earnings from tariffs is expected in the upcoming quarter, which marks the first quarter of Nike’s fiscal 2026. However, he expressed confidence, stating, “We’re confident in our ability to fully mitigate these over time.”
Chief Executive Elliott Hill reported improved sales following recent collaborations with wholesalers Dick’s Sporting Goods and JD Sports. “Momentum and confidence are building in North America and EMEA (Europe Middle East Africa),” Hill noted, though he described progress in some other countries as slower. “China will take longer,” he acknowledged.
Shares of Nike saw a positive response, rising 4.7 percent in after-hours trading.
