Nike soars on a production shift away from China, but it warns of a $1
billion tariff hit
[June 28, 2025] By
MICHELLE CHAPMAN
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 $1
billion before it makes internal changes, which include “surgical” price
increases in the U.S. 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 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% of the footwear that Nike
imports into the U.S., 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 U.S. 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.”
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The Nike logo is shown on a store in Miami Beach, Fla. on Aug. 8,
2017. (AP Photo/Alan Diaz, File)
 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 $211 million,
or 14 cents per share. Revenue totaled $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 U.S. 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% at the
opening bell Friday.
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