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Nike said that it would reduce its dependence on production in China for the American market to mitigate the impact of American prices on imports and foresee a smaller than expected drop in the first quarter.
The actions of the giant sports clothing zoomed in 15% at the opening bell on Friday morning after announcing the change jointly with its profits report published Thursday.
US President Donald Trump Balayage rates on imports The main business partners could add about $ 1 billion to Nike costs, the business managers said during a post-benefit call after the sportswear giant exceeded the estimates for the fourth quarter results.
China, subject to the largest rate increases imposed by Trump, represents around 16% of the shoes that Nike imports in the United States, said financial director Matthew Friend. However, the company aims to reduce the figure to a “percentage range to a high figure” by the end of May 2026 because it produces Chinese production in other countries.
“We are going to optimize our supply mixture and allocate production differently from all countries to mitigate the new wind from the United States,” he said during an appeal to investors.
Consumer goods are one of the areas most affected by the tariff dispute between the two largest economies in the world, but Nike managers said they were focused on reducing financial pain. Nike “will evaluate” business costs reductions to deal with the pricing impact, said Friend. The company has already announced price increases for certain products in the United States.
“The tariff impact is important. However, I expect other people in the sportswear industry to also increase prices, so that Nike may not lose much in the United States,” said David Swartz, analyst at Morningstar Research, at the Reuters news agency.
The strategy of the CEO Elliott Hill aimed at concentrating innovation and marketing of products around sports begins to show fruit, the up -to -date race category returning to growth in the fourth quarter after several quarters of weakness.
Having lost a share on the rapid growth market, Nike has invested massively in racing shoes such as Pegasus and Vomero, while reducing the production of sneakers such as Air Force 1.
“The race worked particularly strongly for Nike,” said Citi Monique Pollard analyst, adding that new racing shoes and sportswear products should compensate for the decrease in classic Nike sneakers in wholesale partners.
Marketing expenses increased by 15% over a year during the quarter.
On Thursday, Nike organized an event in which its sponsored athlete Faith Kipyegon tried to run a mile in less than four minutes. Hunted by other star athletes during the sumptuous event which was broadcast live from a Paris stadium, Kipyegon did not succeed but has set a new unofficial record.
Nike plans that the first quarter income falls into intermediate figures, slightly better than analysts’ expectations of a drop of 7.3%, according to data compiled by LSEG. Its fourth quarter sales dropped from 12% to $ 11.10 billion, but have still beaten an estimates of a drop of 14.9% to $ 10.72 billion.
China has continued to be a point of pain, the leaders saying that a turnaround in the country will take time because Nike affirms with economic conditions and more strict competition.
The imminent trade agreement as prices increase
Nike misfortunes come as a commercial work with China could be on the horizon. The American secretary of the Treasury, Scott Bessett, said on Friday that the administration could have an agreement with Beijing by the Labor Day, which is on September 1.
Under the agreement, the United States will probably impose prices of 55% in all areas of Chinese products, against 145%, still a major burden on businesses.
According to a survey by Allianz Global Trade last month, 38% of companies say they will have to increase prices for consumers, Nike being the last.
In April, the competitor Adidas said that he should possibly increase prices for American consumers.
“Cost increases due to higher prices will eventually lead to price increases,” said CEO Bjorn Gulden at the time.
Walmart said last month That its customers will see higher price labels in its stores while the largest large box retailer in the country is preparing for the season of return to school shopping.
Target, who had a bad first quarter Pushed by boycotts and the imminent threat of the prices, was also struck while the large box retailer obtains 30% of his goods from China.
