Nike to Hike Prices in US After Earnings Bottom Out Amid Tariff Impact

American sportswear maker Nike plans to raise prices of its shoes in the US after reporting a 14% year-on-year drop in direct sales and a 26% year-on-year plunge in online sales in the fourth quarter of fiscal 2025.

Nike's financial year runs from 1 June to 31 May. In the March–May quarter, the company saw its revenue decline 12% year-on-year to $11.1 billion. In North America, Q4 revenue fell 11%. In EMEA, it declined 10%, and in the Greater China region (China, Hong Kong, Macao, and Taiwan), Nike's revenue dropped 20%, which President and CEO Elliot Hill said was "largely in line with our plan."

Hill, who was brought out of retirement last October, is leading the company’s efforts to fix past missteps, such as cutting wholesale ties and overemphasising lifestyle shoes. Facing tariffs, weak consumer spending, and tough competition, Hill is now focusing on retail partnerships, launching new products, and a return to core sports offerings.

“We’re organising into a sport offence to have deeper relationships with the athletes we serve, to gain better insights, to drive sport-specific innovation, tell inspiring stories and differentiate ourselves in the marketplace,” he told analysts.

While the company's earnings declined, it beat analysts' expectations. Earnings per share (EPS) and revenue exceeded forecasts by 16.67% and 3.74%, respectively.

Earnings Bottom Out, Improvement Expected

Following the earnings announcement, Nike shares rose as much as 10% in after-hours trading on the New York Stock Exchange.

“From here, we expect our business results to improve. It’s time to turn the page,” said CEO Hill.

A key part of Hill’s turnaround strategy is rebuilding ties with retailers, including a return to Amazon with a dedicated Nike store. The company is also clearing shelf space by discounting older inventory, which was down 0.4% last quarter. CFO Matt Friend said the clean-up process is on track.

Meanwhile, Nike’s women’s segment faced delays, including the postponed launch of NikeSkims with Kim Kardashian due to production issues.

Price Hikes, Supply Shift from China to Offset Tariff Impact

CEO Elliot Hill told analysts that the new US tariffs announced by President Donald Trump present “a new and meaningful cost headwind,” prompting Nike to take several steps to protect its margins and brand positioning.

To mitigate the impact, Nike will shift production away from China, which currently accounts for around 16% of its US footwear imports. “We expect this to reduce to the high single-digit range by the end of fiscal 2026,” Hill said, adding that China will still remain a key part of the company’s global supply chain.

The company is also working with suppliers and retail partners to absorb part of the cost burden and has begun implementing targeted price increases in the US market starting in autumn 2025. “We’ve implemented a surgical price increase as part of our regular seasonal planning,” he added.

Nike expects the tariff-related cost increase to total around $1 billion, with a 75 basis point hit to gross margin in FY2026—mostly concentrated in the first half of the year.