Nike Faces $1 Billion Trump Tariff Blow, Plans 'Surgical' Price Hikes Starting Fall 2025 To Offset Impact

President Donald Trump‘s tariffs on Chinese imports have increased Nike Inc.‘s NKE costs by $1 billion. As part of their mitigation strategy, the athletic giant plans to start implementing price hikes in the fall of 2025.

Check out the current price of NKE stock here.

What Happened: The Beaverton-based company disclosed the substantial tariff impact during its fourth-quarter earnings call on Thursday, outlining a four-pronged approach to offset costs while maintaining brand positioning.

Chief Financial Officer Matt Friend confirmed the company will implement a “surgical price increase” in the United States with phased rollouts starting in fall 2025.

The tariff headwinds are expected to pressure gross margins by approximately 75 basis points for fiscal 2026, with a greater impact in the first half.

Nike’s comprehensive mitigation strategy includes optimizing sourcing mix, partnering with suppliers and retail partners, implementing selective price increases, and evaluating corporate cost reductions. The company expects to fully offset the billion-dollar impact over time as these actions are implemented and annualized.

The tariff challenge comes as Nike reported mixed fourth-quarter results, with revenue of $11.1 billion beating estimates of $10.72 billion despite a 12% year-over-year decline. Earnings per share of $0.14 exceeded forecasts of $0.12 by 16.67%.

Why It Matters: Nike’s sourcing strategy will significantly shift production allocation. Currently, China represents roughly 16% of footwear imports into the United States, but the company expects this to decline to high single digits by fiscal 2026.

Friend emphasized that “manufacturing capacity and capability in China remains important to our global source base” despite elevated tariffs.

CEO Elliott Hill acknowledged the challenging environment while expressing confidence in Nike’s turnaround strategy. The company is implementing its “Sport Offense” reorganization to drive growth through sport-specific innovation and marketing while cleaning up marketplace inventory.

Price Action: Nike shares rose 2.81% on Thursday to $62.54 and jumped another 10.73% in after-hours trading following its fourth-quarter earnings release.

While Nike ranks low on Benzinga's Edge Stock Rankings overall, the stock is showing a favorable short-term price trend. Click here for deeper insights into Nike and its competitors.