Nike CFO: Company expects $1B hit from Trump's tariffs

Nike CFO: Company expects $1B hit from Trump's tariffs

Nike's stock price has taken a significant hit following the announcement that the company expects to incur a $1 billion loss due to President Trump's tariffs. The revelation was made during the company's earnings conference call by Matt Friend, the CFO of Nike [2].

The tariffs, which are part of the ongoing trade war, are estimated to impact Nike's operations by increasing costs for imported products. Friend stated that the company is actively working to mitigate the impact of these tariffs by optimizing its sourcing mix and reallocating production across different countries. This strategy aims to reduce the reliance on Chinese suppliers, which currently account for around 16% of Nike's footwear imported into the United States [2].

Nike's stock price has been volatile in recent months, with shares jumping 9% in extended trading following the earnings report but down about 17% for 2025 through Thursday's close [3]. The company's stock price has been particularly sensitive to geopolitical dynamics and new tariffs, which have been a significant challenge for the sportswear giant.

The company's fourth-quarter earnings report highlighted the impact of these challenges, with gross margins potentially dropping between 400 and 500 basis points due to restructuring charges and tariffs [3]. Despite these challenges, Nike's CEO Elliott Hill emphasized the company's renewed focus on sports and innovation as a path forward.

Nike's reliance on Vietnam for manufacturing, which accounts for over 50% of its shoes, has also been a significant factor in the company's recent struggles. The tariffs on Vietnam could further exacerbate these issues, potentially leading to increased costs or a shift in production [1].

As the company works to navigate these challenges, investors are closely monitoring Nike's ability to adapt and mitigate the impact of the tariffs. The company's strategy of optimizing its supply chain and focusing on innovation will be crucial in determining its future performance.

References:
[1] https://www.tortoisemedia.com/2025/04/10/nikes-supply-chains-at-risk-after-trump-tariffs
[2] https://www.investopedia.com/nike-expects-to-take-usd1b-hit-from-trump-s-tariffs-cfo-says-11762322
[3] https://qz.com/nike-q3-2024-earnings-elliot-hill-trump-tariffs-china-c-1851771539