• Nike expects US tariffs to add approximately $1 billion to its costs.
• The company plans to reduce its reliance on production in China from 16% to a "high single-digit percentage" by fiscal 2026.
• Nike will implement a "surgical price increase" on some products in the US starting this fall.
• Recent earnings report showed fourth-quarter revenue fell to $11.1 billion, marking a 12% decline.
• Nike's shares surged following better-than-expected earning forecasts, with an approximate 15% increase.

Nike has announced that it anticipates an additional cost of around **$1 billion** due to tariffs imposed under the US Trump administration, compelling the company to shift production away from China. CFO Matthew Friend emphasized that these tariffs present a significant financial challenge, stating, “These tariffs represent a new and meaningful cost headwind,” during the company's earnings call according to SCMP and Business Insider.

Nike currently derives approximately **16%** of its footwear imported to the US from China, a figure it plans to reduce to a “high single-digit percentage range” by the end of fiscal 2026. Executives have stated that they will optimize their sourcing mix by reallocating production to other countries according to BBC and The Jakarta Post.

To address the cost pressures from tariffs, Nike plans to implement **“surgical price increases”** starting this fall, affecting back-to-school shoppers. Matthew Friend mentioned that while the increases aim to mitigate the impact, companies such as Walmart and Target are also considering similar price hikes due to the same tariff pressures according to India Times and Al Jazeera.

Nike reported a **12% decline** in fourth-quarter revenue, totaling **$11.1 billion**, marking its worst quarterly performance in over three years. However, the company shares surged nearly **15%** in premarket trading after an encouraging earnings forecast, indicating market confidence in its turnaround strategy amidst these challenges according to Reuters and Anadolu Agency.

The company also indicated that it would evaluate corporate cost reductions to soften the financial blow from tariffs. Despite challenges in the market, such as a reported **20% decline** in China's sales, Nike is focusing on revitalizing its running category, which has begun to rebound with newer product launches according to SCMP and Business Insider.