- Nike plans to raise prices to offset $1 billion in additional tariff costs in fiscal year 2026.
- The company aims to reduce reliance on China, which makes up 16% of its US footwear imports.
- Nike's revenue fell 10% year over year in fiscal year 2025, despite beating analyst expectations.
Nike shoppers may need to save a little more for that next pair of running shoes.
The company is hiking prices for US customers to offset an expected $1 billion cost increase from tariffs, Nike told investors on Thursday.
"These tariffs represent a new and meaningful cost headwind," CFO Matthew Friend said as the company reported earnings for its fourth quarter of fiscal year 2025.
The company is making a "surgical price increase" in the US with a "phased implementation" that would begin in the fall, Friend said. He didn't expand on what products would be affected or by how much.
Price checks suggest the cost of some Nike products has already increased this year. In May, BMO Capital analysts said they observed price increases of $5 to $10 on the Nike website.
During Thursday's earnings call, Friend outlined a four-part strategy — including the price increases — to mitigate the $1 billion tariff costs, beginning with diversifying its sourcing and allocating production across countries.
Nike said 16% of the footwear it imports to the US comes from China. It expects that share to drop to the high single digits by the end of fiscal year 2026.
It also plans to work with suppliers and retail partners to minimize the impact of tariffs on consumers. Friend told investors that these arrangements will go into effect throughout fiscal 2026.
He also said the company would "evaluate corporate cost reduction."
Nike's revenue for its 2025 fiscal year fell 10% year over year to about $46 million, the company reported Thursday. However, it beat Wall Street's modest expectations for quarterly sales and profit and said it expects the declines to moderate looking ahead. It expects the tariff impact to be greatest in the first half of its 2026 fiscal year.
CEO Elliott Hill took the helm of Nike about eight months ago. He's been trying to get the company back on track by slashing promotional sales, improving its wholesale relationships with major retailers, and putting sports at the forefront of its strategy.
