Nike stock price: Why shares are rising despite the shoe giant's revenue decline and serious tariff warning

Fast Company

a day ago

Shares in Nike, Inc. (NYSE: NKE) are trading much higher this morning after the company announced its Q4 2025 results. Yet those results saw Nike post some of its worst earnings in a while, along with a warning that President Trump's tariffs would cost the company $1 billion in the near term.
Here's what you need to know about Nike's latest earnings and why the stock is up.
Nike reports a revenue decline
Yesterday, the iconic shoemaker announced its Q4 2025 and full-year fiscal 2025 earnings.
The results weren't great. For fiscal 2025, Nike reported full-year revenues of $46.3 billion—a 10% decline from fiscal 2024. The company's Q4 2025 revenues totaled $11.1 billion—down 12% from the same quarter a year earlier. The company also posted an earnings per share of 14 cents for its Q4. That EPS was down significantly from the 99 cents the company posted in the same quarter a year earlier.
However, perhaps most alarming was the fact that Nike confirmed it would take a $1 billion hit in its current 2026 fiscal year due to the tariffs imposed by President Trump on countries worldwide.
The two countries where Nike makes a significant amount of its goods are China and Vietnam. Earlier this year, Trump placed a 46% tariff on goods manufactured in Vietnam and a triple-digit rate on goods made in China. He later reduced both rates, temporarily, to 10% and 30% respectively.
Still, Nike chief financial officer Matt Friend said on Nike's earnings call that the tariffs currently in place will result in a 'new and meaningful' cost to Nike, notes CNBC, adding that the company estimates that 'a gross incremental cost increase to Nike of approximately $1 billion.'
So why are Nike shares up?
You would think that Nike's warning of up to $1 billion in tariff-related costs and its pretty dismal Q4 results would send the stock down, not up. But NKE stock is currently up, and significantly, as of the time of the writing. In premarket trading, NKE shares are currently up over 10% to $68.85.
There are a few likely reasons for this.
First is that, while Nike's Q4 wasn't anything to write home about, the company actually came in above most Wall Street estimates. Analysts had expected Nike to have a pretty poor quarter already, and indeed, as noted by CNBC, Nike had previously said its Q4 would be the low point of its turnaround.
This turnaround involves Nike's pivot to return its focus to athletes and shift away from its recent history of trying to cater to the wider 'lifestyle' segment of the population. The turnaround was initiated after Nike brought in a new CEO, Elliott Hill, last October.
For its Q4, analysts had been expecting revenue of $10.72 billion and an EPS of 13 cents. So though Nike's Q4 results were disappointing, especially compared to earlier quarters, its actual revenue of $11.1 billion and adjusted EPS of 14 cents came in above expectations—something investors typically reward.
But another reason the stock is likely rising in premarket trading is also related to that $1 billion hit Nike is expecting.
Though the company says it expects the 10-figure hit this financial year, CFO Matt Friend also said Nike expects to 'fully mitigate' Trump's tariff costs over time.
Nike will mitigate these tariff costs by using a three-pronged approach:
adjusting its supply chain sources
getting its suppliers to absorb some of the costs
raising prices on U.S consumers later this year
NKE shares are still red for the year
Despite Nike's 10% price surge this morning, shares in the company are still down significantly for the year.
As of yesterday's close, Nike shares were sitting at $62.54—down more than 17% for the year. However, that was still significantly above its April lows of nearly $52 per share after President Trump unleashed his 'Liberation Day' tariffs on the world.
Over the past 12 months, Nike's shares were down more than 33% as of yesterday's close.