Latest news with #MatthewFriend
The Independent
5 hours ago
- Business
- The Independent
Your Nike shoes are about to cost a whole lot more thanks to Donald Trump, company warns
Nike warned that tariffs imposed by President Donald Trump will cost the company about $1 billion as it looks to make 'surgical' price increases in the fall. The company is shifting production away from China, where Nike makes about 16 percent of the footwear it imports into the U.S., Chief Financial Officer Matthew Friend told investors Thursday. 'We will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States,' Friend said on the call. The sports giant appears to be unloading some of the burden of the tariffs onto customers. Last month Nike announced it was increasing prices for adult apparel and equipment by $2 to $10 from June 1. It forecast that footwear costing between $100 to $150 would rise by $5, while shoes costing above $150 would increase by $10. There were some exceptions — the price of children's products, Nike Air Force 1s or Jordan products would not rise. 'We regularly evaluate our business and make pricing adjustments as part of our seasonal planning,' Nike previously said in a statement, without mention of the tariffs. Nike also reported a quarterly profit of $211 million, or 14 cents per share. Revenue totaled $11.1 billion. Both edged out Wall Street projections. Nike, Adidas, Under Armour and Puma were among 76 companies that signed a letter in April addressed to Trump, asking for a footwear exemption from reciprocal tariffs. The letter warned tariffs would 'become a major impact at the cash register for every family.' The potential for higher prices from Trump's tariffs have raised alarms for families, notably those who already spend a good chunk of money on equipment needed to participate in sports. Trump and his Commerce Secretary Howard Lutnick said late Thursday that the U.S. and China have signed an agreement on trade, but provided no details. Elsewhere, Trump on Friday said he was suspending all trade talks with Canada — and making plans to force Americans to pay high import taxes on its goods — after the northern ally's finance department confirmed plans to collect a digital services tax.
Yahoo
9 hours ago
- Business
- Yahoo
Nike stock soars 15% as company forecasts smaller sales, profit drops while tariff costs near $1 billion
Nike (NKE) stock soared on Friday after the sneaker giant said its profit and sales declines would narrow in the current quarter, while costs from tariffs are expected to approach $1 billion as the company makes additional moves to diversify its supply chain away from China. Nike said Thursday it expects sales to be down by mid-single digits in the current quarter following a 12% drop in revenue during its fiscal fourth quarter ended May 31. Gross margins fell by 440 basis points, or 4.4%, in its fourth quarter and are forecast to fall by 350-425 basis points in the current quarter. Shares rose 15.2% on Friday, bringing Nike's year-to-date losses to less than 5%; in early April, Nike stock was down 30% in 2025 alone. Read more about Nike's stock moves and today's market action. On its conference call with investors late Thursday, Nike CFO Matthew Friend said newly implemented US tariffs "represent a new and meaningful cost headwind." Nike expects a 100 basis point negative impact on its gross margins as a result of tariffs. Friend added the company sees a "gross incremental cost increase to Nike of approximately $1 billion," adding, "We intend to fully mitigate the impact of these headwinds over time." On Thursday, Nike said it plans to cut its reliance on China for manufacturing the goods it sells in the US as part of this strategy. Chinese suppliers currently account for about 16% of the shoes it imports into the US, and the company said on its earnings call that it expects to bring that down to "high single-digit range" by the end of this fiscal year. The company also announced plans for a "surgical price increase" in the US, which is set to begin this fall. Read more: What Trump's tariffs mean for the economy and your wallet Nike has been challenged by the sweeping tariffs announced by President Trump earlier this year, with those impacts still uncertain given its global operational footprint and exposure both to China and Vietnam. The company has been diversifying its manufacturing base since Trump's first term in office. In 2024, it produced 18% of its apparel and 16% of footwear in China, compared to 26% and 29%, respectively, in 2016. Nike's struggles in China have also continued, with revenue falling 20% in the region last quarter, driven by a footwear and apparel sales decline of 20% and 19%, respectively. For its fiscal fourth quarter, ended May 31, Nike reported revenue of $11.1 billion, a 12% decline that was lower than Wall Street forecasts for a nearly 15% decline to $10.72 billion, according to Bloomberg data. Adjusted earnings per share tallied $0.14, compared to the forecast $0.13 per share. That was far lower than the $1.01 per share in earnings it reported in the same quarter last year. Same-store sales at Nike-owned stores ticked higher, rising 2% compared to the 2.6% decline analysts anticipated. "While our financial results are in line with our expectations, they are not where we want them to be. Moving forward, we expect our business to improve as a result of the progress we're making," CEO Elliott Hill said in the release. Alongside the tariffs headwinds, Nike is also facing deteriorating consumer confidence as it aims to get customers back in stores and competes with rivals like On (ONON) and Hoka (DECK). Nike stock is still down over 6% this year with Friday's surge but has rebounded sharply from its April 8 lows, the day before President Trump paused his most dramatic tariffs announced on "Liberation Day." The company is also banking on certain innovations like the launch of Vomero 18, Jordan Retros, A'One, and a collaboration with Kim Kardashian. Nike is also patching up its wholesale partnerships with the likes of Dick's Sporting Goods (DKS) and Macy's (M) after it decided to focus on its direct-to-consumer business. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy
Yahoo
10 hours ago
- Business
- Yahoo
Nike Faces a $1 Billion Tariff Hangover
Nike just flagged a potential $1 billion hit from U.S. tariffs on Chinese importseven as it smashed May sales records and retooled its supply chain. In FQ4, the company beat revenue and profit estimates but still saw both metrics slip year over year. Tariffs are the wildcard now, and Nike plans to shift some production out of China (currently 16% of U.S. imports) to bring that share down into the high single digits by FY '26. Investors liked the sound of that supply shuffle: NKE shares popped over 10% in Friday's premarket. CFO Matthew Friend says China remains a crucial hub, but diversifying makes sense with trade tensions on the rise. The real question is whether these movesand selective price hikescan offset the extra costs and keep margins intact. Balancing cost pressures with consumer demand is tricky. Nike's resilience in hitting new sales highsdespite a 13% drop in Greater China revenueshows its brand power. But execution on tariff relief, supplier deals, and cost cuts will be the true test in coming quarters. Nike's current consensus target sits at $72about 15% above today's levelswhile the most optimistic bull case sees shares reaching $120 over the next year. Even the GF Value line at $96 suggests room to run versus the sub-$63 trade. That said, a bear scenario still hangs around $40, underscoring wide divergence in views. Overall, analysts appear cautiously constructive, but any sustained tariff or consumer-spending headwinds could tilt outcomes toward the lower end. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Los Angeles Times
10 hours ago
- Business
- Los Angeles Times
Nike soars on a production shift away from China, but it warns of a $1 billion tariff hit
Nike's shares jumped at the opening bell Friday after the company said it's shifting some production away from China. But it also warned that tariffs imposed by the Trump administration will cost it about $1 billion before it makes internal changes, which include 'surgical' price increases in the U.S. starting this fall. Nike is not the first retail company to warn of price hikes when students are heading back to school. Walmart said last month that that its customers will start to see higher prices this month and next when the back-to-school shopping season goes into high gear. Walmart also cited higher costs from tariffs. Nike is shifting production to avert looming tariffs in China. Production in China represents about 16% of the footwear that Nike imports into the U.S., Chief Financial Officer Matthew Friend said during a conference call late Thursday. That production will be cut to the high-single-digit range by the end of fiscal 2026 as Nike shifts production elsewhere, he said. President Donald Trump and his Commerce Secretary Howard Lutnick said late Thursday that the U.S. and China have signed an agreement on trade, but provided no details. Nike, Adidas, Under Armour and Puma were among 76 companies that signed on to a letter in April addressed to Trump, asking for a footwear exemption from reciprocal tariffs. The letter warned tariffs would 'become a major impact at the cash register for every family.' Nike said that it will begin to implement 'surgical' price increases as part of its regular approach to seasonal planning, beginning this fall, Friend said. The potential for higher prices from Trump's tariffs have raised alarms for families, notably those who already spend a good chunk of money on equipment needed to participate in sports. Also on Thursday, Nike reported a quarterly profit of $211 million, or 14 cents per share. Revenue totaled $11.1 billion. Both edged out Wall Street projections. Nike is already facing a pullback in spending by Americans, who have grown anxious about the direction of the U.S. economy. While it's still the most significant brand in sportswear, a 'boredom factor' seems to have settled over the Nike brand, wrote Neil Saunders, Managing Director of GlobalData. 'In markets like China, where overall market growth has slowed a little, Nike is also on the back foot for similar reasons,' Saunders wrote. 'We also see some anti-US brand sentiment creeping in, which is unhelpful and difficult to resolve.' Shares of Nike, based in Beaverton, Oregon, jumped 15% at the opening bell Friday. Chapman writes for the Associated Press.
The Guardian
11 hours ago
- Business
- The Guardian
Nike expects Trump tariffs to cost it $1bn
Nike has said it expects costs to increase by about $1bn (£728m) as a result of Donald Trump's tariff war as the sportswear company looks to reduce its manufacturing in China. The market value of the company has dropped by a third over the past year and it is taking action to reduce the hit, including increasing prices in the US and sourcing from other countries. 'These tariffs represent a new and meaningful cost headwind,' said Matthew Friend, Nike's chief financial officer. 'With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately $1bn. We intend to fully mitigate the impact of these headwinds over time.' Last year almost 60% of all Nike-branded apparel was made in Vietnam, China and Cambodia. Vietnam, Indonesia and China manufactured 95% of all Nike footwear last year. 'We have strong relationships with our factory partners, and our leadership team is experienced in managing through disruption,' Friend said. 'Nike has consistently been a top payer of US duties. We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States.' He said manufacturing capacity and capability still remains important to the company, despite the 60% tariff rate imposed by the US, accounting for about 16% of footwear imports to America. Friend said the business was working to minimise the impact on consumers. However, he added that the company would implement a 'surgical price increase' in the US from this autumn, and will aim to reduce overheads through 'corporate cost reduction'. Friend's comments came as Nike reported its worst quarterly earnings in more than three years, as revenues slumped 12% to $11.1bn in the three months to the end of May. Elliott Hill, the chief executive of Nike, said: 'The results are where we planned. That said, we're not happy with where we are.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Mamta Valechha, an analyst at Quilter Cheviot, said: 'Nike continues to slump, with its fourth quarter the worst in at least two decades.' She said the figures indicated Nike 'may nearly be at rock bottom', adding: 'It has been a difficult period for Nike following the pandemic, and the threat of tariffs simply is not helping the situation for the company.'
