Nike (NKE) Q4 2025 earnings

Nike on Thursday said it expects sales and profit declines to moderate ahead, after the sneaker giant took its biggest financial hit yet from its turnaround plan during its fiscal fourth quarter.

While the worst could be behind the company, it has new challenges like tariffs to face, making a tough turnaround that much more difficult. On a call with analysts, finance chief Matt Friend called the duties a “new and meaningful” cost. 

“With the new tariff rates in place today, we estimate a gross incremental cost increase to Nike of approximately $1 billion” in its current fiscal year 2026, Friend said. 

He added that the company intends to “fully mitigate” that cost over time as it tweaks its supply chain, works with its factory and retail partners and implements price increases. 

Currently, about 16% of its supply chain is in China and it expects to reduce that to the high single digit percentage range by the end of its current fiscal year, which is expected to end next summer. 

“Despite the current elevated tariffs for Chinese products imported into the United States, manufacturing capacity and capability in China remains important to our global source base,” said Friend. 

Friend said the company will consider cost cuts but its highest priority remains stabilizing its business, which requires investment. 

Once those efforts are implemented, Friend said the financial impact to fiscal 2026 gross margin is expected to be 0.75 percentage points, with a greater impact expected in the first half.

While Wall Street’s expectations were low coming into the report, Nike beat estimates on the top and bottom lines.

Here’s how the company did for the three-month period ended May 31, compared with estimates from analysts polled by LSEG:

• Earnings per share: 14 cents per share vs. 13 cents estimated
• Revenue: $11.10 billion vs. $10.72 billion estimated

The company’s reported net income for the quarter was $211 million, or 14 cents per share, compared with $1.5 billion, or 99 cents per share, a year earlier. 

Sales dropped to $11.10 billion, down about 12% from $12.61 billion a year earlier.  

Last quarter, Nike warned that its fiscal fourth quarter would be the low point of its turnaround but in the months since, conditions worsened, leaving investors wondering if more pain was still to come.

In a press release, Friend confirmed that the fiscal fourth quarter will see the “largest financial impact” from its turnaround and headwinds are expected to moderate moving forward. 

On a call with analysts, CEO Elliott Hill said it’s time to “turn the page.”

“The results we’re reporting today in Q4 and in FY25 are not up to the Nike standard, but as we said 90 days ago, the work we’re doing to reposition the business through our ‘Win Now’ actions is having an impact,” said Hill. “From here, we expect our business results to improve.”

For the current quarter, Nike expects sales to decline by a mid-single digit percentage, in line with expectations of down 7%, according to…