Nike Vows Cuts to Reliance on China, Seeks ‘Surgical’ Price Increases

Shares of Nike Inc. surged more than 18 percent in the morning trading session of June 27 after the West Coast sporting goods giant surpassed Wall Street’s fourth-quarter and year-end expectations and announced plans to reduce dependence on Chinese factors and implement “surgical” price increases.

On June 26, the owner of the popular Jordan Brand reported earnings of $211 million, or $0.14 per share, for the fourth quarter of fiscal year 2025, which ended on May 31—beating analysts’ expectations by $0.02. Quarterly revenue declined 12 percent year over year, to $11.1 billion, but still surpassed analysts’ consensus of $10.69 billion, according to FactSet.

During the company’s conference call, Nike CEO Elliott Hill said the company’s results were in line with internal expectations, but “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 through our Win Now actions,” Hill said of Nike’s strategic plan to accelerate and revitalize the iconic sporting brand’s culture, brand, and product mix, while focusing on key markets.

During the call, Hill and Chief Financial Officer Matthew Friend explained how the company plans to reduce its longstanding ties to Chinese-made sporting wear and products. In his brief remarks, Hill stated that Nike is seeking a better balance with its wholesale partners worldwide, saying, “China will take longer due to the unique characteristics of the marketplace.”

“We’ve been operating in China for over four decades, and our teams know what is required to return to growth,” he added.

However, Friend, in his presentation to Nike investors and analysts, provided more details about the overhaul of Nike’s sourcing and supply chain operations, stating that tariffs present a new and significant cost headwind affecting the company’s financial results.

“We are taking actions that balance the consumer, our partners, our Win Now actions, as well as the long-term positioning of our brands in the marketplace,” he said.

As part of those actions, Friend said, Nike plans to diversify its sourcing and adjust its production locations across countries to offset the new cost pressures in the United States, especially from China, due to reciprocal tariffs imposed by the Trump administration.

“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, noting that China represents roughly 16 percent of the footwear Nike imports to the United States.

“We expect this to reduce to the high single-digit range by the end of fiscal 2026 with supply from China reallocated to other countries around the world.”

In addition, Friend said Nike is also working with suppliers and retail partners to reduce cost increases, thereby lessening the overall impact of these manufacturing and supply chain changes on consumers.

“These partner arrangements will come into effect at different times throughout fiscal 2026,” Friend said. “As part of our regular approach to seasonal planning, we have implemented a surgical price increase in the U.S. with phased implementation beginning later in 2025.”

As of 12:23 p.m. ET on June 27, Nike shares had risen by 18.09 percent. Despite the gains, the stock has fallen by more than 21 percent over the past 12 months as the sporting goods giant attempts to turn around disappointing sales and profits.