NKE: Nike Stock Just Did It — Up 12% Even as Revenue Ran Out of Breath. Thank the Earnings Call.

Sportswear giant said it expects a $1 billion hit from tariffs on Chinese goods — short-term pain, but long-term gain? That’s what investors chose to take away from the earnings call.

🏃 Nike Shares Sprint 12% Higher

• Nike stock NKE laced up a 12% rally ahead of the opening bell on Friday. An initially shaky earnings release, which sank the shares, turned into a bullish sprint during the company’s conference call. The sneaker maker posted earnings per share of 14 cents, just ahead of estimates, though sales fell 12% to $11.1 billion.
• Net income dropped sharply to $211 million, down from $1.5 billion a year ago — a whopping 86% slide — as Nike burned through excess inventory and reignited wholesale partnerships.
• But investors chose to focus on forward guidance instead of past (and current) missteps. CEO Elliott Hill tried to assuage shareholders that Nike’s turnaround game plan is gaining traction: “From here, we expect our business results to improve.”
• “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.

🏀 Tariffs Slam the Court — But Nike’s Still in the Game

• Nike expects to take a $1 billion hit from new tariffs on Chinese goods in fiscal 2026. About 16% of its supply chain currently runs through China, but that’s expected to drop to the high single digits by next summer.
• The supply chain shake-up is part of Nike’s ‘Win Now’ strategy — a bold pivot to build long-term resilience and reduce exposure to geopolitical headwinds.
• CFO Matt Friend noted the cost hit but emphasized that the moves are about “creating a more flexible and durable sourcing model” over time.
• The tariffs have been a pain point for Nike since last quarter when Trump threatened lofty hikes on Vietnam goods, prompting Nike to re-evaluate its import process.

👟 Turnaround Isn’t Pretty — But It’s Moving

• Revenue may be trailing, but Nike insists it's mid-marathon, not sprinting to the finish. CEO Hill admitted the short-term speed bumps, but stayed focused on future performance, saying it’s time to “turn the page.”
• Nike’s plan includes clearing stale stock, revitalizing retail relationships, and focusing on premium product lines — a necessary reset to get back to winning form.
• The message from the call? Short-term pain for long-term gain. And judging by the stock reaction, Wall Street is giving the swoosh the benefit of the doubt — for now, at least.