Nike Shares Surge Over 15% on Q4 Earnings Beat Amid $1B Tariff Headwind

Nike's stock surged over 15% following its fourth-quarter earnings report, which exceeded Wall Street expectations despite a 12% revenue decline and an 86% drop in net income largely due to $1 billion in tariff-related costs. CEO Elliott Hill emphasized that while the results are below Nike's standards, the company is optimistic about its turnaround strategy, which includes shifting production away from China to mitigate tariff impacts and focusing on multi-channel sales and digital growth. CFO Matthew Friend expects tariff costs to be fully offset over the next fiscal year through price increases, reduced corporate costs, and supply chain diversification, reducing U.S. imports from China to single digits. Despite continued margin pressure and anticipated revenue declines into fiscal 2026, Nike aims to benefit from inventory liquidation and a reset of its product portfolio and distribution strategy. Investors reacted positively to the company's strategic adjustments and trade developments, with analysts viewing the quarter as a turning point toward a potential V-shaped recovery. This optimism persisted amid broader market gains, including record highs in major indices driven by favorable U.S.-China trade developments.