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.
The Associated Press contributed reporting
