Nike’s stock surged more than 9% in premarket trading on Friday after the company reported better-than-expected results for its fiscal fourth quarter. CEO Elliott Hill said during the earnings call that the worst of the company’s turnaround efforts is likely over, and things are set to improve from here. “It’s time to turn the page,” Hill said.
Nike also revealed plans to move more of its manufacturing out of China and into the U.S. This move is aimed at avoiding potential extra costs from U.S. tariffs. CFO Matthew Friend warned that tariffs imposed under former President Trump could add about $1 billion to Nike’s costs. Currently, about 16% of Nike’s shoes sold in the U.S. are made in China, but the company aims to cut that to a high single-digit percentage by May 2026.
For the quarter, Nike’s sales dropped 12% to $11.1 billion, but still beat expectations. This was helped by a recovery in its running shoe business, which had been under pressure from strong competition. In North America, sales fell 11% to $4.7 billion, though the decline was not as bad as feared.
Nike’s profit margins fell to 40.3%, a drop of 4.4 percentage points, mainly due to bigger discounts and changes in where and how products were sold. Earnings per share for the quarter were $0.14.
Looking ahead, Nike expects the negative impact from its turnaround efforts to ease. It predicts first-quarter revenue will decline by a mid-single-digit percentage, which is better than analysts’ forecast of a 7.3% drop.