Nike said it would reduce its reliance on China for shoe production for the U.S. market to lessen the impact of U.S. tariffs.
The company also forecast a smaller-than-expected drop in first-quarter revenue, sending its shares up 11% in extended trading.
Chief Financial Officer Matthew Friend said about 16% of Nike’s U.S. imports currently come from China, which faces the largest tariff increases under President Donald Trump’s trade measures. Nike plans to lower that figure to the high single-digit range by the end of May 2026 by shifting production to other countries.
Friend said Nike will adjust its sourcing mix and consider corporate cost reductions to manage the added costs. The company has also raised prices on some products in the U.S. to help offset the impact.
Fourth-quarter sales dropped 12% to $11.10 billion, better than forecasts of a nearly 15% decline. Nike expects first-quarter revenue to fall by a mid-single-digit percentage, slightly less than the 7.3% drop analysts projected.
In the running category, Nike saw growth in the fourth quarter after a period of weakness. The company has focused on running products like the Pegasus and Vomero, while cutting back on older sneaker models such as the Air Force 1. Marketing spending rose 15% year-over-year.
Nike hosted an event Thursday where sponsored athlete Faith Kipyegon attempted to run a mile in under four minutes. Though she did not reach the goal, she set a new unofficial record in a live-streamed race from Paris.
China remains a weak spot for Nike. Executives said recovery in that market will take time due to difficult economic conditions and increased competition.
As of May 31, Nike’s inventory remained flat year-over-year at $7.5 billion.
