Dive Brief:
- Nike expects to incur $1.5 billion in tariff costs this year, up from its prior estimate of $1 billion, CFO Matthew Friend said Tuesday.
- The athletic footwear and apparel giant raised its estimate due to new reciprocal tariff rates that have taken effect since the last quarter, Friend said in an earnings call.
- “We are monitoring developments closely, and I remain confident in our ability to leverage our strengths, our scale and the deep experience of our leadership team to navigate through this disruption,” he said.
Dive Insight:
The higher-than-anticipated tariff costs were disclosed during the company’s fiscal 2026 Q1 earnings call.
The company generated $11.7 billion in revenues during the quarter, up 1% compared with the year-earlier period. Gross margin decreased 320 basis points to 42.2%, due to factors such as higher discounts in Nike stores and increased product costs, including new tariffs and “channel mix headwinds,” according to Friend.
Nike is among a number of U.S. companies that have incurred or projected financial losses from tariffs imposed by President Donald Trump.
In July, General Motors said tariffs cost the company $1.1 billion in the second quarter, with a projected financial impact of $4 billion to $5 billion by year’s end. During the same month, Stellantis reported a tariff-driven net loss of about $2.7 billion for the first half of 2025.
The term “tariff” or “tariffs” was mentioned on 361 earnings calls conducted by S&P 500 companies from June 15 through Sept. 12, according to a FactSet report.
While the figure reflects a quarter-over-quarter decline of 21%, it still reflects the second-highest number of S&P 500 earnings calls where the term “tariff” or “tariffs” was cited over the past decade, the report said.
