Nike shares soared 10 percent in premarket trading on Friday, buoyed by an encouraging revenue forecast and strategic shifts aimed at mitigating the impact of U.S. tariffs. The sportswear giant is accelerating its move away from Chinese manufacturing for goods bound for the U.S. market, planning to reduce the percentage to a “high single-digit” range by May 2026, down from the current 16 percent of U.S.-bound shoes imported from China. This accelerated retreat comes as President Donald Trump’s sweeping tariffs threaten to add an estimated $1 billion to Nike’s costs.
While Nike reported its steepest sales decline in five years, its first-quarter revenue forecast proved better than analysts had feared, injecting confidence into its ongoing turnaround. Simon Jaeger, a portfolio manager at Flossbach von Storch, noted that despite a recent lack of profit and a 20 percent decline in China sales, markets are “pricing in what’s coming and not what has been in the results.”
Much of the renewed optimism stems from the recovery in Nike’s running segment, which had faced sluggish demand. New CEO Elliott Hill is credited with leading efforts to reclaim market share through fresh product launches, including investments in running shoe lines like Pegasus and Vomero. Hill’s strategy also involves clearing out older inventory, such as the Air Force 1 and Air Jordan 1, through targeted discounts. Looking ahead, the CEO aims to strengthen relationships with wholesale partners and expand Nike’s presence in more physical retail locations as part of the broader revamp. Analysts at Evercore ISI suggest that “longer-term investors can now start to rotate back into the stock as one of the biggest potential turnarounds in consumer.” The positive sentiment around Nike also spilled over to its peers, with shares of Adidas, Puma, and JD Sports seeing rises of 3% to 7%. Nike executives indicated they are nearly finished with inventory clearance, a development that is expected to ease competitive pressure on other sportswear brands that have been contending with Nike’s aggressive discounting. Despite Friday’s rally, Nike shares remain down 17.4 percent year-to-date.