Key Takeaways

  • Nike expects to incur $1.5 billion in tariff costs this year, up from its previous estimate of $1 billion, Chief Financial Officer Matthew Friend said on Tuesday.
  • The sportswear giant raised its estimate due to new reciprocal tariff rates that took effect since the last quarter, Friend explained during the earnings call.
  • "We are closely monitoring developments and remain confident in our ability to navigate this disruption by leveraging our strengths, scale, and the deep experience of our leadership team," he said.

Deeper Dive

The higher-than-expected tariff costs were disclosed during the company's fiscal 2026 first-quarter earnings call.

The company posted quarterly revenue of $11.7 billion, up 1% year over year. Gross margin fell 320 basis points to 42.2%, Friend said, citing factors including deeper discounts at Nike stores, higher product costs (including new tariffs), and "channel mix headwinds."

Nike is one of many companies that have incurred or expect to incur financial losses due to tariffs imposed by President Donald Trump.

In July, General Motors said tariffs cost the company $1.1 billion in the second quarter and expected the financial impact to reach $4 billion to $5 billion by year-end. That same month, Stellantis reported a net loss of approximately $2.7 billion in the first half of 2025 due to tariffs.

According to a FactSet report, "tariffs" was mentioned in 361 earnings calls of S&P 500 companies from June 15 to September 12.

Although that figure is down 21% quarter over quarter, the report said it still marks the second-highest level of "tariff" mentions in S&P 500 earnings calls over the past decade.