Nike warns Trump tariffs could cost it nearly $1 billion
27 June 2025 14:27
London (PA Media/dpa) Sportswear giant Nike has warned that US President Donald Trump's trade tariffs could cost it around an extra $1 billion.The group said it was taking action to offset the hit, having recently warned it would raise prices on some trainers and clothing in the US to counter rising tariffs. It currently makes around 16% of its footwear in China, which is then imported into the US, but is looking to reduce this to a "high single-digit range" by the end of the current financial year. Supply would be "reallocated to other countries around the world."Matt Friend, Nike's chief financial officer, said: "These tariffs represent a new and meaningful cost headwind." He said the cost impact would be about $1 billion if tariffs remain at current levels.Friend added: "We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States, despite the current elevated tariffs for Chinese products imported into the United States. He also said the group was looking to "minimize the overall impact to the consumer," although it confirmed it would start pushing through price hikes in the US starting from the autumn.Corporate costs could also be cut under plans to offset the expected cost hit.The comments came as Nike reported its worst quarterly earnings in more than three years, although the out-turn was better than feared on Wall Street, helping its US-listed shares lift overnight on Thursday.Chief executive Elliott Hill, who returned from retirement last year to take the helm, is leading a turnaround at the group. He said the group's results showing a 12% drop in fourth quarter revenues to $11.1 billion were "not where we want them to be." "As we enter a new fiscal year, we are turning the page and the next step is aligning our teams to lead with sport through what we are calling the sport offence," he said.
Friend also said the sales decline "reflected the largest financial impact" of its revamp, adding "we expect the headwinds to moderate from here."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Etihad
22 minutes ago
- Al Etihad
S&P 500 hits record, erasing losses from Trump tariff blitz
27 June 2025 18:44 New York (AFP)The S&P 500 hit a record on Friday morning, rebounding from a market rout triggered by President Donald Trump's sweeping gains, which came as US and Chinese representatives confirmed progress towards a trade deal, restored the S&P 500 back into its heights from before Trump's "Liberation Day" tariff announcements set off a wave of volatility in early 1415 GMT, the broad-based S&P 500 stood at 6,177.02, up 0.6%, an intraday Dow Jones Industrial Average rose 0.7% to 43,707.66, while the tech-rich Nasdaq Composite Index climbed 0.6% to 20, Friday, China confirmed details of a framework agreement with the United States, saying Washington would lift "restrictive measures" while Beijing would "review and approve" items under export announcement follows earlier rounds of negotiations between the two sides in Geneva and London. Beijing had emerged as the White House's biggest target following Trump's early April announcement, which initially set Washington on course to radically scale back global has since suspended the most onerous elements of his trade overhaul, while still implementing the biggest US tariffs imposed in tariffs have focused attention on the risk that US inflation could pick up personal consumption expenditures price index climbed 2.3 percent last month from a year ago, according to data released Friday. This was in line with analyst expectations and a slight acceleration from April's 2.2 percent increase. Federal Reserve Chairman Jerome Powell has said the central bank can afford to monitor inflation before changing monetary policy, rebuffing Trump who has insistently called for interest rate cuts. Stock Markets Continue full coverage
Zawya
2 hours ago
- Zawya
US consumer spending falls unexpectedly in May
U.S. consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of tariffs faded, while monthly inflation increases remained moderate. Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department's Bureau of Economic Analysis said on Friday. Economists polled by Reuters had forecast consumer spending would edge up 0.1%. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture. Economists warned it could take time for the tariff-related distortions to wash out of the data. A record goods trade deficit in the first quarter, thanks to a deluge of imports, accounted for much of the 0.5% annualized rate of decline in gross domestic product during that period. Consumer spending also nearly braked last quarter after being propelled by households pulling forward goods purchases. Households also spent less on services last quarter, helping to restrain growth in consumer spending to only a 0.5% pace, the slowest rate since the second quarter of 2020. That data potentially puts spending on a slow growth path in the second quarter. The combination of soft consumer spending and inflation is, however, unlikely to spur the Federal Reserve to resume cutting interest rates in July. Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank needed more time to gauge the impact of tariffs on prices before considering a rate cut. Economists argue that price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. The Personal Consumption Expenditures (PCE) Price Index gained 0.1% in May, matching the rise in April, the BEA said. In the 12 months through May, PCE inflation increased 2.3% after climbing 2.2% in April. Stripping out the volatile food and energy components, the PCE Price Index increased 0.2% last month. That followed a 0.1% rise in the so-called core PCE inflation in April. In the 12 months through April, core inflation advanced 2.7% after rising 2.6% in April. The Fed tracks the PCE price measures for its 2% inflation target. The central bank last week left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. (Reporting by Lucia Mutikani; Editing by Paul Simao)
Zawya
2 hours ago
- Zawya
UAE fund buys $100mln of Trump's World Liberty tokens
A United Arab Emirates-based fund has bought $100 million worth of digital tokens issued by World Liberty Financial, the crypto venture of U.S. President Donald Trump's family, becoming its largest publicly known investor. Aqua 1 Foundation said in a statement on Thursday its purchase of the tokens, known as $WLFI, sought to speed up the creation of a "blockchain-powered financial ecosystem" with stablecoins and tokenised traditional assets at its heart. A spokesperson for World Liberty confirmed the investment to Reuters. A so-called governance token, $WLFI cannot be traded but gives holders the right to vote on changes to the business' underlying code. World Liberty said this week it was "working behind the scenes" to make the token transferable. "WLFI and Aqua 1 will jointly identify and nurture high-potential blockchain projects together," Aqua 1 founding partner Dave Lee said in the statement. The fund's investment and compliance teams would help World Liberty expand in South America, Europe and Asia, it added. Despite its investment, Aqua 1 maintains a minimal online presence. Its X account has only three posts and approximately 1,120 followers while its website was created on May 28, according to data from two web domain trackers. World Liberty also plans to support the launch of a separate Aqua 1 fund aimed at boosting the "digital economy transformation" in the Middle East through blockchain and artificial intelligence, the statement said. Aqua 1 did not immediately respond to a request for comment, and the World Liberty spokesperson had no further immediate comment. Launched two months before the 2024 U.S. presidential election by Trump and his business partners, World Liberty has yielded hundreds of millions of dollars in revenue for the Republican president's family business. World Liberty has drawn criticism from Democratic lawmakers and government ethics watchdogs over potential conflicts of interest. The Trump Organization has said the president's investments, assets and business interests are held in a trust managed by his children. World Liberty aims to open access to financial services via digital tokens, without intermediaries such as banks. It has launched a stablecoin called USD1 that was bolstered in May when an Abu Dhabi investment firm chose it for a $2 billion investment in giant crypto exchange Binance. (Reporting by Tom Wilson in London; Editing by Frances Kerry and Louise Heavens)
