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Business of Fashion
3 hours ago
- Business
- Business of Fashion
Nike Fourth-Quarter Sales Fall by Less Than Expected
Nike said it would cut its reliance on production in China to mitigate the impact from US tariffs on imports, and forecast a smaller-than-expected drop in first-quarter revenue, sending its shares up 11 percent in extended trading. US President Donald Trump's sweeping tariffs on imports from key trading partners could add around $1 billion to Nike's costs, company executives said on a post-earnings call after the sportswear giant topped estimates for fourth-quarter results. China, subject to the biggest tariff increases imposed by Trump, accounts for about 16 percent of the shoes Nike imports into the United States, chief financial officer Matthew Friend said. But the company aims to cut the figure to a 'high single-digit percentage range' by the end of May 2026 as it shifts production to other countries. Consumer goods is one of the most affected areas by the tariff dispute between the world's two largest economies, but Nike's executives said they were focused on cutting the financial pain. Nike will 'evaluate' corporate cost reductions to deal with the tariff impact, Friend said. The company has already announced price increases for some products in the U.S. 'The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share in the US,' said David Swartz, analyst at Morningstar Research. Running Finds Its Footing Chief executive Elliott Hill's strategy to focus product innovation and marketing around sports is beginning to show some fruit with the running category returning to growth in the fourth quarter after several quarters of weakness. Having lost share in the fast-growing running market, Nike has invested heavily in running shoes such as Pegasus and Vomero, while scaling back production of sneakers such as the Air Force 1. 'Running has performed especially strongly for Nike,' said Citi analyst Monique Pollard, adding that new running shoes and sportswear products are expected to offset the declines in Nike's classic sneaker franchises at wholesale partner stores. Marketing spending was up 15 percent year-on-year in the quarter. On Thursday, Nike hosted an event in which its sponsored athlete Faith Kipyegon attempted to run a mile in under four minutes. Paced by other star athletes in the glitzy and live-streamed from a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. Nike forecast first-quarter revenue to fall in the mid-single digits, slightly better than analysts' expectations of a 7.3 percent drop, according to data compiled by LSEG. Its fourth-quarter sales fell 12 percent to $11.10 billion, but still beat estimates of a 14.9 percent drop to $10.72 billion. China continued to be a pain point, with executives saying a turnaround in the country will take time as Nike contends with tougher economic conditions and competition. The company's inventory was flat year-over-year at $7.5 billion as of May 31. By Helen Reid and Juveria Tabassum. Reporting by Juveria Tabassum in Bengaluru; Editing by Shinjini Ganguli and Alan Barona. Learn more: Is Nike Finally Winning With Women? With the bold marketing like the 'So Win' campaign, a revamped leadership team under new brand president Amy Montagne and star power from A'ja Wilson, Nike's long-promised women's push is starting to stick.
Reuters
5 hours ago
- Business
- Reuters
Nigeria's Dangote aims to end Africa's fertiliser imports
LAGOS, June 27 (Reuters) - Africa will be self-sufficient in fertiliser within 40 months, Nigerian billionaire Aliko Dangote said on Friday, on the basis of a planned expansion of his $2.5 billion plant on the outskirts of Lagos. Africa currently imports over 6 million metric tons of fertiliser annually as it struggles to produce enough food in often challenging growing conditions. The benefits of increasing domestic production would include reduced foreign exchange expenditure, which has been a major economic burden in Nigeria because of the weakness of the local currency. "In the next 40 months, Africa will not import fertiliser from anywhere. We have a very aggressive trajectory right now. We want to put Dangote to be the highest producer of urea, bigger and higher than Qatar - give me 40 months," Dangote said at the annual Afreximbank meeting in Abuja. Dangote runs Africa's largest granulated urea complex, which has annual capacity of 3 million tons, 37% of which it exports to the United States. It will need to double current output to achieve his ambition. Dangote has said he is not worried about the impact of Trump tariffs. Analysts say the market outlook for fertiliser is bullish, but there are also challenges and the kind of expansion Dangote seeks requires infrastructure to be built. "Any new fertiliser plant or expansion project faces cost overrun risks to the producer," Seth Goldstein, senior equity analyst at Morningstar Research, said. Mikolah Judson, an analyst at global risk consultancy, Control Risk, cited the need for "transport infrastructure and port capacity," saying "bottlenecks routinely delay various import and export projects in Nigeria". Dangote has a track record for delivering big projects. He also owns the Dangote Petroleum Refinery, Africa's largest, although its launch was repeatedly delayed and it exceeded its initial budget. He has said he intends to list the 650,000 barrels-per-day refinery next year and on Friday he also confirmed plans to list his fertiliser plant on the local stock exchange this year.
The Sun
9 hours ago
- Business
- The Sun
Nike to cut China output for US market to ease tariff blow
BENGALURU: Nike said it would cut its reliance on production in China for the US market to mitigate the impact from US tariffs on imports, and forecast a smaller-than-expected drop in first-quarter revenue, sending its shares up 11% in extended trading. US President Donald Trump's sweeping tariffs on imports from key trading partners could add around US$1 billion (RM4.2 billion) to Nike's costs, company executives said on a post-earnings call after the sportswear giant topped estimates for fourth-quarter results. China, subject to the biggest tariff increases imposed by Trump, accounts for about 16% of the shoes Nike imports into the US, chief financial officer Matthew Friend said. But the company aims to cut the figure to a 'high single-digit percentage range' by the end of May 2026 as it reallocates China production to other countries. 'We will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the US,' he said on a call with investors. Consumer goods is one of the most affected areas by the tariff dispute between the world's two largest economies, but Nike's executives said they were focused on cutting the financial pain. Nike will 'evaluate' corporate cost reductions to deal with the tariff impact, Friend said. The company has already announced price increases for some products in the US 'The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share in the US,' said David Swartz, analyst at Morningstar Research. CEO Elliott Hill's strategy to focus product innovation and marketing around sports is beginning to show some fruit with the running category returning to growth in the fourth quarter after several quarters of weakness. Having lost share in the fast-growing running market, Nike has invested heavily in running shoes such as Pegasus and Vomero, while scaling back production of sneakers such as the Air Force 1. 'Running has performed especially strongly for Nike,' said Citi analyst Monique Pollard, adding that new running shoes and sportswear products are expected to offset the declines in Nike's classic sneaker franchises at wholesale partner stores. Marketing spending was up 15% year-on-year in the quarter. On Thursday, Nike hosted an event in which its sponsored athlete Faith Kipyegon attempted to run a mile in under four minutes. Paced by other star athletes in the glitzy and live-streamed from a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. – Reuters
New Straits Times
16 hours ago
- Business
- New Straits Times
Nike plans to reduce reliance on China production for US market to soften tariff blow
NEW YORK: Nike said it would cut its reliance on production in China for the US market to mitigate the impact from US tariffs on imports, and forecast a smaller-than-expected drop in first-quarter revenue, sending its shares up 11 per cent in extended trading. US President Donald Trump's sweeping tariffs on imports from key trading partners could add around US$1 billion to Nike's costs, company executives said on a post-earnings call after the sportswear giant topped estimates for fourth-quarter results. China, subject to the biggest tariff increases imposed by Trump, accounts for about 16 per cent of the shoes Nike imports into the United States, Chief Financial Officer Matthew Friend said. But the company aims to cut the figure to a "high single-digit percentage range" by the end of May 2026 as it reallocates China production to other countries. "We will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States," he said on a call with investors. Consumer goods is one of the most affected areas by the tariff dispute between the world's two largest economies, but Nike's executives said they were focused on cutting the financial pain. Nike will "evaluate" corporate cost reductions to deal with the tariff impact, Friend said. The company has already announced price increases for some products in the US. "The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share in the US.," said David Swartz, analyst at Morningstar Research. RUNNING FINDS ITS FOOTING CEO Elliott Hill's strategy to focus product innovation and marketing around sports is beginning to show some fruit with the running category returning to growth in the fourth quarter after several quarters of weakness. Having lost share in the fast-growing running market, Nike has invested heavily in running shoes such as Pegasus and Vomero, while scaling back production of sneakers such as the Air Force 1. "Running has performed especially strongly for Nike," said Citi analyst Monique Pollard, adding that new running shoes and sportswear products are expected to offset the declines in Nike's classic sneaker franchises at wholesale partner stores. Marketing spending was up 15 per cent year-on-year in the quarter. On Thursday, Nike hosted an event in which its sponsored athlete Faith Kipyegon attempted to run a mile in under four minutes. Paced by other star athletes in the glitzy and live-streamed from a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. Nike forecast first-quarter revenue to fall in the mid-single digits, slightly better than analysts' expectations of a 7.3 per cent drop, according to data compiled by LSEG. Its fourth-quarter sales fell 12 per cent to US$11.10 billion, but still beat estimates of a 14.9 per cent drop to US$10.72 billion. China continued to be a pain point, with executives saying a turnaround in the country will take time as Nike contends with tougher economic conditions and competition. The company's inventory was flat year-over-year at US$7.5 billion as of May 31.
New York Post
20 hours ago
- Business
- New York Post
Nike warns of whopping $1B hit from tariffs — but shares jump
Nike said Thursday it would cut its reliance on production in China to mitigate the impact from US tariffs on imports, and forecast a smaller drop in first-quarter revenue than expected by analysts, sending its shares up 11% in extended trading. President Trump's sweeping tariffs on key trading partners could add around $1 billion to Nike's costs, company executives said on a post-earnings call after the sportswear giant topped estimates for fourth-quarter results. Consumer goods is one of the areas most affected by the tariff dispute between the world's two largest economies, but the executives said they were focused on cutting the financial pain. 4 Nike reported a smaller-than-expected drop in fourth-quarter revenue and beat profit estimates. REUTERS China, subject to the biggest tariff increases imposed by Trump, accounts for about 16% of the shoes Nike imports into the United States, chief financial officer Matthew Friend said. But the company aims to cut the figure to a 'high single-digit percentage range' by end-May 2026 by shifting production to other countries. 'We will optimize our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States,' said Friend. Nike will also 'evaluate' corporate cost reductions to deal with the tariff impact, Friend said. Nike has also already announced price increases to partly mitigate the impact of tariffs. 'The tariff impact is significant. However, I expect others in the sportswear industry will also raise prices, so Nike may not lose much share in the US,' said David Swartz, analyst at Morningstar Research. 4 New CEO Elliott Hill is focusing on product innovation and marketing around sports. AP Nike forecast first-quarter revenue to fall in the mid-single digits, slightly better than estimates of a 7.3% drop, as CEO Elliott Hill's strategy to focus product innovation and marketing around sports begins to pay off. The running category returned to growth in the fourth quarter, Friend said. Having lost share in the fast-growing market, Nike has invested heavily in running shoes such as Pegasus and Vomero, while scaling back production of sneakers such as the Air Force 1. 4 China, subject to the biggest tariff increases imposed by Trump, accounts for about 16% of the shoes Nike imports into the US. Getty Images Under Hill, who joined in October last year, Nike is investing more into marketing focused on sports, with marketing spending up 15% year-on-year in the quarter. On Thursday, it hosted an attempt by sponsored athlete Faith Kipyegon to run a mile in under four minutes. Paced by other star athletes in the glitzy, live-streamed event in a Paris stadium, Kipyegon fell short of the goal but set a new unofficial record. 4 On Thursday, Nike hosted an attempt by sponsored athlete Faith Kipyegon to run a mile in under four minutes. AP Nike's fourth-quarter sales fell 12% to $11.10 billion, compared with analysts' expectation of a 14.9% drop to $10.72 billion, according to data compiled by LSEG. China continued to be a pain point, with executives saying a turnaround in the country will take time as Nike contends with tougher economic conditions and competition. The company's inventory was flat as of May 31, compared with a year ago, at $7.5 billion.
