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New York Post
28-05-2025
- Business
- New York Post
Nike ‘quietly' raises prices on top-selling sneakers — but refuses to pin hikes on tariffs
Nike raised prices by as much as $10 on many of its best-selling sneakers – but the struggling sneaker giant refused to blame the spike on tariffs. The Beaverton, Ore.-based company – which produces most of its apparel and sneakers in China and Vietnam – hiked prices on its website by 2% to 6% on popular footwear including Air Max 270, Vomero 5 and Zoom Fly 6, according to a BMO Capital Markets price check released Wednesday. 'Nike has strategically and quietly raised prices on styles they believe can handle price increases,' BMO analyst Simeon Siegel told the Post. 4 Nike's top selling items are $5 to $10 more expensive because of tariffs, experts say. REUTERS 'It's reasonable to assume it's because of tariffs. The way the math works is that a 10% tariff can be offset by a 3% to 5% price increase.' The company, however, refused to attribute the unannounced hikes on President Trump's 10% tariff levied on Vietnam or the 30% tax on China. 'We regularly evaluate our business and make pricing adjustments as part of our seasonal planning,' the company said in a statement last week in response to reports that it would hike prices on June 1. The price increases come despite sagging sales for more than a year, leading the company to lure longtime Nike executive Elliott Hill out of retirement and name him CEO in October to spearhead a turnaround. Hill had spent three decades in various leadership roles before stepping away in 2020. In March, Nike reported a 9% sales decline during the all-crucial holiday season quarter, and forecast a steeper-than-expected drop in fourth-quarter revenue. 4 The Nike Zoom Fly sneaker is among those that cost up to $10 more today. isarescheewin – A source familiar with the company's strategy said Nike is not raising prices on children's products or on items less than $100. Most Nike sneakers that currently cost more than $150 will see increases of up to $10, while footwear priced below $150 will go up by $5, the source said. 'It's rare to see this broad of a price increase,' Siegel said. 4 Nike's price increases started on its web site and could expand to other retailers that sell its merchandise. AFP via Getty Images 4 Other major retailers have warned that they will be increasing prices soon because of tariffs on goods made abroad. REUTERS Some of the company's popular styles remain at their current prices, including the $115 Air Force 1 sneakers, which sell for $115 on the site, according to the BMO report. Apparel like the Indy Sports Bra, NBA jerseys and Sportswear windbreakers also avoided hikes, according to the report. Last week, Nike said it would return to selling its merchandise on Amazon for the first time since 2019 – a move that industry experts viewed as a Hail Mary because of its plummeting sales. Other major retailers, including Walmart, have warned that the levies will force them to raise prices — despite Trump's call for them to 'eat the tariffs.' On Wednesday, Macy's reported that it is cutting its full year profit outlook because of tariffs. The famed department chain also said it would raise prices on 'selective brands and categories.'
Yahoo
31-03-2025
- Business
- Yahoo
Nike Stock Is Down 62%. Is It a Buy?
Nike (NYSE: NKE) stock plummeted to new lows following its latest earnings update. This iconic sportswear brand has suffered declining sales over the last year, which has sent the stock down 62% from its previous peak. The steady fall in the share price over the last three years might have shareholders wondering if Nike will ever return to its former glory. While sales are expected to remain soft in the near term, the stock's valuation may undervalue Nike's long-term growth potential. It seemed the stock was in the process of bottoming out when Elliott Hill, who worked at Nike for over 30 years, was hired as CEO in October. However, investors can't expect the stock to rebound in a year when analysts expect Nike's sales to be down 10% for its May-ending fiscal year. Demand for Nike's products continues to look very soft. Last quarter, revenue fell 7% year over year on a constant-currency basis. Both wholesale and Nike Direct revenues were down. These declines come as rival brands, including Lululemon Athletica and On Holding, are still growing. Still, investors shouldn't associate recent sales weakness with a decline in Nike's brand power. People have a tendency to gravitate to the most ubiquitous brands, as noted by Nike's trailing-12-month revenue of $47 billion. It's a gigantic business in the sportswear industry with valuable relationships with sports apparel retailers. The recent earnings report revealed encouraging signs for Nike's comeback. One of the initiatives that Hill is implementing is to reset its approach on streetwear products like the Air Force 1 and Air Max franchises and focus more on core products that can drive more predictable sales. On this front, running shoes posted a sales increase last quarter, with strong demand for the Vomero 5 and Pegasus 41. Running goes back to Nike's roots in the early years of its growth, so healthy demand here is a positive indicator for the future. Nike is also pushing the envelope in apparel. Hill noted that its new 24.7 collection exceeded expectations, and the company is investing to expand capacity to meet demand. "We're moving with focus and urgency to get back into a rhythm of delivering across all dimensions," Hill said during the fiscal Q3 earnings call. Hill is putting Nike back on offense in terms of innovation and bringing fresh perspectives to its product strategy that can drive industry-leading growth again. The recent $65 share price is the lowest Nike has traded in more than five years. The stock's valuation still looks rich, with the forward price-to-earnings (P/E) ratio currently sitting at 31 based on Wall Street's consensus fiscal 2025 earnings estimate. Nike's average P/E over the last 20 years is 29, and it traded as low as 11 times earnings in the wake of the 2008 bear market. However, investors can get a better perspective on the value in the shares by looking ahead to Nike's earnings potential as management improves sales and reduces costs. If Nike returns to its previous peak profit margin of around 12%, this could translate to around $3.80 of earnings per share on $47 billion of annual revenue. That brings the P/E down to 17. Indeed, analysts expect Nike's earnings to reach $3.67 by fiscal 2027. With the stock also offering an above-average forward dividend yield of 2.46%, investors could see attractive returns from current share prices. Before you buy stock in Nike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $672,177!* Now, it's worth noting Stock Advisor's total average return is 815% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 24, 2025 John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica and Nike. The Motley Fool recommends On Holding. The Motley Fool has a disclosure policy. Nike Stock Is Down 62%. Is It a Buy? was originally published by The Motley Fool Sign in to access your portfolio
