At the end of May 2025, US sportswear company Nike ended its financial year with very poor results as the industry continues to operate amid geopolitical instability and tariff uncertainty.

Its full-year revenue fell 10% to $46.3 billion. Its net profit was $3.2 billion, down 44% from the previous fiscal year ended May 2024, Euronews reported.

The latest quarter showed no better results; revenue fell 12% to $11.1 billion and net profit plunged 86% year-on-year to $211 million.

"Nike continues to slump, with its fourth quarter the worst in at least two decades," said Mamta Valeha, consumer products analyst at Quilter Cheviot. "Sales were down 12% and operating margin was just 2.9%. Sales themselves actually outpaced really low expectations, which led to revenue outperformance."

"The results we are reporting today in the fourth quarter and in our 25th fiscal year are not up to Nike's standard," CEO Elliott Hill said in announcing the latest results. He added that the company is working hard to reposition itself. 

The strategy involves reducing production in China, as US imports from the Asian country are currently subject to 55% tariffs, according to the two countries' framework agreement announced earlier in June.

"China currently accounts for about 16% of the footwear we import into the U.S., and we expect that share to decline to the single-digit range by the end of FY26 as shipments from China are redistributed to other countries around the world," the CEO said.

On June 27, China's Ministry of Commerce said that Washington and Beijing had signed a trade agreement, although details had not yet been announced at the time of writing.

On June 26, Nike said it expects the tariffs to result in about $1 billion in additional costs in the current fiscal year.

In terms of results, the company expects both sales and margins to continue to decline in the current quarter, but at a slower pace.

"We expect first-quarter revenue to decline by mid-single digits," Hill said. "We expect gross margin for the first quarter to be down about 350-425 basis points. This includes approximately 100 basis points of negative impact due to the new rates, based on the rates in effect today." | BGNES