NKE Defies Gravity: Nike Stock Soars 15% Post-Q4 Despite Tariff Storm Clouds

Wall Street's playing hopscotch with logic again—Nike just moonwalked past a weak earnings report straight into a 15% rally. Tariffs? What tariffs?

The Swoosh Effect: When bad news becomes rocket fuel

Analysts expected blood in the water after Q4 numbers landed. Instead, they got a masterclass in how meme-stock energy infects even blue chips. The 15% surge smells suspiciously like hedge funds chasing momentum while whispering 'supply chain improvements' through gritted teeth.

Tariff Tango: Dancing with the devil

Those looming import costs should've been an anchor. Yet here we are—another case of 'buy first, ask rational questions later.' Classic Wall Street: pricing in hypothetical efficiency gains before the first shipping container gets inspected.

Closer: At this rate, maybe Nike should accept tariffs in Bitcoin. Wouldn't be the dumbest financial innovation we've seen this decade.

TLDR

• Nike stock rises 15.7% to $72.36 despite Q4 revenue falling 12% to $11.1B

• Q4 EPS hit $0.14, down 86% YoY but slightly above expectations

• Full-year revenue down 10% to $46.3B, net income at $3.2B

• Nike warns of $1B tariff hit, shifting production from China to avoid costs

• CEO launches “sport offense” plan to revitalize growth after disappointing FY25

Shares of NIKE, Inc. (NYSE: NKE) surged 15.7% to $72.36 after the company reported mixed fiscal 2025 fourth-quarter and full-year results.

NIKE, Inc. (NKE)

While both quarterly revenue and profit dropped sharply year-over-year, they slightly exceeded Wall Street’s lowered expectations. The company also laid out a clear strategy to counter mounting cost pressures, including $1 billion in expected tariff costs.

Q4 and Full-Year Financials Show Declines

For the quarter ended May 31, Nike posted $11.1 billion in revenue, a 12% decline year-over-year. Gross margin fell by 440 basis points to 40.3%, largely due to higher discounts and a shift in sales channels. Net income for the quarter fell to $0.2 billion, with diluted earnings per share down 86% to $0.14.

For the full fiscal year, revenue was $46.3 billion, down 10% from the prior year. Net income came in at $3.2 billion, a 44% drop from fiscal 2024. EPS for the year was $2.16, down 42%.

Nike Direct revenue, including online and owned-store sales, was hit particularly hard, dropping 14% in Q4. Digital sales declined by 26%, while in-store sales showed a slight 2% rise. Wholesale revenue was also down 9% in the quarter.

NIKE $NKE JUST REPORTED EARNINGS:

– EPS of $0.14 beating expectations of $0.12 ✅
– Sales of $11.1B beating expectations of $10.7B ✅

A double beat for the apparel giant, good quarter! pic.twitter.com/qwVLZS8PiK

— Dividend Dude (@DividendDude_X) June 26, 2025

Tariff Headwinds and Supply Chain Shift

Nike is forecasting roughly $1 billion in tariff-related costs due to recent trade policy changes under the TRUMP administration. CFO Matthew Friend said the impact would shave about 100 basis points off gross margins in the upcoming quarter.

To mitigate these costs, Nike is accelerating efforts to reduce its reliance on Chinese manufacturing. The company said China accounted for 16% of its U.S. footwear imports and aims to lower that to the high single digits by fiscal 2026. Nike has been diversifying its sourcing since 2016 when China made up 29% of its footwear production.

CEO and CFO Double Down on Strategic Reset

CEO Elliott Hill emphasized the company’s commitment to its “Win Now” strategy, which he said will be enhanced by a new “sport offense” approach. This includes focusing on sport-driven product innovation, stronger storytelling, and expanding wholesale partnerships.

CFO Matthew Friend noted the company will implement “surgical” price increases in the U.S. starting this fall to protect margins and maintain competitiveness.

Shareholder Returns and Brand Momentum

Nike returned $5.3 billion to shareholders during fiscal 2025 through $2.3 billion in dividends and $3.0 billion in share repurchases. The company has now repurchased $12 billion of the approved $18 billion repurchase program.

While Nike faces near-term macroeconomic and trade challenges, its efforts to reposition through supply chain diversification and retail strategy could lay the foundation for long-term growth.