Sportswear Giant Nike Warns Of US$1.5 Billion US Tariff Burden

SAN JOSE, California, Oct 1 (Bernama-dpa) -- US tariffs imposed by President Donald Trump are hitting Nike harder than expected, with the sportswear giant now forecasting an added cost of US$1.5 billion for the current fiscal year, reported German Press Agency (dpa). 

Three months ago, Nike had anticipated additional expenses of US$1 billion.

Tariffs on imports into the United States are affecting US companies as many goods are produced in Asia, a common practice in the sportswear sector.

It remains unclear how much of the added costs manufacturers and retailers will pass on to US consumers.

Nike is also recovering from a self-inflicted slump. The company had heavily prioritised direct-to-consumer sales at the expense of retail partners, allowing competitors to take shelf space in the crucial US market and hurting sales.

Additionally, the company focused more on fashion items, neglecting its sports lines.

Around a year ago, former executive Elliott Hill returned from retirement as chief executive to steer the company back on course.

Hill highlighted that three running shoe lines - Vomero, Structure and Pegasus - had been refreshed, pushing sales in the category up by more than 20 per cent.

For the first quarter ending in August, Nike's revenue rose one per cent year-on-year to US$11.7 billion, exceeding analyst expectations of US$11 billion.

Net profit, however, fell 31 per cent to US$727 million.

--BERNAMA-dpa