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Nike Stages Comeback Amid Tariff Woes and Rising Competition
30 Jul
Summary
- Nike faces $1 billion in additional costs due to new tariffs
- Company plans to pass some costs to consumers through price hikes
- Analysts see evidence of a turnaround plan starting to pay off
In the past couple of years, Nike has been shifting between various direct-to-consumer strategies and facing rising competition from newcomers like On (Clouds) and Hoka. The company has also been sitting exposed to the upending of the global trading order.
However, Nike is now starting to stage a comeback. A month ago, during its fiscal 2025 earnings call, the company said it projects new tariffs will saddle it with $1 billion in additional costs this year. To offset these costs, Nike plans to pass some of them on to consumers through "surgical" price hikes, having already instituted a wave of price increases across its lines in May.
Despite these challenges, analysts see evidence that Nike's turnaround plan is starting to pay off. JPMorgan recently upgraded the company's stock, stating that they expect revenue growth to re-accelerate into the second half of 2026 and 2027, following several quarters of franchise product lifecycle management and inventory liquidation headwinds. This upgrade comes just weeks after a similar move by Goldman Sachs, indicating growing confidence in Nike's ability to navigate the post-pandemic landscape.
