Nike faces $1.5 billion tariff challenges amid turnaround efforts

In September 2025, Nike reported a surprising rise in its first-quarter revenue, despite facing challenges in China and increased tariffs that pressured its margins. The company's first-quarter revenue increased by 1% to $11.72 billion, which surpassed analysts' expectations that had predicted a decrease. This revenue growth was attributed to the reduction of inventory levels and a return to growth in wholesale revenues. However, Nike's executives cautioned that the recovery of the brand, particularly in the Chinese market, would still take considerable time. Executives noted that sales in Greater China had declined for the fifth consecutive quarter, largely due to strong competition from local brands. To combat declining demand, Nike sent U.S. basketball stars LeBron James and Ja Morant to China as brand ambassadors in hopes of revitalizing interest in its products. CEO Elliott Hill emphasized that while there were signs of improvement, the company was still facing challenges in adjusting to a cautious consumer environment, tariff uncertainties, and a need for reorganization across various channels. Despite the encouraging news surrounding revenue, Hill acknowledged that there is substantial work ahead to achieve consistent growth in all markets. The projected tariffs on the brand's imported products are expected to reach $1.5 billion this fiscal year, a significant increase from earlier estimates. These tariffs stem from the duties imposed on imports produced in countries like Vietnam, where most of Nike's footwear is manufactured. As Nike navigates through these operational obstacles, the company's leadership remains focused on strategic investments in key sports categories such as running, to help the brand regain its footing in the international market.