Nike said Tuesday that its quarterly profit had fallen 31 percent, to $727 million, despite a slight rise in revenue, as the footwear company plans to take a larger-than-expected hit from tariffs.
Nike said it expected tariffs to add $1.5 billion to costs for its fiscal year, up from its $1 billion estimate in the previous quarter. The company also said it expected revenue growth in the current quarter to be down to the low single digits.
The company, which is based in Beaverton, Ore., has spent the past year trying to stabilize its business under its chief executive, Elliott Hill. Since taking the helm a year ago, Mr. Hill has initiated a broad turnaround strategy aimed at reversing recent losses of market share.
And the footwear giant has made some progress. The company was bolstered by a 4 percent improvement in sales in North America, particularly in equipment, in the quarter that ended in August. The company’s spring orders were up year over year.
Still, Nike executives acknowledged that the company’s recovery would take a while to materialize.
“Progress will not be linear,” Nike’s finance chief, Matthew Friend, said in a statement. “While we navigate several external headwinds, our teams are focused on executing against what we can control.”
Inventories in the latest quarter fell 2 percent from a year earlier because of increased product costs and higher tariffs, the company noted. Revenue from the company’s Converse brand dropped 27 percent in the quarter, while revenue in the greater China region fell 9 percent because of underperforming seasonal sales.
Following the quarterly report, shares of Nike rose nearly 4 percent in after-hours trading.
When Nike announced its previous quarterly results in June, executives acknowledged that restructuring efforts had taken a short-term toll on financial performance. The company expressed optimism, however, that the decline in profit would ease in the coming quarters.
Nike also said Tuesday that its wholesale revenue had increased 7 percent in the latest quarter and that it expected wholesale revenue to return to modest growth for the fiscal year. The company has been trying to rebuild trust with wholesale partners and streamline its supply chain, both of which suffered amid prior strategic shifts.
Under Mr. Hill’s immediate predecessor as chief executive, John Donahoe, Nike reorganized teams based on consumer categories like men’s and women’s, rather than by sport. That change was meant to boost Nike’s lifestyle business, but critics argue that it caused the brand to lose its edge in core areas like running and training.
Mr. Hill has reversed course. In June, he announced that Nike would return to a sports-centric structure, and by late August, the company had begun realigning internal teams. As part of the overhaul, about 1 percent of the work force was cut, and most employees were reassigned by late September.
Another key part of Mr. Hill’s strategy is to expand Nike’s female customer base. Nike recently started a partnership with Kim Kardashian’s shapewear brand, Skims.
“All in all, we think Nike is making progress,” Neil Saunders, managing director at the consulting firm GlobalData, said in an email on Tuesday. “But there is a lot more work to be done in resetting the brand.”
Kailyn Rhone is a Times business reporter and the 2025 David Carr fellow.
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