"Nike's latest earnings told two stories at once. Revenue fell, yet profits still topped estimates, and the stock surged."
"Nike's revelation of a potential $1 billion tariff hit this year is a flashing red warning for the entire apparel and footwear sector."
"Brands are now paying the price for decades of supply chains optimised purely for cost."
"For a company still relying on Asia for the bulk of its manufacturing, the potential downside is non-trivial."
Following Nike's fiscal Q4 and full-year earnings report, the company's share price saw over a 10% increase despite revealing its lowest revenue since Q3 2022. Investors are optimistic about Nike's turnaround strategy, but the striking announcement of $1 billion additional costs from President Trump's tariffs highlights significant challenges. Analysts suggest this duality of performance will persist in global brands. A shift away from reliance on China for manufacturing is underway but presents hurdles. This situation underscores a cautionary tale for brands optimizing costs in volatile geopolitical climates.
Read at London Business News | Londonlovesbusiness.com
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