Nike Forecasts Plunging Sales Amid Tariffs, Weakening Consumer Confidence

Nike has warned that sales will drop by a double-digit percentage in its current quarter as the sneaker giant contends with new tariffs, sliding consumer confidence, and a slower-than-expected turnaround. In a conference call with analysts, finance chief Matt Friend said Nike expects its sales decline in the fiscal fourth quarter, which is set to end in May, to be at the “low end” of the “mid-teens range.” It also anticipates its gross margin will fall between 4 and 5 percentage points as it ramps up efforts to liquidate excess inventory and stale styles that are no longer resonating with consumers — a process it expects to continue into fiscal 2026.

Total Retail's Take: Economics headwinds, highlighted by import tariffs (nearly a quarter of Nike's manufacturers and suppliers are located in China) and declining consumer confidence, are taking a toll on Nike's turnaround efforts. The athletic brand's CEO, Elliott Hill, who left Nike in 2020 and returned last year, is focused on several core areas as he looks to turn around the business, including re-establishing relationships with wholesale partners (think Foot Locker, for example), reigniting innovation in its product lines, and wooing back athletes that have fled to new competitors.

While the news is gloomy at the moment, Nike is widely expected to reclaim the market share it lost and reset its business, and some insiders say the company’s problems have been overblown. Yet the current tariffs and economic fears could mean that Nike's turnaround could take longer, and be more difficult, than expected. And patience isn't a virtue that many investors possess.