By Julia Waldow  •  July 2, 2026  •

Ivy Liu

On Tuesday, Nike shared that its growth margin for its fiscal fourth quarter of 2026 increased 890 basis points to 49.2%, “primarily due to the expected recovery of the IEEPA tariffs.” The company added that its North America business expects to recover $965 million in tariff refunds from the U.S. government, while its Converse business expects to recover $21 million.

For its fiscal year ending May 31, Nike already received approximately $300 million in cash “from IEEPA tariff recoveries.”

Nike was able to submit a request for a tariff refund this spring after the U.S. Supreme Court ruled in February that Donald Trump’s administration illegally collected tariffs under IEEPA. The U.S. government could owe businesses and brokers up to $175 billion in refunds, including interest. Refunds are starting to trickle in now, although the process could take weeks or months, brand executives and tariff advisers told Modern Retail.

In September, Nike said it expected $1.5 billion in gross incremental costs, on an annualized basis, from tariffs. That figure was a 50% increase from Nike’s prior estimate, provided in June 2025, of $1 billion. 

In May, consumers filed a class-action lawsuit against Nike, seeking to recoup extra costs they paid because of tariffs. “Unless restrained by this court, Nike stands to recover the same tariff payments twice — once from consumers through higher prices and again from the federal government through tariff refunds,” the complaint reads. However, as Modern Retail has reported, shoppers in general are unlikely to see a large piece of tariff refunds returned to them.

Nike is still manufacturing shoes and apparel in China, a country that’s faced some of the highest import tariffs under Trump. Last year, about 16% of Nike’s footwear imported into the U.S. came from China. Nike also manufactures in Cambodia, Vietnam and Indonesia.

In a note on Tuesday, Neil Saunders, managing director of GlobalData Retail, wrote that Nike’s bottom line “looked strong.” “However, it is highly flattered by the tariff recovery,” he continued. “Without this, growth would be much more modest and reflective of the slow pace of recovery.”

Nike’s tariffs update comes at a larger time of change for the company. In August, Nike will bring on an outsider as a new finance chief: Pfizer executive David Denton. Denton will succeed Friend, who has served as Nike’s CFO since 2020 but came to the brand in 2009. Denton will take the reins nearly two years after Nike veteran Elliott Hill returned to the company as CEO.

Under a turnaround strategy called “Win Now,” Hill has worked to boost sales at Nike by restoring relationships with wholesale accounts, segmenting teams by sport and strengthening product innovation. Nike is making some progress on these initiatives two years later, particularly in running. executives acknowledged on Tuesday.

But there’s still room to go. Nike’s fiscal 2026 revenue was flat overall, totaling $46.4 billion on a reported basis. Its fourth-quarter revenue was down 1% on a reported basis, totaling $11 billion. In China, quarterly revenue dropped 12%. During Tuesday’s earnings call, Friend said earnings results were in line with expectations, but also added, “Our consumer is under pressure around the world.”

“While we continue to face top-line headwinds, we’re encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realize our full potential,” Hill said in a statement tied to Nike’s earnings.

On Tuesday’s earnings call, Hill added, “When we lead with sport authentically, consumers respond, and we see that in both internal and external brand tracking. Our focus now is translating that brand strength into healthier demand, cleaner marketplaces and sustainable growth.”