Nike stands to gain significantly from potential tariff refunds, with Piper Sandler estimating that such reimbursements could increase the company's earnings per share (EPS) and earnings before interest and taxes (EBIT) by 36%. This comes after Nike has paid approximately $1 billion in tariffs since they were imposed in early 2025.
The Supreme Court's recent ruling against these tariffs allows companies like Nike to seek refunds, with estimates suggesting that U.S. companies could collectively claim up to $175 billion.
However, the situation is complicated by a class action lawsuit filed by consumers against Nike, arguing that the company should not retain the refunds since they passed the tariff costs onto consumers through higher prices.
Despite these legal challenges, Piper Sandler views the anticipated refunds, expected to be processed in July and August, as a positive catalyst for Nike, which has seen its stock drop over 30% this year. The company’s shares fell 15% following a disappointing earnings forecast in March and are currently down about 45% from their 52-week high of $79.24.
Additionally, Wells Fargo analysts downgraded Nike's stock to a hold rating, citing concerns over its slow recovery and a preference for apparel over footwear.
Jim Cramer has expressed frustration with Nike's performance under CEO Elliott Hill but remains cautiously optimistic after both Hill and Apple CEO Tim Cook purchased $1 million in Nike shares last month, giving the company until fall to demonstrate improvement