Nike claims Trump's tariffs could cost it $1bn

These tariffs, levied by the White House against most countries on Earth, will likely lead to increased prices, the brand added.

Nike also said it would reduce supply from China to the US market to bring down costs.

It currently makes around 16% of its footwear in China, which is then imported into the US, but is looking to reduce this to a “high single-digit range” by the end of the current financial year.

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Company bosses said they will have to move the supply in China to other countries in a bid to offset costs.

Matt Friend, Nike’s chief financial officer, said: “These tariffs represent a new and meaningful cost headwind.”

He said the cost impact would be about one billion US dollars (£727 million) if tariffs remain at current levels.

Mr Friend added: “We will optimise our sourcing mix and allocate production differently across countries to mitigate the new cost headwind into the United States, despite the current elevated tariffs for Chinese products imported into the United States.

“Manufacturing capacity and capability in China remains important to our global source base.”

He also said the group was looking to “minimise the overall impact to the consumer”, although it confirmed it would start pushing through price hikes in the US starting from the autumn.

Corporate costs could also be cut under plans to offset the expected cost hit.

The comments came as Nike reported its worst quarterly earnings in more than three years, although the out-turn was better than feared on Wall Street, helping its US-listed shares lift overnight on Thursday.

Chief executive Elliott Hill, who returned from retirement last year to take the helm, is leading a turnaround at the group.

He said the group’s results showing a 12% drop in fourth quarter revenues to 11.1 billion dollars (£8.1 billion) were “not where we want them to be”.

“As we enter a new fiscal year, we are turning the page and the next step is aligning our teams to lead with sport through what we are calling the sport offense,” he said.

Mr Friend also said the sales decline “reflected the largest financial impact” of its revamp, adding “we expect the headwinds to moderate from here”.