Nike on Friday is forecasting a rebound from slow sales and profits in the last quarter and despite $1 billion added tariff costs on foreign goods of its sneakers and athletic gear.

Sales declined 12% in the quarter that ended May 31, the company’s fifth consecutive quarter of slipping sales. Nike hasn’t reported a sales drop larger than 12% since 2000, except for a quarter during COVID,

Nike’s efforts to reduce discounting, streamline inventory, and diversify its supply chain are early but promising signs of a turnaround.

Key TakeawaysNike shares surged 15% Friday after the shoe and athletic apparel maker beat estimates for the fourth quarter.Sales and profit fell less than expected year-over-year as new CEO Elliott Hill's turnaround plan progresses.

Nike, Inc.'s Q4 results show early progress with inventory stabilization and renewed strategies, sparking optimism. Click for my look at NKE stock prospects.

Nike said it would cut its reliance on production in China for the U.S. market to mitigate the impact from U.S. tariffs on imports, and forecast a smaller-than-expected drop in first-quarter revenue,

Nike's shares jumped at the opening bell Friday after the company said it's shifting some production away from China. But it also warned that tariffs imposed by the Trump administration will cost it about $1 billion before it makes internal changes,