Supreme Court tariff win delivers no relief for sportswear shares

By mid-morning on Feb. 20, the narrative seemed to write itself. Shares of Adidas, Deckers, Under Armour and On Holding had jumped between 1.5 and 2.3 percent. Nike was up nearly 4.5 percent. Industry headlines declared sportswear the clear winner of the Supreme Court’s most consequential trade ruling in a generation. For a few hours, after more than a year of absorbing costs, raising prices and fielding analyst questions about margin exposure on every earnings call, it looked as though the industry had finally caught a break.

Then President Trump walked to the podium.

At a White House press conference on Friday afternoon, the president announced he would impose a new across-the-board global tariff under separate legal authority, with reports confirming a 15 percent rate effective Feb. 24. The gains unwound almost immediately. Nike closed the day at $65.40 – down 0.32 percent from its prior session close of $65.61 – having traced an intraday range of more than $5 on volume of 33.4 million shares, more than double its 15.5-million-share daily average. The sector that had been celebrated as the day’s big winner ended the session as an underperformer relative to the broader market.

The pattern is worth sitting with, because it contains a lesson that matters more than any single session’s closing prices. The Supreme Court delivered genuine legal relief on Feb. 20. The IEEPA tariffs were real costs – absorbed through margin compression, passed on through price increases, hedged through supply chain restructuring that took years and billions of dollars to execute. Their removal is a genuine positive. But the market’s spike-and-fade was not irrational. It was a rational repricing of a starker realization: trade policy risk has not been removed. It has been rerouted.

The ruling and what it means for sporting goods brands

The US Supreme Court voted 6–3 in Learning Resources, Inc. v. Trump to strike down the administration’s use of the 1977 International Emergency Economic Powers Act, ruling that the executive branch had exceeded its statutory authority. Chief Justice John Roberts, writing for the majority, held that IEEPA’s language – particularly “regulate… importation” – does not grant the power to impose tariffs, a core congressional function. The ruling came after a legal process that ran through three courts over nearly a year.

The decision vacated levies that had reached 46 percent on Vietnamese goods, 49 percent on Cambodian imports and 32 percent on Indonesian products. These three countries together account for roughly 75 percent of Nike’s footwear volume and underpin supply chains across the sector, based on Nike’s FY2024 and FY2025 disclosures.

Tariff relief triggers spike-and-fade across sportswear

The competitive divergence within the sector added important texture to Friday’s trading. Adidas ended at €84.26 ($93.76), up 2.22 percent from its prior close – the only major player to sustain meaningful gains through the session – with an intraday range of €83.14–€85.03 ($92.52–$94.62). On Holding finished at €44.43 ($49.42), up 2.92 percent from €43.17 ($48.02), reaching a session high of €45.21 ($50.29).

Lululemon advanced approximately 2.4 percent to €168.36 ($187.30). Under Armour, whose domestic manufacturing exposure is proportionally lower than most peers, posted the session’s strongest gain among major sportswear names, rising roughly 5.2 percent to close at €7.32 ($8.14). Deckers Outdoor, parent of HOKA and UGG, closed at €106.68 ($118.69). Amer Sports, whose Arc’teryx, Salomon and Wilson brands carry premium positioning and a more geographically diversified sourcing footprint, closed at €37.72 ($41.96). Columbia Sportswear saw a day range of €55.73–€58.23 ($62.00–$64.79), buoyed partly by the tariff news and partly by strong fourth-quarter 2025 earnings reported earlier in the month, when the company’s €1.56 ($1.73) earnings per share beat analyst expectations of €1.07 ($1.19).

Sourcing exposure drives divergent tariff impact across sportswear leaders

Under Armour’s outperformance relative to Nike reflected a structural difference rather than a trading anomaly. Nike sources approximately 50 percent of footwear from Vietnam and 27 percent from Indonesia. On Holding manufactures primarily in Vietnam and faces direct exposure to any replacement levies ahead of its Q4 2025 results on March 3. Lululemon sources roughly 30–35 percent of production from Vietnam, making it the company’s largest manufacturing base 

Adidas’ relative resilience may reflect lower direct exposure to US-origin tariff frameworks, given that its primary European listing tilts towards revenues less dependent on US sourcing costs.

Under Armour, by contrast, had already reduced its China sourcing over seven years. The company now sources the majority of its apparel and accessories from Jordan, Vietnam, Cambodia and Indonesia – countries that remain subject to replacement tariffs, though at lower rates than the vacated IEEPA schedule.

The replacement tariff and the refund question

The administration responded quickly. Trump announced an initial replacement rate of 10 percent under Section 122 of the Trade Act of 1974 – a provision whose levies may last up to 150 days without congressional extension – before confirming a 15 percent rate effective Feb. 24. Section 232 tariffs on steel and aluminium and Section 301 China-specific tariffs remain fully intact. The Yale Budget Lab estimated that post-ruling tariff policy still represents a 6.7 percentage-point increase in the effective US tariff rate relative to the pre-2025 baseline, with remaining tariffs projected to raise $1.2 trillion (approximately €1.06 trillion) over 10 years – approximately half of what would have been collected under IEEPA.

The refund question compounded the uncertainty. Refunds will not come automatically. Each company must file individual customs claims in a process already initiated by more than 1,000 corporate entities. In a note issued Feb. 20, the US National Retail Federation called on the lower court to ensure “a seamless process to refund the tariffs to US importers,” while simultaneously lauding the ruling as providing “much-needed certainty for US businesses and manufacturers.”

What operators should consider – and why measured reporting matters

For sporting goods executives managing sourcing decisions on 12- to 18-month lead times, replacement tariffs under new legal authorities create a different kind of uncertainty than the IEEPA framework – but not a smaller one.

The advice is straightforward, if not easy. The ruling changes the legal architecture of US trade policy, not its political direction. Supply chain restructuring that made sense at 46 percent Vietnamese tariff rates still makes sense at 15 percent. Consumer price increases implemented to protect margins do not need reversing simply because a replacement tariff arrives at a lower headline rate. Refunds for IEEPA duties paid since 2025 are now legally possible but operationally complex.

The industry spent 2025 learning to operate in a high-tariff environment. That knowledge is not obsolete. It is the foundation on which the next phase of adaptation will be built. The Supreme Court won the legal argument on 20 February. Whether the industry ultimately wins the commercial one will be determined not in a courtroom, but in how quickly and clearly executives separate the genuine relief the ruling provides from the uncertainty it leaves entirely intact.