The great supply chain disruption has hit home at Nike.
Factory closures in Asia will lead to lower revenue growth and some product shortages for the rest of Nike’s fiscal year, company officials said. Nike revised its estimate of second-quarter revenue to be flat or down slightly.
“We’ve lost 10 weeks of production since late July,” said Matt Friend, Nike chief financial officer. Add the factory shutdowns to congested ports, a shortage of shipping containers, he said, and the expected time of delivery of new Nike products from Asia to North America has doubled from 40 to 80 days.
Indonesia and Vietnam both shut down footwear factories in an attempt to tamp down outbreaks of COVID-19. Indonesia has since reversed course and is allowing the facilities to reopen. Vietnam remains shut down.
Nike CEO John Donahoe told analysts that it’s impossible to predict exactly when things will return to normal.
“Matt and I wish we had crystal balls, but we don’t,” he said. “We will navigate through this. We’re stronger now than we were 18 months ago and we’ll be stronger 18 months from now than we are today.”
Fueling Nike’s strength was what Donohoe called “an incredible summer of sports.” Nike athletes won hundreds of medals at the Summer Olympics in Tokyo, a number competitive with some of the biggest countries.
“Sports are back and that’s such an energizing factor for this company and our employees,” Donohoe added.
Nike earned $1.87 billion, $1.16 a share, in its first quarter, which exceeded Wall Street expectations. Total sales hit $12.25 billion in the period, which was about $200 million short of the consensus expectations of Wall Street analysts.
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September 24, 2021 at 06:21AM
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Factory shutdowns put crimp in Nike’s sales - OregonLive
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