Nike cuts sales guidance over knots in supply chain

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A cautionary trading statement from Nike Inc (NYSE:NKE) about supply chain issues has sent wobbles around the wider sportswear market on Friday.


The trainers and tracksuits giant said overnight that it now expects lower sales for the full year as it warned of likely delays during the pre-Christmas shopping season as products are held by supply chain issues.


“In Vietnam, nearly all footwear factories remain closed by government mandate. Our experience with COVID-related factory closures suggest that reopening and ramping back to full production scale will take time,” Nike’s financial chief said.


Nike said it had lost 10 weeks of production in the south-east Asian country so far.


Analysts at AJ Bell said: “Welcome to the season of sales and profit warnings. Investors should brace themselves for disappointing trading updates as supply chain issues and inflation weigh on margins. There is a real risk that companies are going to miss earnings expectations despite there being strong demand for their products and services.


“Nike is one of several companies to disappoint on this front. Production and shipping delays means it is struggling to keep up with demand and, as a result, has lowered its sales outlook.”


Shares in JD were down 2% to 1,108p in London, while Adidas tumbled 3% to EUR280.75 in Germany, as investors join the dots.

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