Closures in Vietnam lead to flat Nike revenues
21/12/2021
Group sales were $11.4 billion, up 1% compared with the second quarter last year.
Factories were closed for around three months in autumn, but are still affected by staff absences.Output is around 80%, although it’s slightly lower for footwear and slightly higher for clothing.
This, combined with shipping delays, meant there was less new product on the shelves during the quarter, which affected results.
Nike’s chief financial officer, Matt Friend, said: “Vietnam factory closures caused us to cancel production of roughly 130 million units due to three months of lost production volume and several months to ramp back to full production. Compared to 90 days ago, we are increasingly confident supply will normalise heading into fiscal ’23.”
CEO John Donahoe said the group is continuing to benefit from an increased focused on health and fitness as well as consumers’ desire to wear athletic footwear and clothing “in all moments of their lives”.
In an investors’ call, he highlighted new products including the Nike Air Sesh, designed for dancers, with a mid-cut leather upper and cushioned foam under the foot; and the Alphafly Next Nature, which has more than 50% total recycled content by weight.
“Learnings from the Alphafly Next Nature will be scaled across our running line, creating higher performing products with more sustainable materials,” said Mr Donahoe. “We know the future of sport depends on a healthy planet and we remain committed to doing our part to protect that future.”He concluded the group was stronger than it was pre-pandemic and he “couldn’t be more excited”.
“As we close out 2021, I want to take a moment to personally thank our 75,000 global Nike teammates for everything they’ve done this year,” he added.Share this story:
