American sportswear firm Nike lowers FY22 growth projection

28 Sep '21

2 min read

Pic: Shutterstock

Although Nike had a decent start to FY22, the footwear manufacturer has downgraded its financial outlook. In its earnings call, Nike’s executive vice president and CFO, Matt Friend said that the company has lost 10 weeks of production in Vietnam due to the global supply chain headwinds and it expects FY22 revenue to grow in mid-singles over low double-digit growth last year.

“Several of our factory partners in Vietnam and Indonesia were required to abruptly cease operations in the first quarter. As of today (September 23), Indonesia is now fully operational, but in Vietnam, nearly all footwear factories remain closed by government mandate. Our experience with COVID-related factory closures suggest that re-opening and ramping back to full production scale takes time,” Friend said in the call.

Friend further mentioned that the factory re-opening will occur in phases beginning in October, with a ramp to full production over several months.

“We expect all geographies to be impacted by these factors; however, those geographies in Asia with less in-transit inventory at the end of the first quarter will experience a disproportionate impact beginning in Q2,” Friend continued. “We are optimistic inventory supply availability will improve heading into fiscal 23, against the backdrop of a strong brand and healthy pull market across all geographies.”

Fibre2Fashion News Desk (JL)

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