Nike’s most recent revenue report reveals earnings were below Wall Street expectations, and the retailer’s executives said supply chain issues are to blame, The Wall Street Journal reported. Nike posted revenue of $12.25 billion for the quarter ending Aug. 31, compared to the $12.47 billion forecasted by analysts. While the demand is there among Nike’s customers, supply-chain issues are limiting its revenue.
“Consumer demand for Nike, Jordan and Converse remains incredibly high and our first quarter
financial results would have been even stronger, if not for supply chain congestion resulting in lack of available supply,” Matt Friend, executive vice president and chief financial officer at Nike, said during the company’s most recent earnings call with analysts.
Despite the challenges, Nike still saw significant growth compared to last year, with retail sales growing in the double digits.
However, production problems in Vietnam and Indonesia have stifled further growth, and revenue was flat compared to the previous quarter. Lockdowns in Vietnam caused 10 weeks of lost production after a surge of COVID-19 cases. Moving products from Asia to North America is now taking twice as long as before the pandemic, according to the WSJ. Plus, Vietnam is currently in an extended lockdown until at least Oct. 1. Nike manufactures more than half of its footwear and about one-third of its apparel in the country.
Looking ahead, Nike executives are expecting flat revenue growth for the current quarter, and the company’s inventories are still low heading into the holiday shopping season. Executives also stated they are optimistic inventory will become more available by fiscal year 2023.