Nike (NYSE: NKE) shares fell Friday following mixed fiscal first-quarter earnings results as well as its reduced fiscal 2022 outlook. Amid a slew of issues including ongoing supply chain disruptions, the company lowered its 2022 forecast to balance out any extended transit times, labor shortages and drawn-out production shutdowns in Vietnam.
The sneaker giant reported earnings of USD1.16 per share, compared to the expected USD1.11 a share. Revenue amounted to USD12.25 Billion, lower than analysts anticipated USD12.46 Billion.
“NIKE’s strong results this quarter are continued proof of our deep consumer connections, unrelenting innovation pipeline and a digital advantage that fuels our brand momentum,” said John Donahoe, President and CEO, NIKE, Inc. “We have the right playbook to navigate macroeconomic dynamics, as we create value through our relentless drive to fuel the future of sport.”
Nike now foresees full-year sales to grow at a mid-single-digit rate, meanwhile it had previously predicted a low double-digit growth. Additionally, it foresees second quarter sales to be flat or within low single digits. According to Refinitiv data, analysts had anticipated revenue growth of 12% for the year and another 12% for the second quarter.
Due to the Covid-19 pandemic, Nike has been dealing with factory shutdowns in Vietnam, which produces about 50% of its footwear and at least 30% of its apparel. Chief Financial Officer Matt Friend revealed in a conference call that Nike believes the business will experience short-term inventory shortages throughout the next couple of quarters.
“We’ve already lost 10 weeks of production, and that gap will continue. … It’s going to take several months to ramp back to full production,” he told analysts.
Nike shares have risen 13% year to date and the company has a current market cap of USD236.51 Billion.