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As per the latest reports, the share prices for Nike have experienced a 3% drop on the Thursday, September 23, 2021 trading. The drop in the share prices for the company was reported as a result of the congestion with the supply chain. The company reported that it was the main reason why the sales and business of the company have been badly impacted.
As a result of low sales and business, Nike has proceeded with lowering the outlook for the fiscal 2022 year. In the outlook, the sneaker giant has revealed that it has experienced several issues. These issues include prolonged production shutdowns, labor shortages, and transit times in Vietnam.
Due to the current business condition and low amount of sales, the company has brought its sales for the entire year to a pace at mid-single-digit. Previously, the company had set its outlook of sales growth in double-digits.
This goes to show that Nike is getting ready to incur a huge loss in the upcoming fiscal year due to the shortage of supplies. In the report, the analysts added that the growth expectation for the entire year fiscal 2022 year was 12%. Similarly, the company had expected that the sales growth in the second quarter would also be 12%.
As a result of the mixed first-quarter earnings, Nike has proceeded with revising its forecast. The company also revealed that in the first quarter of 2021, it ended up missing out on its expectations for revenue. The firm reported that in North America, it could see that the sales had dropped on a large scale.
However, Nike managed to increase the profits for the respective quarter by selling its products and goods at full prices. This has eventually helped the company in increasing its profits.
For the particular quarter of 2021, Nike revealed that the earnings it made were $1.16 per share. The expectations that the analysts at Refinitiv had set were $1.16 per share. On the other hand, the revenue that the company generated for the respective quarter was $12.25 billion. On the other hand, the revenue that the Refinitiv analysts had set was $12.46 billion.
Nike has revealed that in the upcoming quarters, it is going to face inventory shortages but that will be for the short term. Nike is hoping that the situation will get back to normal after a few bad quarters. The information related to the downfall of the company’s sales was shared by Matt Friend, the CFO at Nike.
Ever since the middle of July, the Vietnamese manufacturing facilities for Nike have remained for most of the part. According to Nike, it produces 30% of its apparel and 50% of its footwear from Vietnamese facilities.
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