Ahead of Nike’s Earnings Report, Analysts Warn Vietnam Shutdowns Will Likely Impact Sales

Athletic giant Nike Inc. is scheduled to report its fiscal first quarter results next week, and though market watchers expect another batch of favorable numbers, they’re also warning of trouble ahead for the Swoosh. Analysts Jim Duffy of Stifel and John Kernan of Cowen have lowered their estimates for Nike’s full-year sales. In notes this week to investors, they specifically citing the production shutdown in Vietnam, caused by the COVID-19 pandemic. Factories in Vietnam have been closed since late July following severe outbreaks of the coronavirus in the country. The closures come at time when the global supply chain system is already severely strained, and retailers and manufacturers face steep challenges delivering goods in time for the holiday season. According to Duffy, “Our analysis of Nike factory partners suggests production in the southern part of Vietnam is approximately 37% of footwear capacity and 23% of apparel capacity. Late July to late September production outages imply eight to 10 weeks impact. We see this impeding product availability beginning late FY2Q and well into FY3Q.” As a result, he has trimmed his estimates for the second and third fiscal quarters. Similarly, Kernan lowered his outlook for Nike’s full-year sales by 300bps, calling for 9% growth in the

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