What to Expect When Nike Reports Earnings Next Week: Supply Chain Impacts and DTC Strength

Nike is set to deliver financial results for the third quarter on March 21. As supply chain headwinds and COVID-19 related lockdowns persists, analysts are overall skeptical about Nike’s ability to fully recover in Q3, though most agree that headwinds will level out in future quarters. “We believe the company continues to work through its supply chain woes but has yet to be back at 100% full scale production,” wrote BTIG analyst Camilo Lyon in a note, giving Nike a “Neutral” rating due to a lack of visibility on a timeline for normalization. For Nike, supply chain issues have impacted multiple regions and has included months-long factory closures throughout last summer and beyond. Nike had two months of no unit production in Vietnam when two of its footwear suppliers there stopped manufacturing in July. The halt in production continues to impact inventory and sales in regions like Greater China. Last quarter, Nike reported revenues of $11.4 billion for Q2, up 1% year over year and flat on a currency-neutral basis. While revenues only grew slightly year over year, gains were offset by the supply chain problems. According to Lyon, recovery in China has been impeded by renewed COVID-19 related lockdowns in the region, which could prolong

Follow Footwear News on Twitter or become a fan on Facebook.

from Footwear NewsFootwear News https://ift.tt/OgatCGe