Nike warns of ‘supply chain headwinds’ and inventory shortages ahead of the holiday shopping season

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  • Nike faces supply chain issues, impacting the company’s inventory as holiday shopping starts.
  • Factory shutdowns and shipping disruptions are to blame as the sportswear company’s demand is greater than ever.
  • Pandemic-related supply chain issues and labor shortages are currently impacting businesses across the globe.
  • See more stories on Insider’s business page.

Select Nike apparel and shoes may be hard to come by this holiday season as the sportswear company grapples with supply chain issues caused by the COVID-19 pandemic.

Nike is currently dealing with a range of issues from fewer workers in its factories to shipping disruptions to send its product, according to a company earnings call on Thursday. Varying factors are causing supply chain problems in the US and across the globe. Besides clothing, products from books and computer chips to toilet paper and Coca-Cola are being affected. These issues also include labor shortages at factories, shipping delays, and a lack of transportation, Insider reported.

Nike is also struggling with strict pandemic lockdowns in Vietnam, where a lot of manufacturing is done, and is experiencing slowed production due to a shortage of workers. So far, the company has lost 1o weeks of production in Vietnam, Matt Friend, Nike’s chief financial officer, said on the call.

The company revised its guidance for 2022 because of the supply chain impacts. 2022 revenue is now expected to grow in the single digits versus double digit growth in 2021 and expectations for that to continue next year.

“Lost weeks of production combined with longer transit times will lead to inventory shortages in the marketplace for the next few quarters,” Friend explained.

For shoppers, this bottlenecks will mean a decrease in selection. So chances are when employees “check the back” for more sizes of the latest sneaker and come back empty-handed, there’s really nothing there.

Despite the shortages, customer demand for Nike apparel is higher than ever, Friend said.

“Consumer demand for Nike remains at an all-time high and we are confident that our deep consumer connections and Brand momentum will continue,” Friend said. ” However, we are not immune to the global supply chain headwinds that are challenging the manufacture and movement of product around the world.”

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