Sportswear maker Nike is confident the resumption in production in Vietnam will boost the company’s future recovery.
“Compared to ninety days ago, we are increasingly confident supply will normalize heading into fiscal 2023” as all factories in Vietnam were operational and production was at about 80 percent of what it was before the closures, finance chief Matthew Friend said.
Social distancing in Vietnam, where more than half of Nike’s footwear and about a third of its apparel manufacturing occurs, in the July-September period caused the company to cancel production of roughly 130 million units.
But as the government eased its social distancing regulations early October, its factories have reopened.
The company forecasts growth to be in the lower single digits for the next quarter because of the continuing impact of lost production from pandemic-related disruptions in Vietnam where an average 18,000 new cases were recorded in the last seven days.
Friend said Nike will continue to watch the Omicron variant to see what impacts it may bring to production.
Demand for Nike’s goods continues to outpace supply. The previous quarter, Nike reported a 10-week delay in production because of a lockdown in Vietnam and said it expected flat revenue growth for the November quarter.
Nike posted a revenue of $11.4 billion in the quarter ending Nov. 30, up 1 percent from the same period a year earlier. Analysts expected revenue of $11.2 billion.