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· Posted on
February 21, 2024

Nike flags supply chain issues ahead

It looks like nothing can stop Nike...they've just got one teeny...tiny...ok, massive problem.

What's the key learning?

  • Nike's e-commerce revenue is up 29%, but they've got one massive problem...
  • Nike's Vietnamese factories have been shut down due to COVID. So, the demand for Nike gear is there, but supply? Not so much
  • Business forecasting is when a company makes informed guesses about key business metrics for the future. Nike has had to slash their 2022 forecasts to account for the prolonged shutdowns in Vietnam.

Background: We all know Nike for its epic tag-lines like 'just do it', but Nike has been creating a name for itself in the e-commerce space too.

What happened: The company's e-commerce revenue is up 29%. Plus, fewer markdowns have led to profits of 23%. And while it looks like nothing can stop Nike...they've got one teeny...tiny...ok, massive problem.

What else: The demand for Nike gear is there, but supply? Not so much. Nike's Vietnamese factories have been shut down due to COVID. So, even though Nike has been hitting its numbers, it's slashed its revenue forecasts for this year and next year 'cos the supply just ain't there.

So what's the key learning?

💡Business forecasting is when a company makes informed guesses about key business metrics (i.e. sales, expenses, profits) for the future.

💡The forecasts will take into account things that are within the company's control (i.e. sales), as well as anticipate conditions that might be out of their control (i.e. a GLOBAL PANDEMIC).

💡Nike says that global supply chain congestion is hurting the business more than they previously thought. As a result, they've had to slash their 2022 forecasts to account for longer transit times, labour shortages and prolonged shutdowns in Vietnam.

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