Nike Slips As S&P Says It May Run Out Of Vietnamese Sneakers By Investing.com

By Dhirendra Tripathi

Investing.com – Nike (NYSE:) stock fell 1.7% Monday as S&P (NYSE:) warned that halting of manufacturing in Vietnam by two of its suppliers might exacerbate the supply chain disruptions the company has had to deal with.

Shares were also lower as broader market worries about the Delta variant stalling a reviving global economy added to the adverse sentiment.

Reuters had on July 14 and July 15 reported that Chang Shin and Pou Chen, key Vietnamese suppliers to Nike, had halted production as Covid-19 curbs hit factories in Ho Chi Minh City and in business areas around it.

A resurgent virus, mostly the Delta variant of the original coronavirus, is raging through many parts of the world including the U.S., the U.K., parts of Europe and Asia. Factory shutdowns and curbs on outdoor activity have returned at many of those places.

Data from Panjiva, a business line of S&P Global Market Intelligence, pointed out that Vietnam accounted for 49% of U.S. seaborne imports linked to Nike and its products in the second quarter of 2021.

“There has been a refocusing on China though, with imports up 54.6% year over year in the second quarter of 2021 being the major driver of a 12.5% rise in total imports linked to the company,” Christopher Rogers (NYSE:), senior researcher at Panjiva, wrote in a blog post on the S&P Global website.       

Nike’s imports from Vietnam are led by footwear, which accounted for 82% of shipments in the 12 months to June 30, Rogers pointed out.