The effect of factory closures in Vietnam on Nike this year was so immense that it forced the brand to cancel production of roughly 130 million units. According to Friend, Nike lost three months worth of production volume, and it has taken factories months to get back to normal levels of output.
“As of today,” the CFO said, “all factories are operational and employee attendance rates have improved, with weekly footwear and apparel production now at roughly 80 percent of pre-closure volumes.”
The China and Asia Pacific Latin America regions suffered from a decline in units sold over the quarter because of the disruptions in production and low inventory levels. Friend said that SNKRS numbers in China were down 50 percent compared to the prior year because Nike didn’t have the inventory across all of its geographies to run a coordinated launch.
“We have been delaying launches to synchronize them around the world,” he explained, referencing Nike’s frequent sneaker release date shifts across the quarter.