The week ahead: Covering the field of uncertainty with Nike’s latest financial update |

Nike has it all, and I’m not talking about their dominance in the athletic footwear and apparel industry.

Its latest quarterly financial report, due in the coming week, is worth watching even for those who only have a pair of Nikes in their closet and not in their investment portfolio.

The company has consistently been able to deliver above-expected profits during the pandemic. Even though COVID-19 has pinched factories in Asia making Nikes, demand for its shoes has been high. In December, the company was growing confident that its low inventory was improving, especially as manufacturing in Vietnam resumed. Still, it forecast mid-single-digit growth due to the virus and loss of production.

Tighter supplies have allowed Nike to be firmer on pricing, which helps its profit margins. “We expect to continue to benefit from exceptional demand amid low inventory in the market,” Chief Financial Officer Matthew Friend said during the company’s latest quarterly financial conference call. Still, the company isn’t immune to a key inflationary factor for foreign manufacturers: transportation costs.

Nike will be one of the first major US multinationals to talk about its quarterly financial performance since Russia launched its war in Ukraine. The company joined others in reducing its operations in Russia. Russian shoppers cannot make purchases on Nike’s website and app and the company has temporarily closed its company-owned retail stores in Russia. Think of it as punishment for the shoes.

Europe, the Middle East and Africa account for about a quarter of Nike’s revenue. Russia alone may be a small slice, but Monday’s Nike results will give investors an early indication of the impact of the war in Ukraine on consumer behavior in Europe.

Perhaps more important will be China. China is a manufacturing base for Nike and generates about 20% of its revenue. The country’s zero COVID policy has led to tens of millions of people being locked down starting this week. This risks harming Nike’s supply chain and sales.

Supply chain issues, inflation, global uncertainty – Nike has it covered.

(Financial journalist Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami, where he is vice president of news. He is the former co-anchor and editor of “Nightly Business Report” on public television Follow him on Twitter @HudsonsView.)

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