By Dhirendra Tripathi

Investing.com – Nike stock (NYSE:) traded 5% lower in Friday’s premarket as supply chain issues forced the company to lower its outlook for the year. 

As supply issues remain in Vietnam, which is a major production center for Nike products, the revised guidance was made. Retailer warned that holiday shoppers could be delayed due to low supply.

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

Nike said that it will take many months to restore all production after the loss of 10 weeks in Vietnam. According to Reuters lockdowns will continue at least through September in some parts of the country.

As the Pandemic that ravaged Ho Chi Minh City’s capital and surrounding areas caused widespread destruction, factories in Asia were forced to close down.

As congestion at the ports grew and trucks were in short supply, shipping and transport problems continued. Inventory levels of finished goods and raw materials remained low as a consequence.

Nike predicts that sales will grow by 5% in 2022, as opposed to its previous estimate of a low-double-digit growth. Revenue growth for the second quarter is expected to be flat or up 3%.

Revenue rose 16% to $12.2 million in the first quarter. Estimates were beaten by earnings per share, which rose 22% to $1.16. Costs termed ‘demand creation expense’ by the company rose 36% and were the key reason why Nike’s selling and administrative expenses were higher by 20%.