Nike Inc. was affected by higher costs worldwide and had lower-than-expected profits in its fourth quarter results released last week, leading to a decline in its share price.
Although the company’s sales were stable, its profits were hit by inflation, leading to a 3 percent decrease in its share price, Yahoo Finance reported.
Gross margins fell 1.4 percent to 43.6 percent in the quarter that ended on May 31, down from 45 percent in the same period last year. Its revenue was more than $12 billion.
In a press release, the company said the decline was “primarily due to higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates—partially offset by strategic pricing actions.”
The corporate giant’s stock price is down 6 percent year-on-year, and analysts have cut price estimates on its shares in recent weeks as they observe a fall in demand for the multinational’s products in North America.
Nike in China
Nike CEO John Donahoe declared last month that his company is in an ongoing, full-on economic engagement with communist China.“We’ve been in China for over 40 years,” Donahoe said.
Nike has been criticized for turning a blind eye to allegations of forced labor in China, arguing that they’re making American consumers complicit in Beijing’s repressive policies.
Sen. Marco Rubio (R-Fla.) said many U.S. companies hadn’t woken up to the fact that they were “profiting” from the Chinese regime’s abuses.
“For far too long, companies like Nike and Apple and Amazon and Coca-Cola were using forced labor. They were benefiting from forced labor or sourcing from suppliers that were suspected of using forced labor,” Rubio said in 2021. “These companies, sadly, were making all of us complicit in these crimes.”
Lawmakers have criticized other major U.S. companies for doing business with China despite the regime’s ongoing abuses.
On May 2, two leading congressmen demanded that U.S. fashion brands confirm that their supply chains are untainted by slave labor in China. Sourcing from forced labor in the country’s Xinjiang region, where a genocide is underway, is now against U.S. law.
Apple CEO Tim Cook recently praised Apple’s dependency on Chinese workers and consumers as “symbiotic.”
“After inking a secretive 2016 agreement to invest $275bn in China’s economy, workforce, and technological capabilities, the iPhone became a best-seller,” according to a Financial Times article published on May 3. “In reality, Apple is now as much a Chinese company as it is American.”
“Apple’s at the heart of what is the most complex aspect of this competition, which is companies that have a massive presence in China are going have to deal with the fact that some form of selective economic decoupling is inevitable,” Rep. Mike Gallagher (R-Wis.) told Bloomberg.
Gallagher and Rubio have also been critical of The Walt Disney Company. Rubio wrote an open letter in 2020, signed by Gallagher and other lawmakers, criticizing Disney for collaborating with the CCP, including filming parts of the movie “Mulan” in Xinjiang. Despite the ongoing genocide, Disney apparently cooperated with Xinjiang’s CCP propaganda and security offices.
The letter said that “the decision to film parts of Mulan in the XUAR [Xinjiang Uyghur Autonomous Region], in cooperation with local security and propaganda elements, offers tacit legitimacy to these perpetrators of crimes that may warrant the designation of genocide.”
