Nike Inc.

Despite these challenges, we expect the company's credit metrics to remain intact, with forecast S&P Global Ratings-adjusted leverage (net of cash) of just under 0.5x for fiscal year 2022. Over the longer-term, this experience may lead Nike to further diversify its supplier base given its concentration in Vietnam, though we note that most footwear manufacturing is located in this region. The stable outlook on Nike Inc. reflects our expectation that it will maintain its strong operating performance despite the ongoing pandemic and supply chain constraints due to the global strength of its brand, its continued product innovation, and its strong DTC and e-commerce offerings. We forecast the company's leverage will remain below 1x. We could lower our ratings on Nike

...Supply chain disruptions related to the coronavirus pandemic have caused Nike to lower its 2022 revenue guidance below its long-term target, though we expect its credit metrics will likely remain in line for the rating. Nike lowered its revenue growth expectations for fiscal year 2022 to a mid-single-digit percent increase, from a low-double-digit percent rise previously, due to manufacturing lockdowns in Vietnam and port congestion, primarily in the U.S. The revision is a deviation from Nike's 2025 long-range plan and highlights the significant supply chain disruptions it is facing. However, a mid-single digit percent increase would be in line with the company's historical growth rate prior to the pandemic. In fiscal year 2021, Nike manufactured 51% of its branded footwear and 30% of its apparel in Vietnam where many factories have faced full, government-enforced lockdowns since July with an anticipated reopening in October. We expect it to take some time for these factories to return...

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