Sports apparel retailer Nike (NKE) has reportedly sent an email to a store owner saying it is canceling future orders through Summer 2022 due to continuing Covid 19-related supply-chain woes. Nike stock fell but then slashed losses. Key Nike sellers Dick’s Sporting Goods (DKS) and Foot Locker (FL) fell solidly.
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The email was first shared in a tweet by Brendan Dunne, co-host of a sneaker culture podcast called Run on Tuesday, according to a Newsweek report.
The email reportedly says that future orders for Spring 2022, Summer 2022 and the balance of the holiday season will be canceled.
“This means any HO21 (brand name) orders that have not yet shipped will not be fulfilled, nor will any orders for SP22 and SU22,” the reported email said.
The email directs the recipient to contact its Nike Marketplace Partner Representative. IBD has reached out to Nike for comment.
Nike Stock
Shares of the Dow Jones giant fell as low as 167.77 on the stock market today, but pared losses to a fraction at 172.04. Nike stock raced past a cup-base buy point of 174.48 to an intraday high of 179.10 on Nov. 5, but has since fallen below that buy point, according to MarketSmith.
Nike’s relative strength line is ticking down. Its RS Rating is 80 out of a possible 99, while its EPS Rating is 74.
Nike topped earnings views in the first quarter with EPS of $1.16 vs. estimates for $1.12, but missed sales forecasts due to supply issues. Revenue grew 16% to $12.2 billion. Wall Street had expected $12.47 billion.
At the time, Nike also cut its sales outlook for the second quarter and the full year, citing supply-chain constraints.
Among other sports apparel retailers that rely heavily on Nike products, Foot Locker (FL) dropped 3.6%, dipping below its 50-day line. FL stock tumbled last week after warning of supply-chain issues.
Meanwhile, Dick’s Sporting Goods (DKS) sank 5.5%. DKS stock was closing in on a cup-base buy point of 140.95 after breaking out on Nov. 22, ahead of its earnings report. On Tuesday, shares fell 4.1%, despite a better-than-expected earnings report.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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