Nike's Vietnam supply hurdles in focus ahead of quarterly results

Are sneakerheads in for a rough holiday season? Nike Inc's updates to its full-year sales outlook on Thursday will likely answer that pressing question for Wall Street as the world's largest sportswear maker deals with unprecedented supply challenges ahead of the holiday season.

Three months ago, Nike gave a rosy outlook for the rest of the year as it benefited from consumers splurging on sneakers for running and hiking as they returned to their routines after over a year of staying at home.

Still, some analysts have cut their outlook for Nike's sales, predicting that lockdowns and factory closures in Vietnam, where about half of all Nike footwear is manufactured, will cause shortages during the crucial shopping season.

"We believe the risk of significant cancellations beginning this holiday and running through at least next spring has risen materially for Nike as it is now facing at least two months of virtually no unit production at its Vietnamese factories," BTIG analysts wrote in a note.