Nike CEO Says Sports Giant ‘A Brand of China and for China’ on Call for Results – .

Nike CEO Says Sports Giant ‘A Brand of China and for China’ on Call for Results – .

The CEO of Nike said the company is a “brand of China” during a recent earnings call, defending the company’s position in the country.

The comments come months after the sportswear company was embroiled in a controversy over alleged human rights violations in the country.

This week, CEO John Donahoe completed his quarterly corporate earnings report. He was asked about the business plan in China by an analyst.

“We have been in China for over 40 years, we still invested a lot of time and energy in China in the beginning and today we are the biggest sports brand there and we are a brand from China and for China, ”Donahoe replied, according to a transcript released by Nasdaq.

“We will continue our long-term investment in China,” Donahoe added later.

During the earnings call, it was revealed that fourth quarter revenue in the country grew 9% on a currency neutral basis.

Chairman and CEO John Donahoe commented on China in a recent earnings conference call

In addition, the company recorded double-digit growth in the country for the seventh consecutive year.

Despite the growth, sales in the Greater China region actually fell short of Wall Street expectations last year.

The region’s revenue rose 17% year-on-year to $ 1.93 billion, but analysts expected the figure to be around $ 2.25 billion, Fox Business reports.

In total, Nike announced a 96% increase in total revenue from last year, reaching $ 12.34 billion. The betting income for the company was $ 1.5 billion.

In North America, sales increased 141% year-on-year, reaching a record high of $ 5.38 billion on the continent.

The company’s positive financial results led to a 15.38% rise in shares on the stock market on Friday.

The shares closed the day at $ 154.35, a new record for Nike.

While China no longer appears to be the engine of Nike’s recovery from COVID-19, analysts don’t believe sales growth will slow down much more in the region.

“In our opinion, Nike is a long-term outperformer,” said UBS analysts Jay Sole and Mauricio Serna.

People walk past a Nike store in Beijing, China. The CEO of the company recently declared that Nike is “a brand of China and for China”

Earlier this year, Nike was among companies accused of sourcing from factories using forced labor in a report on China.

The UK Conservative Party’s Human Rights Commission report said tens of thousands of Uyghur Muslims had been transported to factories across the country for work.

The report noted that one of the “most shocking new developments” over the past five years has been that forced labor is now used “across China in factories that are part of the supply chain of large international corporations. “.

He continued, “Under conditions that strongly suggest forced labor, Uyghurs work in factories that are part of the supply chains of at least 83 well-known global brands in the tech, apparel and industry sectors. automotive industries, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen. ‘

Vicky Xiuzhong Xu and Nathan Ruser, authors of an Australian Strategic Policy Institute (ASPI) report on forced labor by Uyghurs, testified before the Commission in an online hearing.

They said they discovered in 2019 that Uyghurs were being transported from Xinjang to other provinces for work.

Xu and Ruser said that “it is a policy of the central government” which has resulted in “tens of thousands of people being driven from their homes every year and sent to the eastern provinces to work in the supply chains of China. international brands ”.

They added that in the factories, workers were subjected to forced labor conditions, had to work “under close surveillance” and during the few hours of free time were “forced to attend Mandarin Chinese lessons and classes. of political indoctrination ”.

ASPI has identified 27 factories in nine Chinese provinces that use Uyghur labor transferred from Xinjang since 2017.

“We will continue our long-term investment in China,” Donahoe (right) added during the call.

Nike responded, “We are concerned about reports of forced labor in and related to the Xinjiang Uyghur Autonomous Region (XUAR).

“Nike does not source its products from XUAR and we have confirmed to our contract suppliers that they do not use textiles or yarns from the region.

“The Nike Code of Conduct and the Code’s Leadership Standards contain requirements that prohibit any type of prison, forced, bonded or contract labor, including detailed provisions on freedom of movement and prohibitions of discrimination based on it. ethnicity or religion. “

The controversy was not addressed when the results were called, according to the transcript.


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