Nike Inc. shares fell by 9% after the sneaker giant revealed its financial reports for the first quarter of 2022 fiscal. The company said that global supply chain disruptions are affecting its business more than expected. 

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The forced temporary closures of Nike’s manufacturing units in Vietnam and Indonesia to help slow the spread of the virus in those countries has affected Nike’s business at large. Most of the latest inventory is unavailable at Nike stores.

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In its first quarter that ended August 31, Nike reported sales of $12.2 billion and earnings per share of $1.16. The supply chain disruptions are expected to affect the company’s gross profit margins for the rest of the fiscal year.

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Nike said that labour shortages at ports are delaying turnaround times for ships carrying large quantities of merchandise and it takes twice as long to get inventory from its manufacturing facilities to North America as before the pandemic. The costs to move inventory between its manufacturing facilities to wholesale partners and customers have increased.

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Because these effects will persist for at least the rest of its fiscal 2022, management lowered expectations for critical metrics for the next quarter and the rest of the year.

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The company said: “We now expect fiscal 22 Revenue to grow mid-single digits versus the prior year, versus our prior guidance of low-double-digit growth, due solely to the supply chain impacts that I just described. Specifically, for Q2, we expect revenue growth to be flat to down low single digits versus the prior year, as factory closures have impacted production and delivery times for the holiday and spring seasons. Lost weeks of production combined with longer transit times will lead to inventory shortages in the marketplace for the next few quarters.”