Nike CEO says the sports giant is a “Chinese brand and a call for revenue”
Nike’s CEO said in a recent earnings announcement that the company is a “Chinese brand” and defends its position in the country.
Comments are made months after a sportswear apparel company was involved in a controversy over alleged human rights abuses in the country.
This week, CEO John Donahoe gave the company a quarterly earnings report. He was asked by an analyst about the company’s plans in China.
“We have been in China for over 40 years, but in the early days we still spent a lot of time and energy in China. Today we are the biggest sports brand in China and the Chinese brand. And for China, “Donnaho replied. According to a transcript published by Nasdaq.
“We will continue to invest in China for a long time,” Donaho added later.
At the time of the earnings announcement, it was revealed that the country’s fourth-quarter earnings increased by 9% on a currency-neutral basis.
President and CEO John Donahoe made a comment in China in a recent earnings announcement
In addition, the company has achieved double-digit domestic growth for the seventh consecutive year.
Despite growth, sales in Greater China actually failed to meet Wall Street expectations last year.
Revenues in the region were $ 1.93 billion, up 17% year-on-year, but analysts expected that number to be about $ 2.25 billion, Fox Business reports.
In total, Nike reported a 96% increase in total revenue from last year, reaching up to $ 12.34 billion. The company’s betting revenue was $ 1.5 billion.
In North America, sales increased 141% year-on-year to a record of $ 5.38 billion on the continent.
Due to the company’s strong performance, stock prices on the stock market rose 15.38% on Friday.
The stock closed at Nike’s new record of $ 154.35.
China no longer seems to be the driving force behind Nike’s recovery in COVID-19, but analysts don’t expect sales growth in the region to slow any further.
“Nike is a long-term outperformer in our view,” said UBS analysts Jay Sole and Mauricio Serna.
People are walking by the Nike store in Beijing, China. The company’s CEO recently stated that Nike is “a Chinese brand and a brand for China.”
Earlier this year, Nike was one of the companies accused of using forced labor to procure supplies from factories in a report on China.
Tens of thousands of Uighur Muslims were transferred to factories across the country to work, according to a report by the British Conservative Human Rights Commission.
The report states that one of the “most shocking new developments” over the last five years is “the current use of forced labor throughout China at factories that are part of the supply chain of major international companies.” Said there is.
It continued:’Under conditions strongly suggesting forced labor, Uyghurs worked in factories in at least 83 well-known global brand supply chains in the technology, garment and automotive sectors, including Apple, BMW, Gap and Huawei. I am. , Nike, Samsung, Sony, Volkswagen.
Vicky Xiuzhong Xu and Nathan Ruser, authors of the Australian Strategic Policy Institute’s (ASPI) report on Uighur forced labor, submitted evidence to the Commission in an online hearing.
They said they discovered in 2019 that Uighurs were transported from the Xinjiang Uighur Autonomous Region to other states to work.
“It’s a central government policy,” Xu and Ruser said, resulting in “tens of thousands of people being expelled from their homes each year and sent to eastern states to work in international brand supply chains. I did. “
They had workers exposed to forced labor conditions in the factory, had to work “under close scrutiny”, and had a few hours of free time attending “Mandarin and political indoctrination classes”. I had no choice but to do it. “
ASPI has identified 27 factories in nine states in China that use Uighur workers transferred from the Xinjiang Uighur Autonomous Region since 2017.
“We will continue to invest in China for a long time,” Donnaho (right) added during the call.
Nike replied: “I am concerned about reports of forced labor in the Xinjiang Uygur Autonomous Region (XUAR) and related reports.
“Nike has not sourced products from XUAR and has confirmed to its contracted suppliers that it does not use textiles or spun yarn in the region.
“Nike’s Code of Conduct and Code Leadership Standards have requirements to ban all types of prisons, forced labor, detained labor and indentured servitude, including detailed provisions on freedom of movement and the prohibition of discrimination based on ethnic background or religion. There is. “
According to the transcript, the dispute was not addressed during the revenue call.
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