Nike has warned that prices are likely to rise in the second half of its financial year as the brand bids to offset increasing costs in its supply chain.

The sportswear titan said rises at the shelf edge would come as a result of the higher transportation, logistics and air freight costs required to meet demand during the golden quarter. 

Supply chain issues have plagued retailers across the globe during the coronavirus crisis with congested ports and factory closures hammering the usual flow of products. Those challenges were impacted further by the blockage of the Suez Canal in March. 

All of Nike’s footwear factories in Vietnam remain closed under the government’s Covid-19 restrictions, sparking a 10-week slowdown in production, according to Forbes.

Nike therefore only expects single-digit sales growth in the second half of its fiscal year. Analysts had previously pencilled in a double-digit increase. 

Nike’s warnings came as the brand unveiled a jump in profits during the three months ending August 31, the first quarter of its financial year. 

The business said earnings before interest and taxes climbed 22% to $2.16bn (£1.6bn) during the period, as sales grew 16% to $12.25bn (£8.94bn). 

Nike’s cost of sales increased at a similar rate, rising 12% to $6.55bn (£4.78bn) compared to the same period a year ago. 

The brand has been focusing on selling a greater proportion of its products directly to consumers to boost its margins. Sales made through its own stores and ecommerce website were up 25% during the quarter as it made further progress against that strategy. 

Digital sales accounted for a fifth of Nike’s total sales during its first quarter. It wants digital to represent 40% of its total revenues by 2025.

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