Trying to do it: Nike is struggling in China, with COVID and consumer tastes

6/28/22 8:00PM

Trying to do it‍

Nike is still having a tough time in China.

In its latest set of results, Nike reported that sales in Greater China had fallen almost 20%, as COVID disruptions continue to play havoc on parts of the country's supply chain. That result, plus a cautious outlook for the coming quarter, sent Nike shares down 7% yesterday, wiping more than $11bn from the company's market cap.

But Nike can't blame everything on COVID. Indeed, there is an increasing amount of evidence that Chinese consumers are starting to turn away from western apparel companies, towards homegrown brands like Anta, Li-Ning, and Xtep. Front Office Sports reports that for the year ending January 31, 2022, domestic Chinese brands saw sales grow by 17% while foreign brands saw sales decline by 24%.

Endless growth in China is no longer a certainty for Nike and other western consumer brands — even if COVID and supply chain disruption is fully resolved.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.