Nike stock price drops on Chinese reaction to Uyghur comments

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  • Nike shares fell 5% on Thursday following calls in China to boycott its products.
  • The backlash against Nike was sparked after the company said it would not use materials from the disputed Xinjiang region.
  • A statement from Nike brought to light reports of forced labor by Uyghurs, a Muslim ethnic minority in China.

Shares of Nike fell on Thursday as the company faced boycott calls and received backlash on social media sites in China following the company’s statement that it would not use cotton from a contested region.

The sportswear company highlighted in a statement reports of forced labor by Uyghurs, a Muslim ethnic minority, in the Xinjiang Uyghur Autonomous Region. Nike said it does not source products from the region and has “confirmed with our contracted suppliers that they do not use textiles or spun yarns from the region.”

The statement sparked a backlash in China, with videos circulating on Chinese social media sites of people burning their Nike Air Jordans and Air Force 1s, Reported Insider.

The shares fell 5.3% to $126 apiece, then narrowed the loss to 3.5%. The stock has fallen around 9% so far this year, but has gained 53% over the past 12 months.

Nike’s statement was undated but came after the United States, European Union, Britain and Canada this week imposed sanctions on Chinese officials for human rights abuses in Xinjiang. China has responded with sanctions against European institutions and lawmakers.

In fiscal 2020, the Greater China region accounted for 19% of Nike brand revenue. Revenue in the region increased 8% to $6.68 billion in fiscal 2020 compared to fiscal 2019, according to the company’s annual report.

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