Nike pays high price for $400m i2 supply chain system

Nike will miss its annual sales target by up to $100m after a new supply chain management system, installed by i2 technologies, botched stock control quantities.

Nike issued a profit warning at the close of trading yesterday, and said fiscal third quarter profit will miss forecasts by $80m to $100m due to falling US sales and glitches in the new $400m system. i2 was later named by Nike as the technology supplier. Problems with the new system meant there were severe shortages of some products, while others were overstocked. Profit for the quarter, ending Wednesday, was expected to be 53 cents a share. That forecast has now been reduced to between 34 and 38 cents a share. In a conference call with investors yesterday, Philip Knight, CEO of Nike, said: "This is not a particularly fun hour for me. My immediate reaction is 'this is what we get for our $400m.'"