Sportswear Supply Chain in Crisis: Goldman Sachs Reports Mixed Orders, Index at COVID-Era Lows

The global sportswear supply chain is flashing deep bearish signals, with a key industry index now trading at COVID-era lows. The S&P 500 Textiles, Apparel & Luxury Goods index, which tracks giants like Nike and Lululemon, is down 15% year-to-date and a staggering 65% from its 2021 peak, underscoring a prolonged and severe downturn in sentiment across the sector.

Goldman Sachs analysts, led by Michelle Cheng, detail the pressure in their latest industry read. Their report reveals a mixed and concerning picture for major Asian sportswear manufacturers' March orders. While Eclat outperformed its peers, and Makalot and Yue Yuen delivered in-line Q1 results despite holiday pressure in Indonesia, other key players are struggling. Feng Tay reported continued year-on-year order declines, and Huali posted muted first-quarter orders, indicating persistent softness in demand.

The latest earnings season and outlook for apparel in 2024 remain mixed at best, according to the analysis. Cheng explicitly notes that rising geopolitical tensions are beginning to add another layer of risk and uncertainty to an already fragile global supply chain, complicating recovery prospects for the entire industry.