On Thursday after the bell, Nike (NKE) will report first-quarter results, and while most analysts believe that the sportswear giant will post strong earnings, supply chain issues as a result of factory closings in Vietnam loom large.

Analysts polled by Bloomberg predict Nike will report adjusted earnings per share of $1.15 on revenue of $12.472 billion.

Over the past few months, COVID-19 cases in Vietnam have continued to rise. However, its vaccination rates have continued to lag behind its neighbors. Vietnamese government officials responded by closing down manufacturing facilities throughout the country.

The paused production at Nike footwear manufacturing sites in Vietnam caused a bit of a pullback from investors and knocked share prices off their near all-time highs of late August.

UBS analyst Jay Sole tells Yahoo Finance that Nike will have a strong quarter, but he says supply chain problems will show their mark on Q1 ’22 results.

“I do think that we’ll see an impact from the fact that a lot of the factories that they contract to make footwear in Vietnam have been closed for the last few months. It’s going to be difficult for Nike to make up that production in other factories and other places. Our expectation is that they’ll probably have to lower their top-line guidance a little bit,” he said.

“The market is very concerned about this issue, and our conversation with investors suggests this is a widely known issue. It’s being discussed all over the place. I think that everybody expects Nike to reduce their guidance by a little bit, or maybe more than a little bit because of this. So, we actually think it’s mostly in the price already,” Sole added.

“Nike’s business everywhere else in the world continues to be very strong in terms of demand. Especially in North America, in Europe, and so it should be kind of a mixed message from the quarter, but overall we think it’s mostly already priced in,” he said.

China is another potential sore spot for Nike, according to Sole. "There were issues with boycotts going back to the spring, and there's still a lingering impact from that. There's been light intermittent shutdowns because of COVID. That's probably weighing on all the sportswear companies," he said.

Sam Poser, analyst at Williams Trading, suspects that supply chain fears might be overblown. He predicts Nike’s guidance for 2022 will remain intact.

"NIKE's digital revenue increased from ~$4.5B (11.8% of sales) in FY19 to over $9B (>20.5% of sales) in FY21, and will continue to increase at a double-digit rate, and help to offset some short term noise around the impact of Covid-19 related supply chain congestion and its related costs due to temporary factory closures in southern Vietnam, port delays, and shortages of containers and trucks. We do not foresee risk to the FY22 guidance, and are confident that Nike outperform its competitors in the short and long term,” he wrote in a recent note.