Customers lined up outside the Nike flagship store on the opening day at Wangfujing Street in January in Beijing, China.
  • Nike shares lost 5% early Thursday following calls in China for a boycott of its products.
  • Backlash against Nike was sparked after the company said it would not use materials from the disputed Xinjiang region.
  • A Nike statement highlighted reports of forced labour of Uyghurs, a Muslim ethnic minority in China.
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Nike shares dropped Thursday as the company faced calls for boycotts and received backlash on social media sites in China over the company's statement that it would not use cotton from a disputed region.

The sportswear company in a statement highlighted reports of forced labor of Uyghurs, a Muslim ethnic minority, in the Xinjiang Uyghur Autonomous Region. Nike said it does not source products from the region and that it has "confirmed with our contract suppliers that they are not using textiles or spun yarn 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, Insider reported.

Shares fell as much as 5.1% to $126.30 before the opening bell. The stock has fallen by nearly 6% so far this year but has gained 68% in the past 12 months.

Nike's statement was not dated but was published after the US, the European Union, Britain, and Canada this week imposed sanctions on Chinese officials over human rights violations in Xinjiang. China responded with sanctions on European institutions and lawmakers.

In fiscal year 2020, the Greater China area made up 19% of Nike brand revenue. Revenue from the region rose by 8% to $6.68 billion in fiscal 2020 from fiscal 2019, according to the company's annual report.

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