Nike ‘aggressively’ clearing inventory ahead of holidays

Retail Dive

Inventory was a challenge for Nike in the quarter as some apparel arrived late and other apparel arrived early. That is driving markdowns as the retailer tries to clear out the excess, and is hitting gross margin hard. Wedbush analyst Tom Nikic noted that Nike’s gross margin decline was double the projection.

Nike’s net income also took a hit, falling 22% to $1.5 billion, but executives said they believe trimming inventory now will set the retailer up well later. Telsey Advisory Group analysts led by Cristina Fernández agreed with that take, saying in emailed comments Friday that they were “encouraged by healthy demand,” as well as Nike’s strong product pipeline and other factors.

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