Nike's Inventory Cleanup: A Short-Term Pain for Long-Term Gain

Nike's inventory cleanup is underway to clear slower-moving products and create room for newer offerings. The company is tightening inventory purchases, reducing future sell-in, and adjusting wholesale order books in response to weak demand in Sportswear and Jordan Streetwear.

In Europe, Middle East, and Africa (EMEA), Nike sharply reduced promotional activity, resulting in a more than 50% decline in its off-price business and a 15-point improvement in full-price realization. The company is also taking actions to reduce supply and accelerate the liquidation of excess inventory.

Nike Sportswear plans to launch over a dozen new footwear styles designed around distinct consumer needs and experiences. While these initiatives are expected to strengthen the business, management noted that it will take time for the new products to scale and deliver consistent results.

The company anticipates fiscal 2027 revenues to decline in the low- to mid-single-digit range as it prioritizes healthier inventory levels and a more balanced marketplace. However, the benefits of these initiatives are expected to take time to materialize as Nike continues to address elevated inventory and weak demand in certain markets.