Nike’s Stock Falls 12% On News Of Overstocked Inventories

Shares of Nike (NKE) are down 12% after the sneaker and apparel company reported
overstocked inventories and outlined the steps it needs to take to lower them.

As delivery times and consumer demand rose this year, Nike responded by ordering inventory
earlier than usual. When in-transit shipping times suddenly improved rapidly over the summer, it
left Nike with excess inventories, the company said.

Nike’s inventory in North America alone grew 65% in recent months, reflecting a combination of
late deliveries and early holiday orders.

In its first fiscal quarter, Nike said its total inventory level rose 44% to $9.7 billion U.S. from the
same time period last year. To unwind the excess inventory, Nike said it will discount prices on
merchandise and offer promotions.

News of the overstocked inventories came along with Nike’s latest quarterly results, which
showed that the Beaverton, Oregon-based company earned 93 cents U.S. a share versus 92
cents U.S. that was expected on Wall Street.

Revenue in the quarter totaled $12.69 billion U.S. compared to $12.27 billion U.S. expected by
analysts who cover the company.

Prior to today, Nike’s stock had fallen 42% this year to trade at $95.33 U.S. per share.