Analysis of Nike's Days Inventory: Destocking Cycle Nears End, Investment Rating 'Buy'

Based on the latest data and industry analysis, here is a detailed analysis of Nike’s inventory issues and the destocking cycle in the athletic footwear and apparel industry:

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According to the latest data, Nike’s inventory management has shown positive improvement signs [0][1]:

• August 2025
  : Nike’s Days Inventory stood at
  105.04 days
  , a decrease of approximately
  8.6 days
  compared to 113.64 days in August 2024 [0]
• Q3 FY2024
  : The company’s inventory dropped to
  $7.73 billion
  , down
  13%
  YoY, and days inventory outstanding fell to
  101.6 days
  , the lowest level since the 2021 fiscal year pandemic period [1]
• Absolute Inventory Value
  : Average inventory was $7.802 billion, and Cost of Goods Sold (COGS) was $6.777 billion [0]

Nike’s inventory crisis peaked in FY2023:

• Q1 2023
  : Inventory levels surged
  44%
  YoY, mainly due to mismatches between supply chain and channel strategies caused by demand forecasting errors [0]
• Cause Analysis
  : After significantly cutting wholesale channels, Nike lacked partners to help digest inventory, forcing it to conduct deep discount promotions in its own channels, which damaged its brand premium capability [0]

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The athletic footwear and apparel industry experienced a complete destocking cycle from 2022 to 2024 [1][2]:

Phase	Time Period	Characteristics
Inventory Overstock	2022-2023	Post-pandemic demand plummeted, supply chain disruptions, brand inventory surged
Active Destocking	2023-2024	Large discount promotions, control procurement, reduce production capacity
Inventory Stabilization	2024-present	Inventory returns to healthy levels, discount intensity narrows, gross margin rebounds

Nike’s market share is being eroded by competitors [2]:

• Adidas
  : Benefiting from the retro shoe trend like Samba, inventory issues are gradually easing
• On Running, HOKA ONE ONE
  : Emerging brands quickly seize niche markets
• Domestic Brands
  : Anta and Li-Ning perform strongly in lower-tier markets; Anta’s days inventory is only
  90 days
  , better than Nike’s 120 days (China region) [2]

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1. Nike’s inventory returns to healthy levels
   : Days inventory has dropped to around 105 days, close to pre-pandemic levels [0][1]
2. Gross margin continues to improve
   : Q3 FY2024 gross margin was
   44.8%
   , up 1.5 percentage points YoY, mainly benefiting from reduced discounts and improved supply chain efficiency [1]
3. Wholesale channel recovery
   : Nike is re-embracing wholesale partners to diversify inventory risks [3]

1. Greater China region remains weak
   : Q2 FY2026 revenue dropped
   17%
   YoY, EBIT was halved [2]
2. Low digital channel conversion rate
   : Only
   60%
   of the industry average; Tmall live broadcast sessions are far lower than domestic brands [2]
3. Market share loss
   : In lower-tier markets, domestic brands have taken nearly
   half
   of Nike’s share [2]

Time Node	Expected Progress
H1 2025	Nike’s days inventory stabilizes at 100-105 days , fully returning to normal levels
H2 2025	Gross margin is expected to further rise to 46%+ , discount range narrows
2026	Completely exit deep discount mode, restore normal pricing power

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• Consensus Rating
  : Buy (77.94% of analysts recommend Buy) [0]
• Target Price
  :
  $73.50
  , with a
  +20.6%
  upside potential from the current stock price [0]
• Price Range
  : $62.00 - $115.00

1. Macroeconomic uncertainty
   : Consumer demand may weaken further
2. Intensified competition
   : Emerging brands and domestic brands continue to seize market share
3. Supply chain cost fluctuations
   : Raw material and freight prices may rebound

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Nike’s days inventory has significantly fallen from its peak, and the

[0][1]. The company’s inventory level has returned to the lowest since the pandemic, and gross margin continues to improve, indicating that strategic adjustments are taking effect. However, , and full recovery may take until 2026.

For investors, the current valuation (P/E 35.68x) has already priced in many negative expectations. If the inventory improvement trend continues,

.

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[0] GuruFocus - Nike (NKE) Days Inventory (https://www.gurufocus.com/term/days-inventory/NKE)

[1] Southwest Securities - Nike (NKE.N) Q3 FY2024 Earnings Review (https://pdf.dfcfw.com/pdf/H3_AP202404111630141877_1.pdf)

[2] NetEase News - Is Nike Failing? Anything Is Possible (https://www.163.com/dy/article/KH7A8IT10539LXZQ.html)

[3] Yahoo Finance - Wholesale Strength vs. Digital Strain: Is NIKE’s Channel Mix Working? (https://finance.yahoo.com/news/wholesale-strength-vs-digital-strain-140500797.html)