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Nike’s Inventory Glut Sends Stock Down the Most in 20 Years

  • Apparel maker facing ‘intense margin pressure,’ analyst says
  • Gross margin misses estimates on markdowns, freight costs
Bloomberg business news
Breaking Down Nike's First-Quarter Earnings
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Nike Inc. shares tumbled the most in more than two decades after a glut of unwanted merchandise eroded the sportswear giant’s profitability.

North American inventories surged 65% in the fiscal first quarter ended Aug. 31, and resulting markdowns caused gross margin to miss Wall Street’s expectations. The retailer also cited higher freight costs and foreign-exchange effects in its earnings report, released late Thursday, and downgraded its outlook for the full year.