Aug 24, 2023 - Economy
Nike's shares crater as sneaker inventory piles up post-pandemic
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Painful pandemic-era inventory shortages of consumer goods have reversed and, in some cases, become painful gluts.
The big picture: Take sneakers. Factory shutdowns from Vietnam to China in 2020 and 2021 severely pinched supply — and the scarcity sent prices soaring.
- But it wasn't too long before pileups of late deliveries had shoe companies like Nike and Adidas sitting on mountains of excess inventory.
- Nike, for its part, is still trying to move some of that glut — a process that's taken longer than some analysts expected — and markdowns have been the name of the game.
The latest: The inventory stockpiles are one reason Nike's shares have cratered this year, even as the overall stock market recovered.
- Nike stock this week hit a milestone no exec wants to see: Tuesday was its ninth consecutive day of losses, making it the company's longest losing streak since it went public in 1980, Bloomberg reports. (It was down again Wednesday.)
- The latest bad vibes came from earnings reports by Nike sellers Dick's Sporting Goods and Foot Locker — both cited excess inventories, among other issues.
The bottom line: Early in the pandemic, Americans binged on activewear and goods of all kinds, no matter the price. Now, there's less demand, as people look to spend money on experiences.
