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Nike Inventory Turnover: The 2022 Glut and the Long Destock
Nike, Inc. (NKE) reported 3.5x inventory turnover in fiscal 2026 (year ended May 31, 2026), a typical footwear-and-apparel result. The interesting number is the round trip: the fiscal 2022 inventory glut cut turnover to 3.3x, and the markdowns that cleared it cost gross margin, not turns. All figures from the company 10-K filings on SEC EDGAR.
Quick answer: Nike's fiscal 2026 turnover, and the fiscal 2022 glut low
Fiscal 2026 (latest 10-K)
3.5x for the year ended May 31, 2026. $26.49B cost of sales over roughly $7.50B average inventory ($7.49B opening, $7.50B closing). About 103 days of inventory on hand.
Fiscal 2022 (the glut low)
3.3x for the year ended May 31, 2022. $25.23B cost of sales over roughly $7.64B average inventory, with year-end inventory up 23% to $8.42B. About 111 days on hand, the slowest in the window.
Turnover = cost of sales / average inventory (mean of opening and closing balance-sheet inventory). Days on hand = 365 / turnover. Figures taken from Nike's 10-K filings on SEC EDGAR (CIK 0000320187), verified August 2026.
FY22 - FY26 turnover history
| Fiscal Year | Cost of sales | Inv (start) | Inv (end) | Turnover | Days on hand |
|---|---|---|---|---|---|
| FY22 (ended May 31, 2022) | $25.23B | $6.85B | $8.42B | 3.3x | 111 |
| FY23 (ended May 31, 2023) | $28.93B | $8.42B | $8.45B | 3.4x | 106 |
| FY24 (ended May 31, 2024) | $28.48B | $8.45B | $7.52B | 3.6x | 102 |
| FY25 (ended May 31, 2025) | $26.52B | $7.52B | $7.49B | 3.5x | 103 |
| FY26 (ended May 31, 2026) | $26.49B | $7.49B | $7.50B | 3.5x | 103 |
Turnover rounds to one decimal; days-on-hand carries the finer trend. The window low was fiscal 2022 (3.3x, 111 days) as the glut built; the high was fiscal 2024 (3.6x, 102 days) once the destock landed.
What the glut looked like
Coming out of the pandemic, factory closures and shipping delays stretched Nike's lead times. Nike ordered earlier and heavier to protect availability, and then the delayed shipments arrived late and all at once. Year-end inventory rose from $6.85B in fiscal 2021 to $8.42B in fiscal 2022, and Nike disclosed that a large share of the increase was units in transit. Because average inventory climbed faster than cost of sales, turnover slipped to 3.3x, the slowest in the five-year window, and days on hand rose to about 111.
Clearing it cost margin, not turns
Nike marked down and promoted through fiscal 2023 to move the excess. Turnover actually improved that year to 3.4x, because cost of sales jumped to $28.93B on higher volume even as year-end inventory held near $8.45B. The real cost is in the margin line: gross margin fell from 46.0% in fiscal 2022 to 43.5% in fiscal 2023. By fiscal 2024 the destock had landed, inventory was back to $7.52B, and margin recovered to 44.6%.
Turnover barely moved; gross margin did
Read only the turnover column and the 2022 glut looks like a minor wobble, from 3.6x down to 3.3x and back. The damage is in the gross-margin column, where the markdowns needed to clear the excess show up plainly. This is the practical warning for any retailer benchmarking on turnover alone: an over-ordering episode can leave the ratio almost unchanged while quietly eating the margin used to clear the stock.
| Fiscal Year | Revenue | Cost of sales | Gross margin |
|---|---|---|---|
| FY22 | $46.71B | $25.23B | 46.0% |
| FY23 | $51.22B | $28.93B | 43.5% |
| FY24 | $51.36B | $28.48B | 44.6% |
| FY25 | $46.31B | $26.52B | 42.7% |
| FY26 | $46.40B | $26.49B | 42.9% |
Revenue and cost of sales from the same fiscal-year 10-K income statements (SEC EDGAR, CIK 0000320187); gross margin = (revenue - cost of sales) / revenue. Margin dipped in fiscal 2023 on glut-clearing markdowns and again in fiscal 2025 during the strategic reset.
What benchmarking against Nike teaches
Nike is a useful benchmark precisely because its turnover is so stable while everything underneath it moved. Three lessons carry over to any seasonal branded retailer:
- Turnover hides over-ordering. The ratio held in a narrow 3.3x-3.6x band through a glut and a full destock. Watch year-end inventory dollars and units-in-transit, not just the turn.
- The cost of excess is a margin event. Clearing overstock is done with markdowns, so it shows up in gross margin, weeks or quarters after the inventory itself peaks. Pair turnover with a margin trend to see it.
- Lead time sets the floor. Long ocean lead times and seasonal ranges keep branded athletic footwear in the low-single-digit turnover band. A 3.5x turn is healthy here and would be a crisis for a grocer.
Compare your own ratio to the footwear and apparel sector band, not to a blended retail-wide average or to a high-velocity grocer. For Nike the more actionable question than "why only 3.5x" is "how much margin does an inventory mistake cost, and how long to earn it back."
Frequently asked questions
What is Nike's inventory turnover ratio in fiscal 2026?
Nike turned its inventory 3.5x in fiscal 2026, the year ended May 31, 2026. That is $26.49B of cost of sales divided by roughly $7.50B average inventory (the mean of the $7.49B opening and $7.50B closing balances) from its 10-K, about 103 days of inventory on hand. Turnover has held near 3.5x since the fiscal 2022 inventory glut cleared.
How did the 2022 inventory glut affect Nike's turnover?
Nike's inventory jumped from $6.85B at the end of fiscal 2021 to $8.42B at the end of fiscal 2022, a 23% rise driven by pandemic-era supply-chain whiplash: Nike ordered ahead as lead times stretched, then the goods arrived late and bunched. Average inventory rose faster than cost of sales, so turnover fell to 3.3x (about 111 days on hand), its slowest in the FY22-FY26 window. It then recovered to 3.6x by fiscal 2024 as the excess was cleared.
What did it cost Nike to clear the excess inventory?
The cost shows up in gross margin, not turnover. Nike marked down and promoted heavily to move the glut, and gross margin fell from 46.0% in fiscal 2022 to 43.5% in fiscal 2023. Margin recovered to 44.6% in fiscal 2024 as the destock finished, then compressed again to 42.7% in fiscal 2025 amid a broader strategic reset. The episode is a clean example of why turnover alone understates the damage of over-ordering: the ratio barely moved, but roughly two-and-a-half points of margin did.
How is Nike's inventory turnover calculated from the 10-K?
Divide cost of sales by average inventory, where average inventory is the mean of the opening and closing balance-sheet inventory for the fiscal year. Both figures come from Nike's 10-K on SEC EDGAR (CIK 0000320187); Nike reports inventory as a single Inventories line and tags cost of sales as CostOfGoodsAndServicesSold in its XBRL data. Nike's fiscal year ends May 31.
Is Nike's turnover typical for footwear and apparel?
Yes. At 3.5x, Nike sits around the middle of the footwear band. On recent 10-Ks, Crocs turns about 4.6x, Foot Locker 3.7x, Nike 3.5x and Skechers 2.4x. Branded athletic footwear turns in the low-single digits because seasonal ranges, wide size and colour matrices, and long ocean lead times all slow SKU-level velocity.