Analysis: Inventory levels in the sporting goods industry, Q1 2025

• Aggregate inventories in Q1, ended March 31, were up more than 5.5 percent year-over-year but were down more than 4.6 percent from Q4 2024.

• The geographic “hot spots” for sporting goods/footwear/apparel inventories today are the US and Greater China. Nike, which reported flat year-over-year inventory at the end of its Q4 on May 31, said its levels in EMEA were slightly ahead of target, with inventory dollars flat and units down by mid-single digits year-over-year. Still, the company had higher inventory dollars and units at period-end, prompted by investments to support new distribution, unfavorable shipment timing and new tariffs. 

• Eight companies (Adidas, Amer Sports, Garmin, Lululemon, Mizuno, On Holdings, Puma and Skechers) had a double-digit year-over-year increase in their inventory totals. Five (Canada Goose, GoPro, Allbirds, Peloton and Wolverine Worldwide) had a double-digit drop in their year-over-year inventory levels. Four (Acushnet, Crocs, Fox Factory and Thule Group) had flat year-over-year inventory levels in euros.

Trump tariffs still create uncertainty 

Despite diligent efforts to diversify supply chains and reduce inventory levels over the last four years, most sporting goods firms remain in a quandary over the ongoing uncertainty with US-imposed tariffs under President Trump. If the final levies on imports from key countries come in high, stockpiling inventory will be seen as a smart move. However, if final tariff rates are low, such a strategy could prove a costly error.

On April 2, the Trump Administration announced steep tariffs on more than 60 nations in a bid for a more balanced trade landscape. Recently, he announced a 50 percent tariff on goods from Brazil and said he would impose 30 percent tariffs on US imports from Mexico and the European Union on Aug. 1.

According to economists at Goldman Sachs, importers and manufacturers outside the US have borne approximately 40 percent of the tariffs’ costs to date this year, and US consumers have paid about 20 percent in the form of higher prices.

Sportsman’s Warehouse, a US outdoor specialty chain, announced in early June that it was pulling forward holiday and hunting season merchandise in key, tariff-impacted categories. Earlier this year, the retailer frontloaded $20 million worth of hunting, fishing and camping products to avoid potential higher tariff impacts. Rocky Brands, meanwhile, created a seven-month inventory buffer earlier this year to shift more of its sourced footwear production away from China. And Nike intends to reduce its reliance on China for US production to less than 10 percent from 16 percent in its most recent fiscal year.

In early May, Goldman Sachs suggested that Q1 data did not reflect any widespread inventory buildup and reported that the largest declines in the S&P 500 inventory-to-sales ratio included the apparel and consumer durables industries. At the same time, Bank of America opined that US retail inventory levels may be “lean” in the coming months, since retailer payments to transportation and shipping companies did not suggest a big escalation this past spring.

More vendors and US retailers of footwear, apparel and sporting goods are preparing for tariff-inspired higher prices by reducing their SKU assortments and purchasing more core items. One California-based shoe chain, for example, is warehousing more core styles and trimming size ranges.

Companies discuss inventory during earnings calls

• During its most recent earnings’ announcement, Deckers’ executives said it intended to bring Hoka inventory into the US “a little bit early” ahead of the back-to-school and holiday seasons.

• Crocs, meanwhile, said it was mindful that any incremental tariffs would lift its average unit costs.

• For its part, Nike intends to continue liquidating excess inventory through November through its value store and value chain partners. But the company anticipates modest revenue headwinds during H2, ending next May, as it reduces its aggressive clearance activity.

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