Inventory write-downs reduce profit. They do not release cash.
A lower inventory value can arrive before any goods are sold. Nike, Gap and lululemon filings help separate the accounting charge from cash collection.
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Nike’s direct sales fell. What does the checkout choice cost?
Nike’s direct and wholesale sales moved at different speeds. Its accounts, alongside DICK’S and lululemon, show why choosing a channel does not settle the margin question.
A 50% markup is a 33⅓% margin. The discount changes both.
The difference between markup and gross margin starts with the denominator. A small worked example shows why a discount can cut gross profit much faster than sales.