There is growing conviction among US companies that inventory destocking is working, thinning stockpiles of goods built up in 2022 — but just not fast enough. “The peak of inventory is behind us,” Harmit Singh, chief financial and growth officer of apparel maker Levi Strauss & Co., told Wall Street analysts during a July 6 quarterly earnings call. The clothing maker expects to end the year with inventories below 2022 levels. On a broad level, however, destocking is not happening rapidly. Early second-quarter earnings reports paint a picture of gradual inventory reduction and ongoing adjustment, with inventories still high in many sectors.

“We are seeing that retailer inventory rebalancing has largely normalized following the significant adjustments affecting nearly all consumer discretionary categories over the past year,” Julien Mininberg, CEO of consumer goods manufacturer Helen of Troy, said during an earnings call Monday. “Our retail partners are now increasingly matching their orders to consumer demand,” Mininberg said. Footwear maker Nike referred to a “normalizing supply chain” in which it is carefully managing US inventory — by which it means limiting the availability of inventory.

“Our inventory levels are ahead of our plan and ahead of the competition,” Nike CFO Matt Friend said during a June 29 earnings call. “The large majority of our strategic partners have also done a beautiful job moving through the inventory.”

But wholesalers struggling with flagging consumer demand are having trouble reducing inventories.

US retail, manufacturing and wholesale: sales to inventory (BTS)

Ratio of US retail end-of-month inventories to monthly sales. A ratio of 2.5 indicates retail stores have enough merchandise on hand to cover 2.5 months of sales.