Nike Inc. reported a drop in its stockpile of inventory — a sign the company is making progress in moving out older merchandise for newer, more-profitable items. The shares rose in late trading.

Inventory fell 10% from a year earlier to $8.7 billion, which was a bigger decline than analysts expected, according to estimates compiled by Bloomberg. Revenue of $12.9 billion for the quarter ended Aug. 31 was just short of Wall Street’s average estimate, while gross margin, a key gauge of profitability, was higher than expected.

Nike has been offering discounts to get excess merchandise off of store shelves — a move that erodes profitability. The decline in inventories is a sign that tighter management is paying off. Earnings per share of 94 cents outpaced expectations.

Revenue fell 2% in North America, the sportswear giant’s home market, just below expectations. Sales in the Greater China region cooled as well, with growth of 4.8% falling short of estimates.

The shares rose 1.1% at 4:35 p.m. in after-market trading in New York. The stock has dropped 23% year-to-date through Thursday’s close.