Nike (NKE) stock has been hammered over the past year, but one analyst thinks that the sneaker giant's inventory troubles could be receding.

"We are in the beginning of a sneaker supercycle," Omar Saad, managing director at Evercore ISI said on Yahoo Finance Live (video above). "People are wearing sneakers more. They're wearing through sneakers more. Their feet are absolutely used to the comfort that sneakers and other comfortable footwear bring during COVID and are hesitant to go back to uncomfortable dress shoes on a daily basis just for special occasions."

And according to Saad, Nike "is the best-positioned company to take advantage of this massive sneaker supercycle."

Over the last two decades, Nike stock has consistently outperformed the S&P 500 and has been a bellwether of sorts for the retail industry. However, shares of the apparel giant have plunged 45% year to date, badly lagging the 21% decline in the S&P.

While a demand boost could give Nike a needed lift, it remains to be seen if it can outweigh the supply pressures from the inventory-riddled retail industry.

"We think there's gonna be a really, really tough holiday [season], and part of this is really about the forward 2023 purchasing behavior in the wholesale channel," Adrienne Yih, managing director at Barclays, told Yahoo Finance. "Nike still has about 55% in the wholesale channel even though they're making great strides in moving to [direct-to-consumer]. So that's sort of the crux of kind of the near to medium term."

Nike's performance this holiday season may rest in the hands of its biggest household names. The latest shoe from LeBron James's signature collection, the LeBron XX, is expected to be released just before the start of the NBA season. And in December, a cyclical blitz of Jordan brand retro products is set to drop, which has led fans to brave cold weather and camp outside stores in years past.

Beyond inventory calculus, sneaker brands have been navigating a faltering reopening in China, a key region contributing to sales growth.

Nike sales in Greater China missed estimates in the latest quarter as COVID-19 lockdowns continued to weigh on the business.

"In Q4, revenue declined 20% on a currency-neutral basis and EBIT declined 55% on a reported basis," Nike Chief Financial Officer Matt Friend said in the Q4 earnings call in June. "This follows the region's most widespread COVID disruption since 2020, impacting over 100 cities and over 60% of our business."

The revenue decline could be 'a short- to medium-term COVID transitory issue,' Yih said, but it also could be early evidence of a consumer preference for domestic brands in China.

Nike and other brands targeting expansion in China, such as Adidas (ADDYY), Under Armour (UA), and Lululemon (LULU), have faced greater competition from domestic brands such as Li-Ning and Anta, which have experienced revenue growth and increasing market share.

"If you look at their first-half yearly numbers, Li-Ning was up 22%," Yih said. "Anta was taking share of 14% in the market. You compare that to Adidas, down 35%, and then, for the first half of the year that we know of, from Nike, down 12%. And so we think that this is a very sort of uncertain time period."

Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.

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