Nike Faces Market Challenges and Opportunities
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2026
0mins
Source: NASDAQ.COM
- Market Share Competition: Nike's stock has fallen 15% over the past year, and while it remains the leader in athletic apparel, emerging competitor On Holding is rapidly gaining traction, highlighting fierce competition for market share.
- Revenue and Profit Pressure: In the second quarter of fiscal 2026, Nike's revenue remained flat year-over-year with wholesale revenue up 8%, but tariffs impacted margins, causing a 3 percentage point drop in gross margin, indicating profit pressures.
- Rapid Growth of On Holding: On Holding's sales increased by 35% year-over-year in the second quarter, with apparel and accessories sales more than doubling, indicating strong brand recognition, while gross margin widened from 60.6% to 65.7%.
- Investor Choices: Value investors may prefer Nike, while growth investors might opt for On Holding, which has an enterprise value to EBITDA ratio of 27, comparable to Nike, reflecting its high growth potential.
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Analyst Views on NKE
Wall Street analysts forecast NKE stock price to rise
21 Analyst Rating
14 Buy
7 Hold
0 Sell
Moderate Buy
Current: 44.630
Low
62.00
Averages
76.11
High
110.00
Current: 44.630
Low
62.00
Averages
76.11
High
110.00
About NKE
NIKE, Inc. is engaged in the designing, marketing and distributing of athletic footwear, apparel, equipment and accessories and services for sports and fitness activities. The Company's operating segments include North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA). It sells a line of equipment and accessories under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment designed for sports activities. It also designs products specifically for the Jordan Brand and Converse. The Jordan Brand designs, distributes and licenses athletic and casual footwear, apparel and accessories predominantly focused on basketball performance and culture using the Jumpman trademark. The Company also designs, distributes and licenses casual sneakers, apparel and accessories under the Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Inventory Challenges: With inventories still elevated at $7.5 billion, Nike faces challenges in demand recovery, particularly as direct sales revenue dropped 4% to $4.5 billion, suggesting a shift in consumer preference towards wholesale channels.
- Market Performance Discrepancies: Despite overall struggles, Nike's wholesale revenue rose 5% to $6.5 billion, indicating demand in certain markets, yet Greater China revenue fell 10%, with expectations of a 20% decline in the upcoming quarter, posing significant hurdles to the company's growth strategy.
- Technical Trend Analysis: Nike's stock has broken below a long-term downward channel, reflecting market concerns about future risks, and will need to reclaim the lower boundary and approach the 20-day EMA at $52.77 to improve the technical outlook, with the current trend remaining bearish.
See More
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- Amazon Sales Recovery: Amazon's online store achieved $269 billion in sales for 2025, reflecting a 9% year-over-year increase, indicating a rebound after a sluggish period, with advertising, subscription, and cloud services also contributing to a total revenue growth of 12% to $716 billion.
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- On Holding's Growth Momentum: On Holding's Cloud footwear line has quadrupled its annual revenue since 2021, with a 23% year-over-year revenue increase last quarter and a record gross margin of 64%, highlighting its strong pricing power even amid weak consumer spending.
- Nike's Challenges: Nike's stock has fallen about 70% from its peak, yet many companies in the retail sector continue to post relatively strong financial results while facing macroeconomic pressures, suggesting that investors should focus on businesses with multiple growth engines.
See More
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- Nike's Stock Decline: Nike's (NKE) stock has fallen about 70% over the past few years, primarily due to self-inflicted issues and softer consumer spending, which has pressured sales and negatively impacted share performance.
- Amazon's Market Leadership: Amazon (AMZN) became the top apparel seller in 2018, and in 2025, its online store sales rose 9% year-over-year to $269 billion, showcasing its robust fulfillment network and AI technology that enhance customer loyalty and drive sales growth.
- Lululemon's International Expansion: Lululemon (LULU) has shown strong performance in international markets, particularly in China where revenue grew 24% year-over-year, contrasting with Nike's 7% decline in the same region, indicating Lululemon's effective localization strategy and significant long-term growth potential.
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See More
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- Investment Risk Comparison: Investing in individual stocks like Nvidia can yield substantial returns, but it also carries the risk of significant losses, as seen with Nike's value halving, highlighting the volatility associated with single-stock investments, whereas broad market ETFs mitigate this risk through diversification, offering a steadier path to long-term wealth accumulation.
- Advantages of Market ETFs: By choosing broad market ETFs such as the Vanguard S&P 500 ETF (VOO) or Vanguard Total Stock Market ETF (VTI), investors benefit from an expense ratio as low as 0.03%, while also enjoying a portfolio that automatically adjusts with economic changes, thus avoiding the pitfalls of holding stocks that may lose influence over time.
- Investment Strategy Recommendation: While stock picking has its place in a diversified portfolio, establishing broad market ETFs as the foundation can effectively reduce risk and enhance the stability of long-term returns, making it a sensible choice for most investors.
See More
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- Active Fund Performance: Over the past decade, 95% of actively managed large-cap core funds have underperformed the S&P 500 after fees, indicating a widespread failure of active management strategies and prompting investors to shift towards low-cost index funds to mitigate risks.
- Index Fund Advantages: Research shows that 79% of large-cap domestic equity funds underperformed the S&P 500 in 2025, further validating the rationale for investors to choose broad market ETFs to achieve market-matching returns.
- Investment Risk Comparison: Investing in individual stocks carries a risk spectrum from success to failure, while opting for broad market ETFs effectively diversifies risk, as the diversity of the portfolio minimizes the impact of any single stock's volatility on overall returns.
- Long-Term Wealth Growth: By investing in broad market funds like the Vanguard S&P 500 ETF, investors can achieve more stable long-term wealth growth amid economic changes, as the overall volatility tends to be lower despite market experiencing bull runs and corrections.
See More
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- Strong Jobs Report: The U.S. March jobs report exceeded expectations, propelling the Nasdaq Composite up 4.4%, the S&P 500 by 3.3%, and the Dow Jones by 2.9%, indicating renewed investor confidence in economic recovery.
- Oracle Layoff Plan: Oracle plans to cut 20,000 to 30,000 jobs, potentially generating $8 billion to $10 billion in free cash flow, although restructuring costs may reach $2.1 billion, primarily for severance, reflecting a strategic shift in its cloud market positioning.
- Tesla Delivery Figures: Tesla delivered 358,023 vehicles in Q1, falling short of the 365,000 estimate but marking a 6.2% year-over-year increase, demonstrating strong demand despite challenges from the expiration of EV tax credits.
- Nike Earnings Warning: Nike forecasted a 2% to 4% decline in Q4 sales, missing the consensus estimate of a 1.9% increase, with a significant 20% revenue drop expected in Greater China, highlighting competitive pressures and consumer weakness.
See More
