Nike vs. Lululemon: Investment Comparison
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- Nike Financial Performance: In FY 2025, Nike's revenue reached nearly $46.3 billion, down approximately 9.8% year-over-year; however, it still reported a net income of about $3.2 billion, resulting in a net margin of close to 7%, indicating its ability to remain profitable in a competitive market.
- Lululemon Growth Momentum: Lululemon's revenue increased by approximately 4.9% in FY 2025, reaching nearly $11.1 billion, with a net income of roughly $1.6 billion and a strong net margin of about 14.2%, showcasing its robust performance and profitability in the premium segment.
- Risk Concentration Analysis: Nike faces significant manufacturing concentration risks, with nearly 51% of its footwear production in Vietnam, meaning any regional disruptions could impact its supply chain; conversely, Lululemon sources a large share of its materials from Taiwan and China, where recent tariff policy changes could increase costs.
- Valuation Comparison: While both companies have identical price-to-sales ratios, Lululemon's forward P/E ratio stands at 10.3x, significantly lower than Nike's 29.8x, suggesting that Lululemon may present a more attractive investment opportunity based on future earnings expectations.
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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: 47.370
Low
62.00
Averages
76.11
High
110.00
Current: 47.370
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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- Conference Call Timing: The conference call is scheduled to begin at 2:00 p.m. PT after the earnings release, with management providing a live broadcast over the Internet, ensuring that global investors can access the latest information in real-time, enhancing transparency and communication efficiency.
- Information Access Channels: Investors can access earnings releases and other financial information through NIKE's investor website, ensuring timely and accurate information, while also providing an archived version for those unable to attend the live broadcast, extending the convenience of information retrieval.
- Company Background Overview: Headquartered in Beaverton, Oregon, NIKE, Inc. is the world's leading designer, marketer, and distributor of athletic footwear, apparel, and equipment, with its subsidiary brand Converse actively expanding its market presence, further solidifying NIKE's leadership in the sports industry.
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- Technical Chart Analysis: The stock has formed a textbook downtrend over the past year, and while a recent rally suggests a short-term buying opportunity, resistance at the 50-day moving average of $145 limits upside potential, with a breakout possibly leading to $170.
- Leadership Change Impact: Incoming CEO Heidi O'Neill will officially take over in September, raising market expectations for a turnaround; however, if the stock breaks below the $120 support level, it could lead to a further decline to $80.
- Risk and Reward Assessment: The stock is at a major technical inflection point with three trading scenarios, two of which favor going long ahead of earnings; if it holds the support level, a rally coinciding with the new CEO's tenure could occur, otherwise, a stop-loss may be necessary.
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- Foot Locker Recovery: The acquisition of Foot Locker by Dick's resulted in a 0.6% comparable sales growth for the first time, with North America performing even better at 1.4%, laying a foundation for future sales growth.
- Nike Stock Reaction: Despite Dick's shares falling 5% due to mixed guidance, Nike's stock rose 2% following Dick's earnings report, reflecting market optimism about Nike's recovery, especially with the upcoming World Cup.
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See More
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- Earnings Release Schedule: NIKE, Inc. plans to release its fourth quarter fiscal 2026 financial results on June 30, 2026, at approximately 1:15 p.m. PT, followed by a conference call to analyze the results, which will aid investors in understanding the company's financial health.
- Conference Call Timing: The conference call is scheduled to begin at 2:00 p.m. PT after the earnings release, with management providing a live broadcast over the Internet, ensuring that global investors can access the latest information in real-time, enhancing transparency and communication efficiency.
- Information Access Channels: Investors can access earnings releases and other financial information through NIKE's investor website, ensuring timely and accurate information, while also providing an archived version for those unable to attend the live broadcast, extending the convenience of information retrieval.
- Company Background Overview: Headquartered in Beaverton, Oregon, NIKE, Inc. is the world's leading designer, marketer, and distributor of athletic footwear, apparel, and equipment, with its subsidiary brand Converse actively expanding its market presence, further solidifying NIKE's leadership in the sports industry.
See More
Apple's Stock Rises for Nine Weeks, Dell Surprises with Earnings
- Apple's Stock Performance: Apple shares have risen for nine consecutive weeks, gaining over 15% in the past month and approximately 24% since March 16, indicating strong market demand and investor confidence.
- Dell's Earnings Surprise: Dell reported an 88% year-over-year revenue growth in its Thursday evening earnings release, with shares soaring nearly 40% in after-hours trading and a total increase of 111% over the past month, showcasing its robust market performance and competitiveness.
- Semiconductor Sector Strength: The VanEck Semiconductor ETF rose 18% in May and has gained 47% over the past three months, with Astera Labs and Micron surging nearly 80% and 78% respectively, reflecting a recovery in the semiconductor industry and investor optimism.
- Nike's Stock Volatility: Nike shares increased by 3% on Thursday and are up nearly 7% in May, yet they are down 40% from the August 2025 high, making it one of the worst performers in the Dow, highlighting market concerns about its future growth.
See More
Gap's Q1 Performance Falls Short of Expectations
- Sales Guidance Cut: Old Navy's comparable sales grew only 1% in Q1, falling short of the 3% expected by analysts, prompting Gap to lower its full-year sales outlook to 1%-2%, which could negatively impact market confidence and investor sentiment.
- Earnings Forecast Raised: Despite the sales decline, Gap raised its adjusted earnings per share guidance to between $2.30 and $2.40, up from the previous range of $2.20 to $2.35, indicating positive performance in cost management and tax benefits.
- Brand Performance Discrepancies: The Gap brand saw a 10% increase in comparable sales, significantly exceeding the 5.5% expected by analysts, while Banana Republic and Athleta reported growth of 2% and a decline of 11%, highlighting competitive disparities among brands.
- Negative Market Reaction: Following the earnings report, Gap's stock dropped over 10% in after-hours trading, reflecting investor concerns about the company's future sales and market strategy, particularly as Old Navy's products failed to resonate with consumers.
See More
Lululemon Stock Faces Critical Test Ahead of Earnings
- Downward Price Trend: Lululemon's stock has plummeted over 75% since its peak in December 2023, dropping from an all-time high of $500 to a critical support level of $120, reflecting severe market challenges amid rising competition and slowing sales.
- Technical Chart Analysis: The stock has formed a textbook downtrend over the past year, and while a recent rally suggests a short-term buying opportunity, resistance at the 50-day moving average of $145 limits upside potential, with a breakout possibly leading to $170.
- Leadership Change Impact: Incoming CEO Heidi O'Neill will officially take over in September, raising market expectations for a turnaround; however, if the stock breaks below the $120 support level, it could lead to a further decline to $80.
- Risk and Reward Assessment: The stock is at a major technical inflection point with three trading scenarios, two of which favor going long ahead of earnings; if it holds the support level, a rally coinciding with the new CEO's tenure could occur, otherwise, a stop-loss may be necessary.
See More
Dick's Sporting Goods Signals Stabilizing Demand, Bright Spot for Nike
- Sales Growth Signal: Dick's Sporting Goods reported a 6% same-store sales increase in its latest earnings, surpassing expectations and indicating a stabilizing demand for athletic footwear, which could positively impact Nike.
- Foot Locker Recovery: The acquisition of Foot Locker by Dick's resulted in a 0.6% comparable sales growth for the first time, with North America performing even better at 1.4%, laying a foundation for future sales growth.
- Nike Stock Reaction: Despite Dick's shares falling 5% due to mixed guidance, Nike's stock rose 2% following Dick's earnings report, reflecting market optimism about Nike's recovery, especially with the upcoming World Cup.
- China Market Challenge: Nike faces a forecasted 20% revenue decline in China, which remains a significant challenge for its overall recovery, even as North America wholesale revenue grew by 11%.
See More
Jim Cramer Recommends Four Stocks for New Investors
- Diversification Strategy: Jim Cramer emphasized the need for diversification even as artificial intelligence dominates the market, ensuring long-term stability in investment portfolios to mitigate risks associated with single-theme investments.
- Stock Recommendations: Cramer recommended four stocks for new members to buy, including Alphabet, Amazon, Apple, and Nvidia, all of which demonstrate strong growth potential, particularly in their AI-related businesses.
- Market Outlook: Despite challenges faced by Meta and Microsoft, Cramer remains cautiously optimistic about their future performance, suggesting that these companies could achieve breakthroughs in the evolving AI landscape.
- Emerging Investment Opportunities: Stocks like Arm Holdings and Broadcom are showing strong performance, particularly in the data center and AI chip sectors, reflecting robust market demand for related technologies, making them worth watching for long-term growth potential.
See More
