NIKE Stock Lags: Will Innovation & Brand Power Spark a Rebound?

NIKE Inc. NKE is in a critical transformation as its stock continues to lag despite outperforming earnings expectations in fourth-quarter fiscal 2025. While the company reported EPS of 14 cents, beating estimates, its 12% year-over-year revenue decline and persistent gross margin pressures have weighed heavily on investor sentiment. This shortfall, caused largely by reductions in classic footwear franchises and ongoing inventory cleanup, signals a broader strategic pivot. NIKE is focusing on performance innovation, tighter product segmentation and a renewed commitment to sport. The company's “Win Now” actions, such as realigning digital strategy, streamlining operations and shifting marketing investments, are beginning to show signs of traction, particularly in North America and EMEA.Innovation is central to NIKE’s rebound strategy. Its new “sport offense” model organizes NIKE, Jordan and Converse brands around sport-specific teams to fuel sharper product development and storytelling. Early wins include strong running category growth and the Vomero 18’s $100M debut in just 90 days. Athlete-led launches like A’ja Wilson’s signature line are energizing women’s basketball. With seasonal alignment, a stronger DTC focus and sport-driven engagement, NIKE is pushing to regain brand momentum and share.NKE’s path to recovery hinges on execution. Management is confident that by fiscal 2026, the company will emerge with a cleaner inventory position, a stronger product pipeline and a more differentiated marketplace strategy. The rebalancing of its portfolio, away from legacy franchises and toward performance and sportswear innovation, is key to reigniting long-term growth. With new retail concepts, deeper digital integration and enhanced wholesale relationships underway, NIKE is positioning itself to meet the evolving expectations of global consumers. The company’s deep-rooted brand equity, athlete partnerships and relentless focus on innovation remain powerful assets in this turnaround journey.NKE Competing With Under Armour & Skechers for Market MomentumIn the shadow of industry giants like NIKE, both Under Armour, Inc. UAA and Skechers U.S.A., Inc. SKX are leveraging distinct strategies to secure their place in the global athletic and footwear market. The approaches of UAA and SKX highlight the importance of focus, innovation and adaptability in today’s evolving consumer landscape.Under Armour is undergoing a strategic reset as it works to stabilize its brand and regain momentum in a highly competitive athletic apparel and footwear landscape. After facing several quarters of uneven performance, the company is refocusing on its core strength, performance athletic wear, while streamlining operations and repositioning its product portfolio. Under Armour is leaning into innovation in training and running gear, aiming to better serve its target consumers. The brand is investing in digital platforms, optimizing its North America distribution, and simplifying its go-to-market approach to drive efficiency and strengthen retail partnerships.Skechers has solidified its position as a formidable player in the global footwear market by doubling down on comfort-driven innovation, international expansion and operational agility. While not as flashy as some of its peers, Skechers continues to deliver consistent performance through a diversified product mix that spans performance, lifestyle and work categories. The company’s focus on comfort technology, such as Arch Fit and Hyper Burst foam, has resonated across demographics, helping drive global demand even in a cautious consumer environment.NKE’s Price Performance, Valuation & EstimatesShares of NIKE have lost around 2.3% year to date against the industry’s growth of 11.7%.Image Source: Zacks Investment ResearchFrom a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 43.72X, significantly higher than the industry’s average of 22.75X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year plunge of 21.8% and 2027 earnings implies year-over-year  growth of 54.2%. The company’s EPS estimate for fiscal 2026 and fiscal 2027 has been witnessing a downward trend in the past 30 days.Image Source: Zacks Investment ResearchNKE stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report Skechers U.S.A., Inc. (SKX): Free Stock Analysis Report Under Armour, Inc. (UAA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks