Leading brands NIKE Inc. NKE and lululemon athletica inc. LULU continue to strive for dominance in the competitive sportswear and apparel market. NIKE, a global powerhouse in athletic footwear, apparel and equipment, holds a commanding market share and unmatched brand recognition worldwide. Conversely, lululemon, known for its yoga-inspired lifestyle offerings, has carved out a loyal customer base and is rapidly expanding beyond its core categories.
While both companies operate in the same space, they differ in focus, strategy and product mix. However, both face headwinds from shifting consumer spending patterns, soft earnings results and looming tariff uncertainties. This climate of uncertainty and short-term volatility can offer investors a window to acquire shares in high-quality names at potentially discounted valuations.
So, which of these two athletic giants is better positioned for long-term growth and which stock looks more compelling right now? Let us take a closer look.
The Case for NKE
NIKE is a global leader in sportswear, holding the largest share in the global athletic footwear and apparel market. Its competitive advantage is built on a foundation of iconic brands, an expansive global distribution network, and unmatched marketing partnerships with top athletes and sports leagues. Nike’s brand equity remains among the strongest worldwide, reinforced by its record of consistent innovation and ability to connect deeply with consumers across both performance and lifestyle segments.
In the face of near-term operational and tariff-related challenges, NIKE’s leadership has been transparent and proactive. The company is executing a focused set of strategic initiatives, referred to as its “Win Now” actions, which are designed to restore momentum and return to sustainable, profitable growth. These include rebuilding wholesale partnerships, reducing overreliance on aging franchises, cleaning up inventory channels and accelerating innovation. Management expects headwinds to ease heading into fiscal 2026 as new products scale and the marketplace becomes more aligned with NIKE’s premium positioning.
To drive long-term competitiveness, NIKE is reinvesting in its core strength — sport. The brand is speeding up the pace of product introductions, expanding into fresh performance categories, and launching bold marketing campaigns that reassert its leadership in athletic culture. Alongside this, NKE is reshaping the marketplace by elevating its retail presentation, scaling down discounting and amplifying its storytelling to strengthen consumer engagement and brand distinction. Innovation continues to be a central pillar of the strategy, with fresh energy flowing into categories like running, training and lifestyle through products like the Pegasus Premium and Vomero 18.
NKE’s innovation engine is evolving through the rollout of a broader, faster product development model. The newly introduced “Speed Lane” approach complements the successful “Express Lane,” enabling the company to respond quickly to consumer trends with shorter lead times and hyperlocal designs. This system-wide transformation is expected to fuel a wave of launches in the second half of fiscal 2025, including several new franchises across fitness and lifestyle.
As NIKE resets its digital business toward full-price positioning and reduces its reliance on paid marketing traffic, it is also laying the groundwork for a more balanced, resilient and premium-focused brand. These efforts highlight NKE’s commitment to long-term value creation and its enduring credibility as a global leader in sport.
The Case for LULU
lululemon continues to strengthen its position as a leading player in the global athletic apparel market. The company’s innovation-driven product strategy continues to fuel consumer engagement and brand loyalty. Recent launches, such as the Glow Up technical franchise for women, Daydrift lifestyle trousers, and the BeCalm yoga line, received strong guest responses. The company is also expanding its iconic Align franchise and introducing fabrics like LuluLinen. This product pipeline reflects lululemon’s ability to deliver newness and performance across its core and emerging categories, positioning it well for continued differentiation and guest acquisition.
Brand awareness remains a major opportunity for LULU globally. Despite strong brand equity in North America, unaided awareness in key international markets such as Japan, Germany and China remains low, providing a runway for growth. The company is aggressively activating its brand through community events, ambassador partnerships and unique campaigns, like its “Live Like You Are Alive” platform, and ambassador activations featuring athletes, such as Lewis Hamilton and Frances Tiafoe. These initiatives not only enhance customer retention but also attract guests in the underpenetrated markets.
lululemon projects net sales of $11.15-$11.3 billion for fiscal 2025, or 7-8% year-over-year growth excluding the 53rd week, supported by 40-45 store openings and a 10% increase in square footage. The company plans to continue expanding its international footprint, particularly in China and Europe, while maintaining disciplined capital allocation. With a strong balance sheet ($2 billion in cash), a robust innovation pipeline and a proven ability to execute, lululemon offers long-term investors a compelling growth story anchored in brand strength, market leadership and operational credibility.
How Does Zacks Consensus Estimate Compare for NKE & LULU?
The Zacks Consensus Estimate for NIKE’s fiscal 2025 sales and EPS implies year-over-year declines of 10.7% and 45.6%, respectively. EPS estimates have moved up 4.9% in the past 30 days.
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The Zacks Consensus Estimate for lululemon’s fiscal 2025 sales and EPS suggests year-over-year growth of 6.2% and 3.1%, respectively. EPS estimates have edged down 1.8% in the past 30 days.
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Price Performance & Valuation of NKE & LULU
Shares of both NIKE and lululemon show a declining graph in the year-to-date period due to the ongoing troubles in their businesses and the rising tariff imposition-related concerns. Year to date, NIKE shares have declined 21.7%, whereas lululemon stock has lost 28.4%.
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NIKE is trading at a forward price-to-earnings (P/E) multiple of 29.82X, above its median of 26.83X in the last three years. lululemon’s forward P/E multiple sits at 17.91X, below its median of 28.15X in the last three years.
lululemon’s stock looks cheap from a valuation perspective. Moreover, investments in product innovation, guest experience and market expansion, as part of the Power of Three X2 growth plan, highlight its growth prospects.
NIKE does seem pricey. However, its valuations reflect its focus on repositioning itself to be more competitive and drive sustainable, profitable long-term growth. If the company sustains its execution, the premium could be warranted.
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Conclusion
While both companies are well-poised to navigate the operational headwinds from shifting consumer trends, lululemon’s trajectory appears more compelling. NIKE, with its unmatched scale, global brand equity and a renewed focus on sport-driven innovation, is actively repositioning itself to drive long-term, profitable growth. Its disciplined reset across product, wholesale and marketing signals a clear path to recovery and sustained leadership.
Conversely, lululemon continues to outperform with strong financials, a powerful innovation engine and significant international growth potential. Its differentiated brand positioning, rapid product evolution and deep community engagement have created a loyal customer base and a compelling long-term growth narrative.
lululemon’s discounted valuation and a high-growth brand with expanding international upside give it an edge over NIKE. With solid fundamentals and a discounted valuation, it stands out as the better buy.
NIKE and lululemon currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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