NIKE, Inc. NKE is relying on product innovation and a stronger focus on sport to rebuild momentum after a challenging period for its Sportswear business. In fiscal 2026, NIKE Brand footwear revenues were essentially flat at $29.5 billion on a reported basis and declined 2% on a currency-neutral basis. The weakness was more pronounced in Greater China, where footwear sales fell 13% on a reported basis and 15% on a currency neutral basis.
However, the recovery is unlikely to depend mainly on product launches. NIKE Direct revenues declined 6% in fiscal 2026, while NIKE Brand Digital fell 12%, indicating that distribution and consumer engagement remain important challenges. NIKE expects Sportswear to remain under pressure in fiscal 2027, with improvement anticipated in the second half. The category’s sell-through remains challenged, contributing to higher discounting and weaker future order books. Sportswear and Jordan Streetwear together account for roughly half of NIKE’s revenues, making their recovery important to restoring sustainable top-line growth.
Nevertheless, the company is responding by reshaping its footwear portfolio. In the second half of fiscal 2027, NIKE plans to introduce over a dozen new Sportswear footwear styles, emphasizing innovation, fresh silhouettes and distinct consumer experiences rather than relying primarily on retro franchises. The company removed more than $2 billion of classic footwear franchises from the market in fiscal 2026 as part of this repositioning.
NIKE has further emphasized its “Sport Offense” strategy, which seeks to create a more complete product portfolio, strengthen connections with athletes and consumers, and improve marketplace execution. The company said that progress was already visible in performance products during fiscal 2026.
New footwear could therefore help NIKE refresh consumer interest, improve full-price sell-through and reduce reliance on older franchises. A stronger performance-running portfolio could also create opportunities to attract consumers beyond traditional Sportswear offerings and generate renewed brand excitement. Hence, successful launches, supported by effective marketing, wholesale partnerships and improved digital execution, could provide an important foundation for rebuilding Sportswear momentum.
NKE’s Peers
lululemon athletica inc. LULU is putting greater emphasis on product newness, technical performance and innovation. LULU has been specifically increasing the frequency and breadth of new styles while maintaining its premium positioning. lululemon is leveraging its innovation platform and expanding beyond traditional yoga and core categories into areas such as running, training, tennis, golf, hiking and footwear.
adidas AG’s ADDYY innovation strategy is centered on athlete-led product development, advanced technologies, local consumer insights and a combination of performance innovation with lifestyle appeal. adidas is pursuing a broad-based growth strategy centered on product innovation, performance and lifestyle relevance. ADDYY is strengthening key performance categories such as Running, Football and Training through new technologies and athlete-focused products, while simultaneously refreshing its Lifestyle portfolio.
NKE’S Price Performance, Valuation and Estimates
Shares of NIKE have lost 28% in the past six months compared with the industry’s decline of 23.3%.
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From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 19.57X compared with the industry’s average of 17.32X.
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The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 5.1% and 30.6%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past seven days.
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NIKE stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).