NIKE's E-Commerce Momentum Builds: Is it Enough to Offset Retail Woes?

NIKE Inc. NKE is doubling down on e-commerce as it navigates a challenging retail landscape. In fourth-quarter fiscal 2025, the sportswear giant’s digital transformation gained traction, with NIKE Direct showing early signs of becoming a more premium destination when tied to sport moments, product launches and on-the-ground activations. Initiatives such as integrating storytelling with performance products, partnering with platforms like Amazon and enhancing wholesale collaborations are aimed at widening consumer reach and driving brand heat online. The company is also repositioning NIKE Digital to focus on full-price sales, even if it means accepting lower traffic in the short term.

However, the road to recovery is complex. Retail challenges remain evident, with wholesale revenues declining and elevated inventories persisting in some geographies. NIKE’s “Win Now” actions, sharper marketplace segmentation, sport-specific product teams and selective expansion into premium retail spaces are designed to stabilize its physical retail performance while enhancing the integrated marketplace. Nonetheless, management cautions that the turnaround, particularly in markets like China, will take time.

The central question is whether e-commerce momentum can fully offset retail pressures. While digital gains, product innovations and strategic partnerships signal progress, sustained growth will hinge on NIKE’s ability to balance online expansion with healthier wholesale and store sales. For now, the brand appears committed to a long game, leveraging its sport-led identity to reignite consumer demand both on-screen and in-store.

How NKE’s Rivals LULU & ADDYY Are Positioned

As NIKE works to steady its retail footing, rivals lululemon athletica inc. LULU and adidas AG ADDYY are sharpening their e-commerce playbooks to capture consumer spend in an increasingly digital-first marketplace.

lululemon’s e-commerce business remains a key growth driver, contributing more than two-fifths of total revenues in first-quarter fiscal 2025 and showing steady gains despite softer U.S. store traffic. Digital growth is supported by strong product newness, balanced across performance and lifestyle, and reinforced by global brand activations. While retail headwinds persist, especially in the United States, lululemon’s premium positioning, innovation pipeline and loyal customer base position its online channel to help offset near-term pressures.

adidas’s e-commerce business continues to gain traction, fueled by exclusive product drops, premium storytelling and a focus on full-price sales. The company’s digital channels are benefiting from stronger direct-to-consumer engagement and targeted marketing investments. This growing online momentum is helping to cushion the impact of softer wholesale and store traffic, positioning adidas to better navigate retail headwinds, while strengthening its long-term connection with consumers in a competitive marketplace.

The Zacks Rundown for NIKE

NKE’s shares have gained 27.5% in the past three months compared with the industry’s growth of 23.4%.

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From a valuation standpoint, NIKE trades at a forward price-to-earnings ratio of 40.05X, significantly higher than the industry’s 30.08X.

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The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 21.8% and the same for fiscal 2027 indicates growth of 53.7%. Earnings estimates for fiscal 2026 and 2027 have been southbound in the past 30 days.

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NIKE 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).

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