Can NIKE's International Unit Outrun Global Retail Volatility?

NIKE, Inc. NKE is a globally recognized American brand specialized in athletic footwear, apparel and sports equipment. With presence in more than 190 countries worldwide, NKE leverages its iconic branding, innovation-led product development and athlete partnerships to maintain a dominant position in the global sportswear market.

The company’s vast international presence serves as a key growth engine, contributing to its revenue mix and helping to mitigate geographic concentration risk amid global economic volatility. NIKE’s International division is facing headwinds from global retail volatility, soft consumer demand and structural cost pressures such as tariffs and unfavorable currency movements. The near-term outlook remains cautious with soft revenues and margins internationally.

With the holiday order book now in hand, the company has increased visibility into the next phase of its product portfolio transition. Management noted that the holiday order book is up year over year for fiscal 2026, with growth in North America, EMEA and APLA partly offset by Greater China.

Although international momentum for the near term seems challenged, NIKE’s strategic playbook offers a clear path toward recovery in the long term. NIKE’s globally expansive supply chain is designed to be responsive and resilient. NKE’s aggressive “Win Now” initiatives, product innovation and partner-led distribution improvements might offer further aid.

NKE’s Competition in the Global Arena

adidas AG ADDYY and lululemon athletica inc. LULU are the key companies competing with NIKE in the global market.

adidas is actively pushing to expand its share in the global footwear market through product innovation, strategic collaborations and bold marketing. While recent challenges, especially in Greater China, have impacted performance, the brand remains committed to global diversification. Its regional strategies are rooted in local consumer insights, digital acceleration and tailored offerings, all aimed at reigniting growth and reinforcing its position as a global leader in sportswear.

lululemon is gaining strong traction in international markets, including Mainland China and the Rest of the World, as the brand connects well with customers globally. In first-quarter fiscal 2025, LULU’s total international revenues increased 19% year over year and 20% in constant currency. Driven by new guest acquisition, low markdown dependence and rising brand awareness, the brand sees significant global potential. lululemon aims to grow international revenues to nearly 50% of total sales and quadruple 2021 levels by the end of 2026.

NKE’s Price Performance, Valuation and Estimates

Shares of NIKE have lost 4.8% year to date compared with the industry’s decline of 7.8%.

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 39.93X compared with the industry’s average of 29.12X.

The Zacks Consensus Estimate for NKE’s fiscal 2025 earnings implies a year-over-year plunge of 22.7% while that for fiscal 2026 indicates growth of 55%. The company’s EPS estimate for fiscal 2025 and fiscal 2026 has moved down in the past 30 days.

NIKE stock currently carries 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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This article originally published on Zacks Investment Research (zacks.com).

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