Wholesale Recovery Spurs at NIKE: Early Signs or Short-Lived Lift?

NIKE Inc.’s NKE wholesale business is showing early signs of momentum, even as the company navigates a broader reset under its “Win Now” strategy. In fourth-quarter fiscal 2025, wholesale revenues declined 9%, an improvement from the 12% fall reported in third-quarter fiscal 2025. Additionally, it shows a modest improvement relative to NIKE Direct’s steeper 14% drop.

Management emphasized renewed engagement with wholesale partners, including new product activations and strategic distribution expansions, aimed at regaining brand heat and improving full-price sell-throughs.

The company also highlighted stronger wholesale collaborations, citing success with DICK’S Sporting on the 24.7 training collection and with JD on the Air Max 95. These elevated executions boosted sell-throughs and reaffirmed wholesale's critical role in NIKE’s growth. NIKE is increasing retail marketing, visual merchandising and account support to deepen wholesale relationships. A key signal is that the company’s holiday order book has moved up year over year at the end of fourth-quarter fiscal 2025, driven by growth in North America, EMEA and APLA.

Despite these positive signals, questions remain around the durability of this rebound. Challenges persist, including tariff pressures, promotional environments and lingering inventory resets in some regions. However, NIKE’s move to segment its wholesale business by sport and price point may enhance channel efficiency and consumer targeting. With an improved order pipeline and early traction on new assortments, NKE appears positioned to strengthen its wholesale performance, although execution in the next two quarters will be the key to sustaining that recovery.

How NKE’s Rivals LULU & ADDYY Are Advancing in Wholesale

As NIKE sharpens its wholesale focus, rivals lululemon athletica inc. LULU and adidas AG ADDYY are stepping up their efforts to expand partnerships and grow through curated, brand-aligned wholesale channels.

lululemon is cautiously expanding its wholesale business to complement its strong direct-to-consumer model. In first-quarter fiscal 2025, the company reported wholesale revenues of $39 million, reflecting a modest year-over-year increase while maintaining tight control to protect brand equity. Management emphasized a measured, brand-accretive approach, focusing on key partnerships like DICK’S and strategic international accounts. Looking ahead, lululemon aims to grow wholesale selectively, prioritizing premium positioning and reinforcing full-price sales across all channels.

adidas delivered strong momentum in its wholesale business, with revenues rising 14% year over year in second-quarter 2025 on a currency-neutral basis. The company attributes this to robust sell-through rates and expanded shelf space with key retail partners. Despite headwinds from tariffs and currency rates, adidas is leveraging a deeper product pipeline and improved retailer relationships. Looking ahead, adidas plans to continue investing in wholesale growth while balancing full-price sell-through and brand equity protection.

The Zacks Rundown for NIKE

NKE shares have gained 1.3% year to date against the industry’s decline of 0.2%.

From a valuation standpoint, NIKE trades at a forward price-to-earnings ratio of 42.12X, significantly higher than the industry’s 31.32X.

The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 22.7%, whereas that for fiscal 2027 suggests growth of 55%. Earnings estimates for fiscal 2026 and 2027 have been southbound in the past 30 days.

NIKE currently carries a Zacks Rank #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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