Will NIKE's Holiday Order Book Spark a Recovery in FY26?

NIKE Inc.’s NKE fiscal 2025 results underscored the challenges facing the brand, with revenues down 12% year over year in the fourth quarter and continued pressure from inventory cleanup and weakening demand in classic franchises such as Air Force 1, Dunk and AJ1. However, management emphasized that the foundation for a recovery is being laid through its “Win Now” actions and new “sport offense” strategy. A particularly encouraging sign came from the wholesale channel, where NIKE noted that its holiday order book is up year over year, reflecting renewed confidence from partners in the company’s product pipeline.

The order book improvement is significant because it suggests wholesale partners are betting on NIKE’s ability to balance performance innovation with fresh sportswear offerings. Key franchises in running, basketball and women’s performance are showing momentum, with strong sell-throughs for models like the Vomero 18 and A’ja Wilson’s new signature line. The fact that North America, EMEA and APLA all reported stronger holiday bookings, partially offset by ongoing weakness in China, highlights that the company’s recovery potential in fiscal 2026 could be broad-based, even if uneven across regions.

NIKE acknowledged that the first half of fiscal 2026 will remain pressured by inventory liquidation, tariff headwinds and digital repositioning. However, the stronger holiday order book provides an early signal that the back half of the fiscal year may mark a turning point. If the company can sustain wholesale momentum, execute its sport-led innovation pipeline and stabilize digital as a full-price destination, fiscal 2026 could spark the beginning of a recovery. The challenge will be converting wholesale enthusiasm into consistent consumer demand, particularly in China, where the path back to growth will take longer.

NIKE’s Rivals on the Global Stage

adidas AG ADDYY and lululemon athletica inc. LULU stand out as two of the most prominent rivals challenging NIKE’s position in the global sportswear and athletic apparel market.

adidas is one of the world’s largest sportswear companies, competing head-to-head with NIKE in footwear, apparel and accessories. With roots in Germany, the brand has built a strong global identity by blending performance innovation with lifestyle appeal. adidas is especially dominant in soccer, running and collaborations with athletes, celebrities and designers that fuel its cultural relevance. Its scale, heritage and global marketing power make it a consistent challenger to NIKE’s market leadership.

lululemon has emerged as a leading player in the premium athletic apparel space, with its origins in yoga-inspired clothing expanding into broader activewear and lifestyle categories. The company differentiates itself through high-quality, innovative fabrics, a strong direct-to-consumer focus and deep customer engagement built around community and wellness. With rapid growth in both North America and international markets, lululemon has become a formidable competitor to NIKE, particularly in the fast-growing athleisure and women’s performance wear segments.

NKE’s Price Performance, Valuation & Estimates

Shares of NIKE have gained 3.1% year to date compared with the industry’s growth of 0.8%.

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 40.95X compared with the industry’s average of 30.82X.

The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 21.8%, while that for fiscal 2027 indicates growth of 53.7%. The company’s EPS estimate for fiscal 2026 and 2027 has been stable 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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