NIKE's Innovation Reset: Will It Drive Consumer Demand Rebound?

NIKE, Inc. NKE is pursuing a broad innovation reset to revive growth, fortify brand relevance and address intensifying competition in the global athleticwear market. The company is shifting back to performance-led innovation by accelerating product development in core categories like running, basketball and training.

This strategic shift prioritizes advanced technologies, athlete-focused design and sport-driven functionality to strengthen NKE’s competitive positioning. NIKE is investing in enhanced cushioning technologies, lightweight materials and performance-focused features that improve athletic performance while helping its products stand out in the market.

NIKE is streamlining its Classics business, restoring NIKE Digital as a premium platform, diversifying its product portfolio, strengthening consumer engagement, enhancing and reinforcing its partner relationships and leadership. The company has initiated its “Win Now” actions as an immediate response to key challenges and opportunities across its product innovation, brand storytelling, marketplace strategy and on-the-ground execution. It is implementing the Win Now actions across the key cities of Beijing and Shanghai.

The company is returning to retail basics by focusing on the right consumer assortments, robust brand storytelling and elevated visual merchandising to enhance the overall shopping experience. Alongside product innovation, NIKE is strengthening its wholesale partnerships, enhancing retail execution and reducing excess inventory to bolster full-price sales and faster product cycles.

However, in the early stages, consumer response remains uncertain. The success of Nike’s strategic shift will depend on disciplined execution, strong product impact and sustained consumer demand. Overall, NKE’s transformation efforts could revive consumer interest, boost demand and support long-term growth.

NKE’s Competition

lululemon athletica inc. LULU is benefiting from the strong execution of its Power of Three X2 strategy. LULU is delivering solid revenue growth through product innovation, enhanced guest experience and aggressive international expansion. The company is adopting a selective strategy, implementing targeted price actions in lieu of broad-based increases to preserve value perception and customer loyalty. LULU targets strengthening its leadership in athletic and lifestyle apparel while expanding into new categories and markets.

adidas AG's ADDYY strategy focuses on strengthening brand appeal, driving product innovation, improving operational efficiency and accelerating growth. adidas focuses on driving growth through product innovation and expanding direct-to-consumer channels. ADDYY prioritizes operational efficiency, inventory discipline and sustainability to improve long-term competitiveness. Its strategy focuses on performance-led categories, strengthening cultural relevance and expanding across key global markets to drive growth.

NKE’S Price Performance, Valuation and Estimates

Shares of NIKE have lost 18.5% in the past six months compared with the industry’s decline of 17.3%.

From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 29.03X compared with the industry’s average of 26.09X.

The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year plunge of 27.3% while that of fiscal 2027 shows growth of 54.1%, respectively. The company’s EPS estimate for fiscal 2026 has been stable while that of fiscal 2027 has moved south in the past 30 days.

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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research