Nike vs. Lululemon: Which Stock to Buy for 2026?
Key Points
Shares of Nike and Lululemon have each fallen more than 60% over weak sales trends.
Lululemon could see a faster recovery than Nike.
Investors are pricing Lululemon stock at a lower earnings multiple, despite superior sales performance.
- 10 stocks we like better than Lululemon Athletica Inc. ›
Nike (NYSE: NKE) and Lululemon Athletica (NASDAQ: LULU) are both struggling to find traction in a choppy consumer spending environment. Both stocks are trading about 63% off their previous highs. But shares of Nike have held up better over the last 12 months, down 13% compared to Lululemon's 50% share price decline.
While both businesses are experiencing pressure on revenue and earnings from tariffs and soft demand, there is one reason why Lululemon can orchestrate a quicker turnaround than its larger rival.
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Why buy Lululemon over Nike stock?
Nike's handicap is size. The company operates multiple brands, sports products, and geographies. This diversity can reduce business risk, but it's also slowing its recovery.
In the most recent earnings report, management acknowledged that its comeback is moving at "different speeds," with sales in Greater China declining 16% year over year last quarter. Nike says it's in the "middle innings" of its turnaround, suggesting it could take another year or so to see stronger results.
Lululemon has a faster lane to recovery. Revenue rose 7% year over year last quarter, compared to Nike's 1% increase. Lululemon management noted that it sold excess inventory during the holiday season, putting it in a leaner position heading into the spring product refresh.
The healthy inventory position could allow Lululemon to tighten up margins in the near term by avoiding promotional sales. All this makes Lululemon shares a better value, trading at a forward price-to-earnings multiple of around 15, well below Nike's 42.
Should you buy stock in Lululemon Athletica Inc. right now?
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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and Nike. The Motley Fool has a disclosure policy.
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