Key Points Nike has lost more than half its value in the past five years. The stock is facing headwinds like U.S. tariffs and declining revenue in China. Its CEO has a turnaround plan, but the athletic footwear market might be in decline. 10 stocks we like better than Nike › Nike (NYSE: NKE) is an iconic brand that has launched world-famous products and eye-catching ad campaigns. But the apparel company, known for Air Jordans and other celebrity athlete endorsements, is struggling to gain liftoff ...

Core Insights - Walmart is expanding its footwear offerings through a partnership with Stadium Goods, aiming to provide customers with access to exclusive sneaker styles like Air Jordans and Air Force 1s on Walmart Marketplace [1][2][3] - The collaboration is part of Walmart's strategy to enhance its product assortment and meet customer demand for premium-brand sneakers while maintaining competitive pricing [3] - This initiative follows a previous partnership with StockX, which Walmart announced a year ago, indicating a trend of diversifying its sneaker offerings [3] Financial Performance - In the second quarter ended July 31, Walmart's operating income decreased by 8.2% to $7.3 billion from $7.9 billion year-over-year, but adjusted operating income increased by 0.4% to $8 billion [4] - Net income rose significantly by 56% to $7 billion from $4.5 billion in the same quarter last year [4] - Revenues increased by 4.8% to $177.4 billion from $169.3 billion year-over-year, with global e-commerce sales growing by 25% [5] Strategic Focus - Stadium Goods is shifting its focus towards digital channels for growth, having closed its physical store in New York City to concentrate on online sales [6] - The company plans to enhance its market center to improve product intake and provide a better retail experience [6]

Core Insights - Nike is facing significant pressure to increase sneaker prices due to new tariffs imposed by the U.S. government, which are expected to impact profit margins and consumer purchasing behavior [1][4][5] Company Overview - Nike has a long-standing reputation in athletic apparel, particularly in running shoes since its founding in the 1960s by Phil Knight, and has maintained a strong brand presence through partnerships with sports stars like Michael Jordan [1][3] - The company reported annual revenue of $46.3 billion for fiscal 2025, a decline from $51.3 billion in FY2024, and employs approximately 77,800 people [7][20] Financial Impact of Tariffs - New tariffs on Chinese imports are set at 30%, while those on Vietnamese imports are at 20%, leading to an estimated annualized cost increase of $1.5 billion for Nike, up from a previous estimate of $1 billion [5][16] - Nike's gross margin is expected to decline by 1.2% in fiscal 2026, with a significant impact anticipated in the upcoming quarter, where gross margins may drop by 3% to 3.75% due to these tariffs [21][16] Market Dynamics - The U.S. footwear industry is heavily reliant on imports, with 99% of products sold in the U.S. being imported, which means that companies like Nike are significantly affected by tariff increases [15] - Despite the challenges, the demand for higher-end sneakers remains, supported by a relatively stable U.S. economy, although inflation pressures are beginning to affect consumer spending [8][11] Competitive Landscape - Nike is not alone in facing these challenges; competitors like Hoka and Adidas are also increasing prices due to similar tariff pressures [22][23] - The footwear market is seeing a shift, with brands like Asics gaining traction, indicating a more competitive environment for Nike [3] Stock Market Reaction - Nike's stock has seen a significant decline of 52% since 2021, with analysts divided on the company's future prospects; some express skepticism about its ability to return to previous growth levels, while others are more optimistic about recent sales improvements [24][25]