Core Viewpoint - Both Nike and Lululemon are facing significant challenges, but Lululemon is currently trading at a more attractive valuation, making it a better buy compared to Nike [1][15]. Nike - Nike's fiscal 2025 revenue fell 10% year over year to $46.3 billion, with net income declining 44% to $3.2 billion and earnings per share dropping 42% to $2.16 [4]. - In the first quarter of fiscal 2026, Nike's revenue grew about 1% year over year, but this included a 10% decline in Greater China and a 4% decrease in Nike Direct revenue [5]. - Nike's stock trades at about 32 times earnings per share, indicating a high valuation for a company struggling with consumer demand [8]. - The company faces an estimated annualized gross incremental cost of approximately $1.5 billion due to tariffs, up from $1 billion three months earlier [7]. Lululemon - Lululemon's revenue rose 7% year over year to $2.5 billion in the second quarter of fiscal 2025, with international revenue increasing by 22% [9]. - The company has cut its full-year revenue outlook to between $10.85 billion and $11 billion, reflecting 2% to 4% year-over-year growth, impacted by U.S. demand struggles and tariffs [12]. - Lululemon's stock has a price-to-earnings ratio of less than 12, significantly lower than Nike's valuation, making it more attractive for investors [13]. Comparison - Lululemon's international growth and lower earnings multiple make it a more compelling investment choice compared to Nike, which has a higher valuation and ongoing demand issues [15].