Nike Edges Out Lululemon as Retail Traders Pick Turnaround Stock

Nike and Lululemon are two athletic apparel brands struggling to regain momentum. Retail investors, however, seem more optimistic about Nike's turnaround chances.

A Stocktwits poll found that 68% of respondents favored Nike as the stronger comeback opportunity, while 32% chose Lululemon. The preference for Nike comes despite both stocks trading at multi-year lows, with NKE down 47% from its 52-week high and LULU down 53%. A user on Stocktwits commented, 'NIKE for sure... we're just in a funk right now but they'll jump up to $60 before you know it and then the meantime, collect the Divvy.'

Nike's CEO Elliott Hill is leading the company's strategic reset, which includes rebuilding wholesale ties and restoring shelf presence. The company has underperformed the overall U.S. stock market, with its stock doing worse relative to the S&P 500 than at any point in about 25 years. Since its November 2021 record high, Nike has lost more than 40% of its market value due to strategic mistakes.

Lululemon, on the other hand, is facing weaker U.S. demand and mixed customer reactions to new products. The company's revenue rose 4% in the first quarter to $2.5 billion, but flat U.S. sales have raised concerns about limited room for further growth at home.