Nike Wins Over Retail Traders as Both Brands Struggle to Rebound

Nike and Lululemon are two athletic brands struggling to regain their footing in the market. Despite both companies facing challenges, retail investors seem to favor Nike as a turnaround opportunity.

A recent Stocktwits poll showed that 68% of respondents preferred Nike over Lululemon, with only 32% choosing the latter. This optimism comes even as both stocks trade around multi-year lows, with NKE down 47% from its 52-week high and LULU off by 53%.

Nike's CEO Elliott Hill is leading a strategic overhaul of the company, including 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.

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

Nike's turnaround efforts are being led by CEO Elliott Hill, who is reshaping the company's organization and moving away from an aggressive direct-to-consumer emphasis. Lululemon's new CEO Heidi O'Neill will take over in September and face the task of reviving sales, restoring confidence in management, and helping the company compete with rivals.