Nike (NKE) vs. Lululemon (LULU) Earnings Preview: Mixed Sentiment and Key Risks

On December 10, 2025, a Reddit discussion analyzed Nike (NKE) and Lululemon (LULU) in the lead-up to their earnings reports. LULU faced bearish feedback regarding premium athleisure market saturation, operational inefficiencies (high return rates, fragmented shipping), and discounting at outlets, while bullish views emphasized its strong international growth. NKE was viewed positively for its 5-year low valuation, strong brand moat (including Ronaldo’s endorsement), and potential double-digit returns [event context].

NKE has a market cap of $97.24B, P/E ratio of 33.55x, and ROE of 21.16%, with a YTD decline of 10.70% and 5-year drop of 52.18% [0]. LULU, smaller at $21.28B market cap, trades at a cheaper 12.56x P/E with higher ROE (42.05%) and net margin (16.38% vs. NKE’s 6.23%), but has a steeper YTD decline of 49.63% [0]. Both companies carry low debt risk [0].

LULU’s Q3 2026 earnings (Dec 11) are expected to show 3.3% YoY revenue growth to $2.48B, but it faces a U.S. sales slowdown (4% comparable sales drop in Americas) and a brand identity crisis due to founder criticism [2, 1]. NKE’s Q2 2026 earnings (Dec 18) are projected to see 1.8% sales decline to $12.13B due to China weakness and franchisee pullbacks, though its stock rose 3.88% on December 10 following a Fed rate cut, and Guggenheim initiated coverage with a Buy rating ($77 target) [6, 4, 5].

1. Valuation Divergence
   : LULU’s cheaper multiples contrast with its stronger profitability, reflecting market skepticism about its growth trajectory [0].
2. Sentiment Split
   : LULU has a balanced analyst consensus (46.4% Buy, 46.4% Hold), while NKE has a more positive 60% Buy consensus [0].
3. Risk Contrasts
   : LULU’s risks center on U.S. market saturation and brand tensions, whereas NKE’s stem from China weakness and emerging competition (Asics, Hoka) [1, 7, 0].

• LULU
  : U.S. premium athleisure saturation, founder-CEO tension eroding brand identity, operational inefficiencies, and margin pressure from discounting [1, 2, event context].
• NKE
  : China sales slowdown (14.7% of FY2025 revenue), declining growth, franchisee pullbacks, and competitive threats [6, 7, 0].

• LULU
  : International growth momentum in China and Europe [1].
• NKE
  : Fed rate cuts boosting consumer spending, strong brand moat, and analyst optimism (Guggenheim Buy rating) [4, 5].

• Earnings Dates
  : LULU (Dec 11, 2025), NKE (Dec 18, 2025).
• Valuation Metrics (2025)
  : NKE – $97B market cap, 33.5x P/E, 21% ROE; LULU – $21B market cap, 12.6x P/E, 42% ROE [0].
• Sentiment
  : Mixed for LULU, more positive for NKE.
• Critical Factors to Monitor
  : LULU’s international vs. U.S. growth guidance, NKE’s China turnaround strategy [2, 6].