NIKE and lululemon have experienced significant share declines over the past year, underperforming against the general market. NIKE has struggled with stagnant innovation and a weak presence in China, leading to little to no sales growth in the past three years. The company’s earnings per share (EPS) outlook remains bearish, currently holding a Zacks Rank of #4 (Sell).
Similarly, lululemon’s shares have fallen due to a 3% year-over-year revenue decline in the Americas and a 5% drop in comparable sales. The company also reported a 410 basis point decline in gross margin, now at 54.2%. With a Zacks Rank of #5 (Strong Sell), both companies face challenging earnings outlooks and are seen as risky investments.
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