1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Nike, Inc. (NYSE:NKE) designs, markets, and distributes luxury athletic footwear, accessories, equipment, and services for sports and fitness activities. Its operating segments span EMEA, Greater China, APLA, and North America. The company also designs products specifically for the Converse and Jordan brands. Several of its products are valued at thousands of dollars. Nike, Inc. (NYSE:NKE) is considered one of the top luxury fashion brands, and has a market cap of $113.75 billion.
Nike, Inc. (NYSE:NKE) reported a decline of 8% in its revenues on a reported basis and a 9% decline on a currency-neutral basis in fiscal Q2 2025. This decline was primarily due to the ongoing headwinds from the company’s franchise management actions. It is shifting its product portfolio by reducing the proportion of its business driven by its classic footwear franchises, including Air Jordan 1, Air Force 1, and Dunk. This caused a reduction in revenues from these franchises as the company continued to tighten its marketplace supply. These franchises decelerated faster than the company’s business in fiscal Q2 2025, at a rate greater than fiscal Q1 2025. The company is actively rebalancing product allocations to its highest traffic channel to maximize full-price realization and franchise health.
The company is driving the biggest reductions to its classic footwear franchises on NIKE Direct, which fell 14% with NIKE Digital declining 21% and NIKE Stores declining 2%. However, the company also saw momentum build with positive physical and digital traffic. Black Friday week proved to be the largest demand week ever on NIKE Digital with sales increasing by double-digits. Similarly, 11/11 sales exceeded company plans in Greater China. Fiscal Q2 2025 thus reflected progress in key areas, with the company gaining consumer support. Nike, Inc. (NYSE:NKE) ranks second on our list of the top luxury stocks to buy now.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
Overall, NKE ranks first among the top 12 luxury stocks according to hedge funds. While we acknowledge the potential of luxury stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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