Newsletter · · Ashutosh Agarwal

Nike Hits a 12-Year Low as Beauty Stages a Comeback - Brands: Luxury, Sneakers & Apparel - Week of August 23, 2026

Nike fell to a twelve-year low as podcast hosts dissected its direct-to-consumer misstep and China losses, while Estee Lauder jumped more than 16% to headline a broad beauty comeback, for the week of August 17 to 23, 2026.

Brands: Luxury, Sneakers & Apparel

Week of August 23, 2026: Nike Hits a 12-Year Low as Beauty Stages a Comeback

The podcast conversation this week circled two brands. The one that came up over and over was Nike: it reported the week before, the stock fell to a twelve-year low, and by this week half the finance shows on the internet had turned it into a case study in how a great brand falls apart. The other live story was the opposite: Estée Lauder, left for dead a year ago, jumped more than 16% on its results and became the poster child for a beauty comeback. Those two, one iconic brand cracking and one healing, are the whole week.

Nike: everyone's "dog of the week"

Let's start with the number that shocked people. Nike closed around $40 a share, nearly 80% below its late-2021 peak, and its lowest level since September 2014. On CNBC's Fast Money (Aug 17) the stock fell another 4% on the day, down almost 40% for the year, and traded about two-and-a-half times its normal volume, the kind of heavy selling that sometimes marks a bottom, though nobody was willing to call one (CNBC's "Fast Money").

Morning Brew Daily (Aug 21) named Nike its "dog of the week" and ran through why the swoosh has, in their words, been "brought to its knees." There isn't one reason, there's a pile of them (Morning Brew Daily):

  • Tariffs pushed up input costs.
  • It leaned on old shoe models (endless Air Jordan re-releases) instead of inventing new ones.
  • It bet too heavily on selling directly to shoppers (its own app and stores) and starved its wholesale partners.
  • It alienated some customers on social issues.
  • And it stopped being the only game in town: On and Hoka ate into its business, and in China, where revenue fell 12% last quarter, homegrown brands are winning.

The hosts quoted new CEO Elliot Hill telling staff earlier this year: "I'm so tired, and I know you are too, of talking about fixing this business." And they made an important point that cuts against the lazy "go woke, go broke" take: Nike's peers are getting crushed too. Over five years, Lululemon is down about 70%, Puma about 76%, Adidas about 50%, and Under Armour about 80%. When an entire category of legacy sportswear names falls together, the cause is bigger than any one marketing campaign, it's Chinese competition plus better products from newer rivals.

The self-inflicted wound: going direct-to-consumer

The most useful diagnosis came from Tim Seymour on Fast Money, who had just sold some of his own Nike position. His argument: Nike's push to sell directly to shoppers "gave away a lot of that shelf space" to Hoka and On. When Nike walked out of stores, rivals walked in. Now Nike's North American wholesale business is actually growing again, up about 10%, which tells you it probably needs those retail partners more than it once claimed. Seymour's other jabs: Nike "saturated the market with Air Jordans," still spends roughly $1.7 billion a year on North American advertising with campaigns that "just aren't working anymore," and hasn't cracked influencer marketing the way younger brands have. His verdict on the new boss, Elliot Hill, a company lifer, was blunt: "You need new blood at the top." He also flagged that JPMorgan's retail analyst downgraded the stock this month, saying the turnaround "has yet to make its way through the company" (CNBC's "Fast Money").

The wholesale flip-flop came up again on Cabot Street Check (Aug 21): Nike had cut back what it sold through Foot Locker to push its own digital channels, and has since "tucked its tail between its legs" and started cozying back up to those distributors (Cabot Street Check).

The valuation autopsy: a great product is not a great stock

AWM Insights (Aug 21) made the sharpest investing point of the week. Rewind to COVID, when people were "logging in at 7am to buy rare Jordans" and flipping them, the hype pushed Nike to about $180 and a valuation of roughly 70 times earnings, "trading like a tech stock." That, the hosts argued, was always the problem. At $40 today, the stock "actually looks like it's normal and where it should be." Layer on real damage, they noted that Nike may no longer be the #1 brand by market share in China, with as many as two local players now ahead of it, and you get the double-whammy: falling profits and a falling multiple at the same time (AWM Insights).

Their bigger lesson is one worth taping to your monitor: good products don't make good investments. People buy the stock at $160 after they've used and loved the sneakers, not at $60 before the craze, and that's an emotional decision, not a financial one. As a reminder that even great companies test your patience, they pointed out Nike is up about 42,000% since its 1983 IPO, yet that only beats the S&P 500 by around one percentage point a year, and the stock fell 50% in its first two years as a public company.

Robert Hunt made the same argument even more bluntly on his market update (Aug 21). Nike, he said, was "the brand to beat" his whole life, Michael Jordan, superstar deals, the works. Then: "Someone else made a better shoe. And making shoes was never that hard. And marketing was a big part of it. Wouldn't you know it? Some other people figured out how to do that too." His warning against buying a stock just because you love the product, the old Peter Lynch "buy what you know" rule, is that a moat you can't defend is no moat at all. (He also cited a Wall Street Journal stat that only 13% of US large-cap stock-picking funds beat their index over the past decade, a nod to how hard picking single names like this really is.) (Robert Hunt Financial Market Update)

The other side of the trade

Not everyone is bearish. On the Schwab Network (Aug 19), options trader Don Kaufman, who says he's been rightly bearish on Nike for a while, flipped bullish for a short-term bounce. He bought a call spread (a bet on a limited move up) expiring in November, targeting a pop from ~$40 back toward $47–52, while stressing this is a trade, not a call that $40 is the long-term bottom. He noted Nike's next earnings land September 29, so there's a catalyst baked in (Schwab Network).

The more common view, from Cabot Street Check, was to call both Nike and Lululemon "falling knives," stocks you don't try to catch mid-fall. Asked which they'd rather own for a turnaround, most hosts shrugged their way to Nike on generational nostalgia ("this is the eighties kid in me"), while admitting "no strong conviction." One value-focused host said he doesn't like either one until it "shows signs of life." Their read on why the tariff cloud is lifting a bit: those fears hit Nike hardest, and as the tariffs themselves have eased, so has some of the pressure (Cabot Street Check).

A footnote on China

One episode gave useful backdrop on why Nike is losing China. On RETHINK RETAIL (Aug 19), an executive who helped launch Under Armour in China around 2006 explained that big American brands keep arriving with the exact playbook that made them at home and refusing to adapt, the "biggest blunders" are usually product ones, like sizing that doesn't fit the local body. He also reminded listeners how enormous China once was for these brands: from roughly 2012 to 2020 it was a "luxury paradise," with Chinese shoppers making up more than a third of the world's luxury purchases, and Paris department stores that "felt like a Chinese train station" from all the tourist spending. That's the growth engine that has since sputtered (RETHINK RETAIL).

Lululemon: the premium brand caught discounting

Nike wasn't the only fallen sportswear giant this week. Lululemon is trading near all-time lows around $120 a share, down about 69% over five years, though its sales still grew about 4% over the last year versus Nike's slight decline (Cabot Street Check).

The most thorough post-mortem came from The Intrinsic Value Podcast (Aug 16), where the hosts explained why they finally sold the stock, bought at around $200 on average, sold at $116. The original case was a beautiful one: an athleisure pioneer with 35% returns on invested capital, roughly 20% annual growth, industry-leading full-price selling, and a reasonable 15x earnings, all while buying back tons of stock. Here's what cracked it, in the host's own telling (The Intrinsic Value Podcast):

"When I had been shopping on the Lululemon site recently... I was shocked by how much apparel was on sale."

That's the tell. He'd always said that the day Lululemon leaned on discounts would mark the end of its premium reputation, and he found data (from CNBC) confirming the discounting was real, not just his impression. Why it matters, in plain terms: discounts juice sales today but train customers to wait for the next sale, so nobody pays full price anymore. "It's no longer, hey, I'm willing to pay $100 for these leggings. I'm going to wait for them to sell at 70 or maybe 60." Once a premium brand teaches shoppers to wait, its margins and its magic quietly bleed out.

The rest of the case fell the same way: North America slowed faster than expected; Alo and Vuori are stealing the high end while cheap Amazon knockoffs hit the low end; the CEO, Calvin McDonald, left (under pressure from founder Chip Wilson), leaving two interim co-CEOs in charge at the worst possible moment; and the incoming boss is Heidi O'Neill, hired away from Nike, not the most reassuring pedigree given Nike's own mess. The host isn't writing Lululemon off forever, he called this "peak pessimism" and said he'd happily buy back in around five or six times cash flow, but he wasn't willing to hold through so much uncertainty. His broader warning applies to every hot apparel brand: as a brand goes mainstream, it stops being special. "The trendsetters used to wear it when it was still small... they stop wearing it," he said, pointing to Crocs and Aritzia as brands that rode and then risked that same wave.

Castore: the £1bn brand doing the exact opposite of Nike

Against all that incumbent gloom, there was one refreshing challenger story. On The Business (Aug 18), Tom Beahon, co-founder of British sportswear brand Castore, laid out how he built a company now valued near £1 billion from his family kitchen in 2015, after his parents remortgaged their house. A failed footballer who quit at 22, Beahon described a strategy that is almost a photo-negative of Nike's (The Business):

"It was no more or less sophisticated than let's do whatever the opposite of what Nike do. So if they manufacture in China, we're going to manufacture in Europe. If they sell predominantly through third-party retailers, we're going to sell direct to consumer."

He called Castore "a speedboat in a market of oil tankers," too small to outmuscle the giants, so it had to out-maneuver them. The business grew from about £50m in revenue before COVID to three or four times that. Tennis star Andy Murray invested in 2019, notably taking shares instead of cash (he "pioneered that concept of athletes taking equity"), and billionaire Jim Ratcliffe is also on the cap table. Castore now makes kit for Newcastle United, England Rugby, England cricket, and McLaren's F1 team.

The most interesting insight was why there's room for a challenger at all. Team kit, Beahon argued, is a "mission-critical" product with high barriers to entry, a club can't risk a kit that fails. But the giants (Nike, Adidas, Puma) rationally pour their best product and service into the global elite, Real Madrid, Barcelona, PSG, the All Blacks, Ferrari, leaving every "challenger club" below that tier with a "subpar product and service." That neglected middle is exactly where Castore plays. It hasn't all been smooth: he owned the 2023 Aston Villa "sweaty kit" debacle, a fabric that looked permanently wet, as the price of scaling too fast. Notably, no fast-fashion disruptor (a Shein or Temu) has broken into sports kit the way they broke into apparel, precisely because clubs won't gamble on an unproven supplier.

Beauty's comeback: Estée Lauder roars back

Now the good news story. Estée Lauder, a stock everyone had given up on, surged more than 16% on its results. On Brew Markets (Aug 19), the hosts framed it alongside Target, which popped about 5% on strong results and is up roughly 60% this year with comparable sales up about 4% across apparel and beauty, as one of the week's big turnaround stories (Walmart, by contrast, fell about 9% on its weakest sales growth in more than six years). For Estée Lauder itself: sales grew more than 6%, the quarterly loss narrowed, and it marked the fourth straight quarter of organic growth. The catch: even after that jump, the stock is still down more than 6% for the year, and the turnaround is being paid for with a brutal restructuring, cutting up to 10,000 jobs at a cost of more than $1.7 billion (Brew Markets).

The best detail came from analyst Deborah Aitken on Bloomberg Intelligence (Aug 19), who pulled apart what's actually improving (Bloomberg Intelligence):

  • Underlying sales (stripping out currency swings) grew 5%, a couple of points ahead of expectations.
  • Skincare, half the company, grew 7%.
  • The really striking number: operating margin jumped from 8.2% to about 19%. That's the restructuring showing up.
  • She thinks fragrance and makeup can climb into the 3–5% growth range, and expects analysts to nudge up their profit forecasts for 2027.

Just as important is where the growth is coming from. Estée Lauder is winning by raising prices and taking share in mainland China, Korea, Japan and Western Europe, with volumes also turning positive in the US. And a headwind that's been dogging every premium beauty and luxury name, weak travel retail (the duty-free shops in airports), is finally healing: it's "clearly coming back" in mainland China and across Asia, and even flowing from the Americas into Europe. That recovery is offsetting a 1.5–2% drag these companies are still taking from the Middle East. Chinese shoppers are traveling to Europe again, not to pre-2019 levels, but better than last year. It's the closest thing this week's podcasts offered to a positive read on the Chinese luxury consumer, and it came through the beauty door, not the handbag one.

Ulta's big bet, and the indie beauty machine

If Estée Lauder is the legacy comeback, Ulta is the retailer everyone wants to be inside. On The CMO Podcast (Aug 19), an Ulta executive sat with two founders whose brands it carries and explained the chain's most interesting strategic bet: fusing beauty and wellness. Ulta started noticing around 2019–2020, in social-media chatter, that shoppers were describing "wear SPF, drink water, take your vitamins" as part of their beauty routine, so it devoted real store square footage to wellness and supplements. A questioner captured the stakes bluntly: if that space underperforms, "we lost $300 million because of it." So far it's working, one supplement brand on the show, Cymbiotika, said a single four-hour Ulta event in LA generated three billion impressions (The CMO Podcast).

Behind the big names, the podcasts also gave a rare look at the plumbing of the indie beauty world, the small brands trying to reach a shelf:

  • On The Disruption Lab (Aug 18), the founder of AMP Beauty sized the market: beauty is roughly a $900 billion global business, and the "emerging" slice of new, independent brands is about $9 billion and growing fast, with those upstarts taking 15–20% more share every year. The problem she's attacking: it costs something like $10 million to launch a beauty brand "the right way," and even market-research subscriptions run $1,000–2,000 a month, so small founders are structurally locked out. Her company gives them data and gets them onto Target and Macy's shelves, with an in-house nurse practitioner vetting formulas for safety (The Disruption Lab).
  • On Grit Daily (Aug 17), the founder of Rei Cosmetics explained why she's importing Japanese drugstore beauty into the US: stricter Japanese regulation, specialized manufacturers, and lower marketing spend mean better products at lower prices, Japan even bans some ingredients still allowed here (Grit Daily Startup Show).
  • And on The Foundr Podcast (Aug 20), Sam Faiers described scaling UK liquid-collagen brand Revive Collagen into US retail, Ulta, Walgreens, CVS and Vitamin Shoppe, powered by celebrity ambassadors and a 2024 Kim Kardashian post to her 350-million-plus followers that "drove credibility rather than immediate sales" (The Foundr Podcast).

The through-line: the value in beauty is quietly migrating, toward wellness, toward Japanese quality-per-dollar, toward nimble indie brands, while legacy names like Estée Lauder have to cut billions in costs just to grow again.