Newsletter · 2026-09-27 · Ashutosh Agarwal

On's Big Promises, Nike's Tariff Crutch, and Ralph Lauren's Playbook - Brands: Luxury, Sneakers & Apparel - Week of September 27, 2026

A synthesis of what investor and operator podcasts said about luxury, sneakers and apparel for the week of September 27, 2026, built around On's investor-day targets and Mbappé equity deal, a closer look at how a tariff refund propped up Nike's profit, and Ralph Lauren's brand-elevation playbook. The throughline was what a brand comeback costs and who pays for it, from On's soccer bet to Lululemon's leadership fight to Ralph Lauren cutting discounts.

Brands: Luxury, Sneakers & Apparel

Week of September 27, 2026: On's Big Promises, Nike's Tariff Crutch, and Ralph Lauren's Playbook

The big picture

Last week's podcasts asked whether a fallen brand can come back. This week they turned to what the comeback costs, and who pays for it.

On Holding, the fast-growing Swiss running brand, used its investor day to lay out bold three-year targets. It also locked in its new soccer star, Kylian Mbappé, with shares in the company rather than cash. Several podcasts warned that paying for star power is what brands tend to do once easy growth runs out. Nike's numbers, looked at more closely this week, show that last year's profit leaned on a one-off tariff refund of nearly $1 billion. At Lululemon, a new CEO started work while the company's founder was still attacking it from outside.

The most useful hour of the week didn't come from sneakers at all. Ralph Lauren's CEO went on Nordstrom's own podcast and explained, in plain terms, how you pull a brand out of the discount bin. His answer: sell through fewer stores, run fewer sales, and keep going.

The date to watch: Nike reports fiscal first-quarter results (June–August 2026) this Thursday, October 1, after the market closes.

1. On's investor day: big targets, and a warning about star signings

Mbappé already led last week's issue. What's new this week is the business plan On put behind him.

The targets. On Squawk on the Street (Sept 22), a CNBC anchor ran through On's three-year goals:

• Sales growth in the high teens (about 17–19%) every year
• Gross margin of 65% or more, meaning the share of each sale left after paying to make the product
• Adjusted EBITDA margin of 22% or more, a rough measure of operating profit before interest, taxes and some accounting charges
• A $1 billion share buyback

There was one soft spot. On guided to 17% growth for the third quarter, against the 19% Wall Street expected. "The long term is what's keeping investors happy," the anchor said.

Why Mbappé said yes. CNBC Europe's interview with Mbappé ran on the same show. "I had 20 amazing years with Nike. I can only say thanks to them," he said. "When I saw the project of On, the value of the brand, the people around me... it can be the brand who makes me feel comfortable and when I want to spend the next 10 years of my career." The anchor repeated earlier reporting that "Nike let him go. They did not fight for him." The caveat: "If they do a good job, he's the guy. If they don't, it's like Steph Curry, you know, Under Armour."

The deal is paid in shares, not cash. The Best One Yet (Sept 21) explained why Mbappé would join a brand that doesn't yet make soccer boots:

• Shares instead of a paycheck. Like Roger Federer, who already owns part of On, Mbappé is reportedly taking equity in the company instead of cash for a 10-year deal. The hosts compared it to Nike signing Michael Jordan by giving him a share of the upside.
• A sprayed-on boot. On's LightSpray technology sprays the upper part of the shoe straight onto a foot shape. The hosts called it "like a second set of skin." The first Mbappé cleat is due on the pitch in 2027.
• Thierry Henry did the recruiting. The French legend is now On's director of football.

How hard soccer is to break into. The same show gave the numbers. At the last World Cup, Nike and Adidas had about 40% of the boots on the pitch (as the hosts put it), Puma had 10%, and New Balance, Mizuno and Skechers split what was left.

The warning: "beware the pivot from hustle to Hollywood." This was the sharpest idea of the week. The Best One Yet pointed out that On shares fell 5% on the Mbappé news and are down 43% since June. Then it looked at what happened after other brands made their big celebrity moves:

• Under Armour is down 68% since signing Steph Curry in 2013.
• Lululemon is down 72% since the first of three "Hollywood moves": buying the Mirror home-workout device, partnering with Peloton instructors, and signing F1 driver Lewis Hamilton.
• In both cases the stock started falling a year or two after the big signing.

The hosts' explanation: "Coolness for a brand is derived from hustle. And when that expires, brands feel the temptation to sign big Hollywood names." They quoted a Jefferies analyst who said the Mbappé deal shows On "must now spend money just to sustain growth."

How big On really is. Leaders Worth Knowing (Sept 24) put the two companies side by side:

Other points from that podcast:

• Big talk from On's product chief. At the investor day, Chief Product Officer Gérald Merolf said of the prototype boot he's been testing with Mbappé: "I can guarantee you this is going to be the best football shoe that was ever made. That's a promise."
• Golf is next. Federer wore a new On golf shoe at the event.
• Share-based deals haven't always worked. Harry Kane's deal with Skechers and Antoine Griezmann's with Decathlon both reportedly included equity. Neither made much of a splash.
• The people who will run it. Scott McGuire (President and COO) runs the business day to day now that the co-founders have stepped back. Alex Griffin has been CMO for nearly ten years. Rebecca Cai moved from running Asia-Pacific to Chief Global Markets Officer. Alice Delahunt, formerly Ralph Lauren's chief digital officer, has joined too.

The media angle. Meme Team (Sept 24) noted that On's announcement post drew about 2.6 million impressions. Its point was that the story got told as "why is Mbappé leaving Nike?", and that framing helped On anyway.

Why it matters: On is now selling two things at once: a steady plan built on high margins and buybacks, and an expensive bet on soccer. The Q3 guide is already below expectations, so investors will judge the soccer spending on whether sales keep growing, not on how many headlines it gets.

2. Nike: a flat year that a tariff refund held up

Most of this week's Nike talk repeated the 80%-drop story, and we won't retell it. Two podcasts added something new.

The profit was propped up. Brew Markets (Sept 21) gave the full-year numbers for fiscal 2026 (the year ended May 31):

• Revenue of $46 billion, flat on the year
• Net income down 3%, "propped up by nearly $1 billion in tariff refund benefits." In other words, the day-to-day business is weaker than the headline profit suggests.

The show also put numbers on the old strategy that went wrong. Under former CEO John Donahoe, Nike pulled out of Amazon and cut about half of its 30,000 wholesale accounts (the independent stores that stock its shoes), dropping Dillard's, Zappos and, most famously, Foot Locker. Selling direct briefly reached about 40% of revenue during the pandemic. Then shoppers went back to stores and found On, Hoka and New Balance on the shelves instead. CEO Elliott Hill has since rebuilt ties with DSW, Macy's and Foot Locker and gone back to Amazon.

Brew Markets also added context on the index change. Nike left the S&P 100 alongside Honeywell, Simon Property Group and Colgate-Palmolive. Their replacements, Dell, Palo Alto Networks, Arista and Sandisk, were all tech companies. It's a reminder that this was partly about the market favoring tech, not only Nike's troubles. Nike stays in the S&P 500.

The case for buying. On The Exchange (Sept 21), Oppenheimer's Brian Nagel, one of the few analysts still bullish, was blunt: "The stock is cheap. By almost any traditional measure at this point, it's cheap." He wouldn't call the bottom, though: "Given the bigger concerns out there from a macro standpoint, elevated oil prices, ongoing trade disruptions and such, it's hard to really call a hard bottom even in a stock like Nike."

His bull case looks two to three years out: "This remains an extraordinarily powerful global brand that's very difficult to replicate," which "gives Nike and this management team flexibility, time to figure it out." He sees "positive signs out there, particularly in categories like casual running," but admits the turnaround "is taking longer than initially expected."

It isn't only Nike. Wake Up to Money (BBC, Sept 21) noted that Puma is down more than 75% over five years and Adidas almost 50%. Its guest called this "a value issue, more than an industrial issue": investors have moved on to sectors "able to generate more margin, more profit." The guest also explained why selling direct worked for the newer brands but not for Nike. They started online and grew into stores, and "when Nike gave them the opportunity to expand in the wholesale," they took the shelf space Nike had given up.

A bad sign on marketing. Meme Team said the online consensus was that Adidas won the World Cup ad battle. Its street-soccer "Backyard Legends" spot with Timothée Chalamet beat Nike's studio production. Earn Your Leisure (Sept 20) cited operating margin falling from 15.6% in 2021 to 8% in 2026 and compared the fall to BlackBerry: "Jordans were that... Now, most kids don't want any Jordan apparel."

What to watch Thursday: Last year's profit leaned on a one-off tariff refund, so this Nike report is about the core business: gross margin, whether wholesale keeps growing as Hill rebuilds retailer relationships, and whether casual running keeps improving. Those are the "positive signs" Nagel is betting on.

3. Lululemon: a new CEO, and a founder who won't go quiet

Last week we covered Lululemon's lowered forecast. This week The Journal (WSJ, Sept 25) told the fight behind it.

• The founder is on the attack. Chip Wilson, who invented athleisure, has been "lobbing criticism at this company from the sidelines for almost a decade." It came to a head with a proxy fight, his campaign to replace board members. In the podcast Wilson calls about 30% of the men's line "appalling."
• Investors doubted the new CEO from day one. Heidi O'Neill spent about 25 years at Nike and started at Lululemon this month. The stock fell about 5% when she was named. At Nike she "spearheaded a direct-to-consumer strategy, pulling the brand out of retailers like Macy's and DSW." That is the same approach that backfired.
• The Nike comparison. WSJ reporter Suzanne Kapner: "They were kind of the big gorilla in the room, and they didn't see some of these newer players like Hoka and On coming up behind them." Alo, Beyond Yoga and Vuori are "more on trend... more nimble."
• The central question: "Who does it want to be? Who is its customer?... It can't be everything to everyone." O'Neill hasn't shared a plan yet. Her message to staff was "I'm on it." Her first day included a group yoga class.

The numbers view. InvestTalk (Sept 23) filled in the figures:

• The stock is around $100, down 50% this year, after trading above $400 at the start of 2025.
• Last quarter's revenue fell 4% from a year earlier, the second guidance cut in a row.
• It has underperformed the athletic apparel group by about 22% over two years.
• The balance sheet is safe: $1.4 billion in cash, roughly zero net debt, and buybacks have continued through the downturn.

The host still passed: "You can have strong brand awareness. You can have good products. But specifically in this space, there are just so many alternatives now." He applied the same point to Nike.

Why it matters: With no debt, Lululemon has time. The risk is that its new CEO is best known for the strategy that hurt Nike, and she has an active founder watching every move.

4. Crocs: cheap, and the hosts still passed

A listener question on InvestTalk produced a useful quick look at Crocs, last week's example of a brand that came back:

• Revenue rose from $1.3 billion in 2020 to about $4.1 billion projected this year, but growth has stalled.
• Net income rose from about $313 million to nearly $700 million, and free cash flow (cash left after running and investing in the business) is about $669 million.
• The stock is up 45% this year at about $124 and trades at 8.4 times expected earnings, cheap for a brand this profitable.
• The problems: Hey Dude, its second brand, is down 6% and still shrinking, tariffs have hurt, and next-quarter guidance was soft.

The host's verdict: until he sees steady growth "or spinning off what has been a weak division, I would hesitate."

5. Ralph Lauren: how to pull a brand out of the discount bin

The most practical podcast of the week was The Nordy Pod (Sept 21), where Pete Nordstrom interviewed Ralph Lauren CEO Patrice Louvet. It works as a counterpoint to the Nike and Lululemon stories: Louvet's approach is to be selective about retail partners, not to walk away from them.

The wake-up call from a retailer. "Partners like Nordstrom are telling us, listen, you're over-distributed, you're on promotion all the time, these are not the type of brands we want to carry." His answer was to cut distribution and the constant sales. He admits there is "still work to do to dramatically reduce off-price," meaning outlet and discount-store sales, which "had become kind of a business on its own." Now, he says, luxury retailers "see how your brand fits within the portfolio of brands that we have."

It never ends. "When does the elevation strategy kind of stop?... It will never stop. There will always be a bottom and we will continuously elevate this brand." He points to the company's roots: in 1967, "the Ralph Lauren ties were two and a half times the price of a Christian Dior tie."

"Inclusive luxury." Louvet's pricing ladder runs from "a pack of tennis socks for $12" to "a $320,000 watch," with a roughly $9 cappuccino at its cafés as another way in. "Great value isn't a discount, it's not a lower price. Great value is great storytelling, great product quality and style, great shopping experience at the appropriate price."

Fewer licenses. Ralph Lauren is licensing its name to other manufacturers "less and less," because "we probably went overboard." It now keeps licenses only where it lacks the expertise: fragrance, eyewear, underwear, socks and some kids' lines.

Trends now start in Asia. "More and more of the movements actually start in Asia... when we can get a Chinese consumer excited... it's highly likely that'll work in Europe and in North America. The opposite isn't necessarily true anymore." The company is also marketing through gaming. Louvet noted the League of Legends final draws more viewers than the Super Bowl.

Why it matters: This is the playbook Nike tried and got wrong. Ralph Lauren cut back where it sold without leaving the retailers its target customers use, and is using scarcity to lift prices rather than cutting out stores to capture margin. This is the CEO's own account on a partner's podcast, so read it as the company's case rather than independent proof.

6. The two-speed shopper

Two podcasts gave hard numbers on the split between rich and stretched consumers, which explains a lot of this week's winners and losers:

• Hermès vs. buy now, pay later. The WARC Podcast (Sept 22) set Hermès growing revenue to €16 billion "without discounting" against one in five British adults using buy-now-pay-later "just to make ends meet." In the US, the top 10% of earners now account for more than 45% of consumer spending. The guests' warning to mid-priced brands: "The middle ground that many brands have relied on for scale is becoming harder to defend."
• A record share of stretched households. InvestTalk cited the Financial Health Network's 2026 Pulse study of 7,600 households. A record 17% are now "financially vulnerable", and 16.5 million households dropped a financial tier in a year versus 13.8 million who moved up.
• Weight-loss drugs are changing sizes. The same episode said retailers are reporting more demand for smaller sizes as GLP-1 drug use spreads, which is a short-term supply-chain cost for apparel companies.

Why it matters: This split fits the week's other stories. Hermès and Ralph Lauren are aiming at the top of the market. Nike, Lululemon and Under Armour sit in the squeezed middle, where shoppers have the most alternatives.

Quick hits

• Ulta has left Target's stores. Remarkable Retail (Sept 22): Ulta's shop-in-shops are gone, replaced by Target Beauty Studio in about 600 stores. Host Steve Dennis called it "not an insignificant source of volume" for Ulta but expects loyal customers to keep going to Ulta's own stores: "I suspect they won't lose all that much." The next reports from both companies will tell.
• Steph Curry now wears Li Ning. Morning Brew Daily (Sept 21): Curry ended his 13-year Under Armour deal in November 2025 and said in May that he would sign with China's Li Ning. That makes two superstars leaving US incumbents for challengers in a year.
• Nike wants shoes back. Brew Markets reported that Nike's "Replay" pop-up in New York offers store credit for trade-ins, plus repairs and free cleaning. The hosts read it as a response to criticism that Nike's shoes are disposable.
• LeBron's advice. Also on Brew Markets: LeBron James, whose lifetime Nike deal is reportedly the biggest guarantee in company history, said this summer that Nike has to get back to listening to young shoppers, and that it "can't afford to lose its cool."

What went quiet this week

• European luxury (LVMH, Kering, Richemont, Prada, Burberry) and China demand: apart from the Hermès figure on WARC, no podcast gave investor-level substance.
• Watches and jewelry: silent.
• Contract manufacturers (Pou Chen, Yue Yuen, Feng Tay) and footwear sourcing: silent. The tariff podcasts we found covered toys and Canada, not shoes.
• Dick's and Foot Locker: no follow-up to last week's sell-off.
• Beauty investor talk (Estée Lauder, L'Oréal, Coty, Shiseido, e.l.f.): only the Ulta/Target note and a founder interview with no financial detail.
• Travel retail, Macau and mall landlords: silent, except that Simon Property was removed from the S&P 100 (Brew Markets noted its shares are still up about 10% this year).

The week ahead

• Nike Q1 fiscal 2027 (June–August 2026), Thursday October 1, after the close. With last year's profit leaning on a nearly $1 billion tariff refund, focus on underlying gross margin, the split between wholesale and direct sales, and whether "casual running" keeps getting better.
• On: watch whether the market believes the three-year targets or focuses on the Q3 guide of 17% against 19% expected.
• Lululemon: the first strategy signals from O'Neill, and whether Chip Wilson keeps pushing.
• Ulta vs. Target Beauty: the first read on how much volume moved.

All insights above come from the podcasts linked. Figures are as stated by hosts and guests; we haven't independently verified them.