Nike’s Skims Line Launches Today. Will It Be Enough for the Struggling Stock?

Nike will launch its collaboration with Kim Kardashian’s Skims brand on Friday. (Courtesy Nike)

Key Points

• Nike is launching a collaboration with Kim Kardashian’s Skims brand on Friday, debuting collections of activewear and underwear.
• Nike hopes the Skims name boosts sales as part of CEO Elliott Hill’s turnaround strategy.
• The NikeSKIMS partnership aims to reinvigorate sales and re-engage female consumers, though initial financial benefits may be limited.

Nike launched its long-awaited collaboration with Kim Kardashian’s Skims brand on Friday, as the struggling sportswear company attempts to win back business from female consumers.

The duo debuted their joint NikeSKIMS activewear brand with seven collections of women’s clothing and underwear, the companies said. Sales began on Nike and Skims’ websites at 10 a.m. Eastern time, with products also available at select retail locations.

The collaboration is a big swing for Nike, complete with a branded film, a marketing campaign featuring more than 50 Nike athletes, and dozens of new products.

Nike shares were down 1.3% to $68.37 Friday. The stock has fallen 8.5% this year as of Thursday’s close and is off 61% from its all-time high on Nov. 5, 2021, according to Dow Jones Market Data.

Co-founded by Kardashian in 2019, Skims has emerged as a competitor in the womenswear market, attracting a cultlike following among younger consumers. The privately held company was valued at $4 billion in its 2023 Series C funding round.

Nike will hope the Skims name helps reinvigorate sales growth as part of CEO Elliott Hill’s “Win Now” turnaround strategy. The collaboration alone may not paper over the company’s short-term issues, but it could help bring the iconic swoosh back into the cultural spotlight, analysts said.

“Hill is prioritizing ubiquity, expanding Nike’s global reach through strategic partnerships and retail expansion,” Jefferies analyst Randal J. Konik wrote in a research note earlier this week.

Recent initiatives include collaborations with Urban Outfitters and Lego, and new women-focused retail doors like Aritzia and Amazon.com . Those partnerships give Nike some momentum heading into the release next Tuesday of fiscal first-quarter earnings.

Jefferies has a Buy rating for Nike stock and a $115 price target.

But the brand still has a long way to go after its yearslong skid. Nike has ceded share in the women’s sportswear market to companies like Lululemon Athletica in recent years, Cristina Fernández of Telsey Advisory Group told Barron’s. NikeSKIMS is an effort to tap into that audience, but it may take time to yield results.

“Initially, the product likely is not going to be a big financial benefit for Nike given quantities will likely be limited online and the product will only physically be in select stores,” Fernández said. That could change as NikeSKIMS expands globally, including through wholesale partners, she added.

Wall Street expects first-quarter sales at Nike of $11 billion, down 5.5% from last year, according to FactSet. Analysts also see sales declining in the November quarter before returning to growth after that.

“The brand still seems a few quarters away from reaching stabilization,” Fernández wrote in a research note this week. “And the company has several profit headwinds as the transformation takes place.”

Fernández reiterated a Market Perform rating for the stock and boosted her price target to $75 from $70.

Write to Nate Wolf at nate.wolf@barrons.com