• Nike is trying to reclaim its sports apparel edge by focusing on performance wear.
• The company previously overcame challenges by boosting product launches.
• Nike will have to "Just Do It Again," analysts said.

Nike should use its own playbook to stage a proper comeback in sports apparel, analysts said.

The company's sales have been slumping, with revenue down 8% in Q2 FY25 from the year prior. It's turned to a new strategy and a new CEO to help recover and drive product innovation. One of its biggest challenges has been competition from brands like Hoka and On.

For help, it should look to its last period of challenges in 2015 to 2018, BMO analyst Simeon Siegel wrote in a February note titled "Just Do It Again." That's when Adidas' Ultra Boost sneakers, which first launched in 2015, threatened Nike's growth in North America.

Spiegel said the company used four strategies to overtake Adidas in incremental revenue dollars: upping product launches, re-elevating the Jordan brand, accelerating demand creation spending, and cleaning up inventory.

Some of those "key shifts" could boost its firepower in reclaiming its position in running now, Spiegel said.

Nike has already said that it will focus on it performance wear for athletes, particularly running. During its Q1FY25 earnings call, CFO Matthew Friend said running has been "one of our toughest fights over the past few years." It trailed behind ASICS, Adidas, Brooks, and Hoka in running-shoe launches in 2024, according to data from BMO.

Back in 2017, Nike responded to the Adidas Ultra Boost with the Epic React, BMO analysts said. But it'll have to be a "fast copier" again to compete with Hoka, Spiegel said in the note.

Hoka is currently driving the trend of ultra-cushioned shoes in the sport, and "although it doesn't sound glamorous, we believe a line-up of Hoka resembling shoes may be exactly what is needed," Spiegel wrote.

"They kind of lost their way in terms of product innovation, and I think Hoka, Brooks, and other players started taking market share," Brian Yarbrough, an analyst at Edward Jones, said.

It looks like Spiegel's advice to increase product launches is already in Nike's sights, with running-shoe Vomero 18 expected on February 27. The company said the Vomero Plus, the Vomero Premium, and the new Structure model will come "later in 2025."

If it can launch good innovative products, consumers may be "willing to trade away out of Hoka, On," and more that have been gaining market share, Yarbrough said.

As for demand creation, Nike reported $1.1 billion in demand creation expenses to investors for Q2 FY25. It paid for a 60-second spot for Super Bowl LIX — its first ad during the event in nearly 30 years. It starred a number of female athletes, including Caitlin Clark and Sha'Carri Richardson.

The investment paid off as it topped other Super Bowl advertisers in engagement actions, a key metric in the business.

However, Nike is going to need products that are "on point with what the consumer wants" to capitalize, Yarbrough said.

• Nike plans to launch new running shoes this year.
• In 2024, Nike trailed competitors like Asics and Adidas in running-shoe launches.
• BMO analysts are optimistic about Nike's 2025 lineup despite past performance challenges.

Nike's shoe competitors were on a tear in 2024, so expectations are high for the sportswear giant this year.

Data from BMO indicates most footwear brands launched at least six shoes in 2024. Asics, Adidas, Brooks Running, and Hoka led the way in running-shoe launches, but Nike had fewer than six.

As part of its moves to improve sales, Nike is getting back to basics. That includes redefining itself as a running brand. To keep up with the competition, it will have to prove that in 2025.

According to BMO, Asics launched new models or updated performance running models 11 times last year, while Adidas and Brooks launched or updated 10 and nine models. Nike only updated its running-shoe lineup and released no new models.

Nike has said it will launch the Pegasus Premium in late January and the Vomero 18 in late February. It said the Vomero Plus, the Vomero Premium, and the new Structure model would come "later in 2025."

Retail analysts at BMO say that with this running lineup, Nike's launch schedule in 2025 "looks more promising." Its new product line received a positive response from consumers and industry watchers when it was announced at The Running Event, a trade show held in November.

"We believe NKE's inflection is a question of 'when' compelling product begins to roll in rather than 'if,'" BMO analysts wrote.

Brands like On Running and Hoka have been growing in popularity over the past few years. Brooks said this summer that it reached a quarterly revenue record, adding that its North American sales in the second quarter grew by 19%.

In October, Nike brought a veteran employee, Elliott Hill, out of retirement to take over as CEO, and he has his work cut out for him. Revenue for the Nike brand grew by only 1% in the latest fiscal year, dragged down partially by declines in North America.

The company has acknowledged that it will take time to see its desired results.

"A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation," Matthew Friend, Nike's executive vice president and chief financial officer, said during its first-quarter earnings call.