Who Is the Likely Successor of Nike: DECK or ONON?
The athletic footwear market has welcomed newcomers. Smaller performance-focused brands are winning runners and fitness consumers with highly differentiated products, while Nike’s broad mass-market positioning makes it harder to sustain premium pricing.
DARK HORSE
The sports giant Nike has been struggling. Its core growth engine has stalled while competition has intensified across nearly every category. Over the last several years, Nike leaned heavily into direct-to-consumer sales while reducing dependence on wholesale partners like Foot Locker, Macy’s, and DSW. That strategy initially boosted margins, but it also weakened shelf visibility and allowed rivals such as On Holding, Hoka’s parent Decker Brands to gain market share with fresher product cycles and stronger specialty retail presence.
Nike’s innovation pipeline has also disappointed investors. The company became overly dependent on legacy franchises like Air Force 1, Dunk, and Jordan retros, while newer performance categories failed to generate the same consumer excitement. Unique to Nike is its China problem. China was once its most important profit driver, however, Chinese consumers have shifted toward domestic sportswear brands such as Anta Sports and Li Ning, hurting its sales and dragging its overall performance.
These plights have contributed to slowing revenue growth, elevated inventories, and increased markdown activity, which compresses gross margins. Management has responded with cost cuts, layoffs, and renewed wholesale partnerships, but investors increasingly view these moves as defensive rather than growth-oriented. The turnaround story that investors are banking on is a little misty at this point.
Nike shares have fallen dramatically from their pandemic-era highs above $170 and now trade near multi-year lows around the mid-$40s range. Despite that decline, valuation risk remains because earnings expectations have also deteriorated sharply. Nike still trades at roughly 30x earnings, which is expensive for a company experiencing declining sales growth, shrinking margins, and heightened competitive pressure. Investors are questioning whether Nike deserves a premium multiple anymore, especially compared with faster-growing athletic and apparel peers. Its peer Under Armor is in a similar boat, although the situation there looks much worse.
The athletic footwear market has welcomed newcomers. Smaller performance-focused brands are winning runners and fitness consumers with highly differentiated products, while Nike’s broad mass-market positioning makes it harder to sustain premium pricing. Two recent uprisers are Switzerland-based On Holdings AG (ONON), which makes On-Running shoes and apparels, and US-based Decker Brands (DECK), which makes Hoka and UGG-branded shoes.
Hoka and On are winning consumers largely because they focused relentlessly on performance innovation and specialty credibility at the exact moment Nike became more dependent on lifestyle retros and broad mass-market appeal. Hoka built its identity around maximal cushioning, comfort, and recovery-focused running shoes that appealed not only to elite runners but also to casual runners, walkers, nurses, and older consumers seeking comfort. On differentiated itself with its CloudTec cushioning system and minimalist Swiss design aesthetic, creating a premium product that felt technologically distinct. Both brands created clear product identities that consumers immediately understood, while Nike’s product lineup became crowded and overly reliant on classic franchises rather than breakthrough running innovation. Although Nike still dominates globally in scale and cultural influence, consumers increasingly want brands that feel specialized rather than universal. Younger buyers also tend to seek differentiation; wearing On or Hoka signals participation in a fitness-oriented lifestyle rather than mainstream sneaker culture.
Valuation wise, after both On and Decker have reported earnings recently, ONON is traded around 40x of TTM earnings whereas DECK is traded at 15x. By contrast, Nike is traded at 30x TTM earnings. Investors continue to pay up because Nike remains one of the strongest brands in the world with enormous global scale, elite marketing capability, and long-term profitability potential. But the market is increasingly questioning whether Nike deserves a premium valuation while competitors are growing much faster and innovating more effectively.
If you believe Nike can ultimately turn around, stick with the old dog. But if you believe the new consumer generations will not be as nostalgic as their older peers on Air Jordans, ON and Hoka can become the new kings of sportswear.
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