MW Nike's stock is the Dow's best performer today, after joining forces with Kim Kardashian

By Bill Peters

Analyst says partnership is 'step in the right direction,' after sluggish stock performance

Shares of Nike Inc. rallied on Tuesday after the athletic-gear giant said it would join forces with Kim Kardashian's SKIMS shapewear clothing brand to launch a new line of fitness gear this spring, as it tries to broaden its appeal to women following a drop in its stock price last year.

The stock was up 4.4% on Tuesday, putting it on track to be the Dow Jones Industrial Average's best performer for the day.

The new fitness gear from the companies will be called NikeSKIMS and will include clothing, footwear and other accessories. The brand will launch its first products at select stores and online in the U.S. this spring, with a worldwide expansion coming next year.

In a release, Nike $(NKE)$ said the collaboration would "bring something new and unexpected to an industry that is craving something different, and to invite a new generation of women into fitness with disruptive product designed to meet their needs in both performance and style."

The company said SKIMS had proposed a shared product line, but Nike "saw an opportunity for something even bigger, making way for NikeSKIMS." Nike said NikeSKIMS "is inspired and informed by athletes, sport and the female form."

Nike's new chief executive, Elliott Hill, has said he wants product design to be more directly informed by athletes, and has said the company has lost its "obsession with sport." Others have worried that the company deluged the market with throwback sneakers, diluting its relevance in the process.

Hill became CEO last year, replacing John Donahoe. But analysts have said the company's turnaround plans could take time to materialize.

Nike made the announcement as celebrity brands make for bigger competition to their legacy counterparts, and as online influencers shorten trend cycles. Meanwhile, three years of hefty cost-of-living increases have made shoppers more reluctant to buy sneakers and clothes. Over the past 12 months, Nike's stock has fallen 26.3%.

Jefferies analyst Randal Konik, in a note on Tuesday, said that against that backdrop, the partnership with Kardashian was a "step in the right direction." But he stopped short of taking a more optimistic stance on the stock.

"We view the NikeSKIMS partnership favorably on the grounds that it is a promising step forward in the fitness and activewear market, leveraging the strengths of NIKE's innovation and SKIMS' inclusivity," he said.

"Although we maintain our Hold rating due to near-term headwinds, we see limited downside for NKE shares at current level," he continued. "In our view, the long-term potential for growth and market disruption remains compelling, making this collaboration a noteworthy development in the industry."

-Bill Peters

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February 18, 2025 13:18 ET (18:18 GMT)

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