ONON & LULU Inflections; Sports Ecosystem Tracker Stable; NKE Earnings & China Thoughts: The Optimal Sports Section

By David Katzman and David Schick and Jonathan Feeney and Jack Hermann Published on July 1, 2026 PDF

Sports Ecosystem trends stayed slightly negative this week, our sector equity indices primarily underperformed, and we dive into our analysis on NKE and especially in China following yesterday’s reported earnings.

Summary: (1) Optimal’s Sports Ecosystem revenue trend was essentially unchanged at -0.7% T8W y/y vs. -0.7% T16W, with Sports Betting & Data spending remaining the strongest sub-index; (2) Sports equity indices broadly underperformed the S&P 500 (+1.9% w/w), with the Equal-Weight (+0.4% w/w) and Cap-Weighted (+0.9% w/w) Ecosystem Indices both lagging, though the Sports Betting & Data Index (+3.4% w/w) and Sports Fandom Index (+2.0% w/w) outperformed; (3) ONON spending and digital traffic are both positive and inflecting positively, while LULU spending and foot traffic are both negative and inflecting further negatively (digital traffic remained positive y/y but decelerated as well); (4) NKE reported Q4 FY26 earnings with revenue flat y/y and we unpack signs of green shoots for NKE China below.

The Optimal Sports Ecosystem Index revenue tracker remains slightly negative at -0.7% T8W y/y (and -0.7% T16W y/y). Sports Betting & Data spending remained the strongest sub-index at +7.0% T8W y/y (vs. +6.6% T16W), matching last week’s number. Sports Fandom spending decelerated meaningfully to -7.7% T8W y/y on -6.1% transactions and -1.7% ticket, from -0.8% last week. Sports Participation spending accelerated relative to last week but was still deeply negative at -7.5% T8W y/y (vs. -9.8% last week) due to a -14.0% drop in transactions, partially offset by a +7.6% ticket increase. Experiences & Entertainment spending remains sharply down y/y.
Sports equity indices broadly underperformed the S&P 500 this week. The Equal-Weight Optimal Sports Ecosystem Index (+0.4% w/w) and the Cap-Weighted Optimal Sports Ecosystem Index (+0.9% w/w) both underperformed the S&P 500 (+1.9% w/w). Optimal’s Sports Betting & Data Index (+3.4% w/w) outperformed the broader market, while the Sports Fandom Index (+2.0% w/w) performed in line with the S&P 500 and the Sports Participation Index (-0.9% w/w) underperformed.
ONON (+): Spending continues to grow at +7.9% T8W y/y (+1.1% inflection relative to longer-term trend). Digital traffic remains strong at +42.1% T8W y/y (+1.4% inflection). Sentiment is slightly down (Twitter sentiment -2.2% m/m, news sentiment -3.2% m/m).
LULU (–): Spending is down sharply (-20.6% T8W y/y) and inflecting further negatively (-4.2% relative to longer-term trend). Foot traffic is also negative (-4.7% T8W y/y) and inflecting further negatively (-0.4% relative to longer-term trend). Digital traffic growth remains strong in absolute terms (+36.6% T8W y/y) but continues to decelerate (-8.4% inflection). Twitter sentiment fell -6.4% m/m and news sentiment fell -5.4% m/m.
Weekly NKE Analysis: NKE reported Q4 FY26 earnings on June 30th, with revenue flat y/y at $46.4B (down -2% constant currency) and adjusted EPS of $0.20 though results leaned on a ~$986M tariff-recovery benefit. North America grew +3% CC while Greater China fell -17% CC, and management guided to continued softness through 1H FY27. US digital traffic remained strong, accelerating further to +8.5% T16W y/y in the most recent week (up from +5.2% last week and -3.7% in mid-March), and global digital traffic also continues to accelerate (+4.8% T16W y/y vs. +3.0% last week). Optimal’s Online Monitor accelerated sharply to +13.9%, its highest value since 2023, while the In-Store Monitor remains negative at -5.4%. NKE’s Gen Z Attention Economy Monitor reached +14.4% in May (up from +0.3% in April), reflecting strong Gen Z engagement. However, China e-commerce data shows Nike down -8% y/y in May compared to overall growth of +6% y/y. Additionally, following the earnings print, monthly sentiment also turned negative, with Twitter sentiment down -6.2% m/m and news sentiment down -1.8% m/m.

NKE China Analysis

Nike’s Greater China business posted its weakest quarter of FY26 in fiscal Q4 (May-2026), with revenue falling -17% on constant currency (CC) to $1,297M while regional operating income fell to $243M from $304M in the same quarter a year earlier. We do continue to see potential green shoots in brand traction inflection.

NKE China Quarterly Revenue Trend

Source: Optimal Advisory analysis, Bloomberg

The decline was broad-based across the model’s segment detail: footwear fell to $938M (down -17% CC), apparel to $334M (down -15% CC), and equipment to $25M, with China now having declined year-over-year in every quarter of FY26 (-10% CC in Q1, -16% in Q2, -10% in Q3, -17% in Q4).

NKE China Revenue by Segment

Source: Optimal Advisory analysis, Bloomberg

The alternative e-commerce data shows a similar trend. On an aggregate basis, Nike’s China online sales were down -8% y/y in May, following -10% in April and -22% in March, and negative in seven of the last nine months tracked. Nike’s Tmall (its largest platform) was down -4% in May with March down -33%, and JD.com fell -28% in May and has been persistently negative, while Douyin turned modestly positive (+5% in May) as a more positive sign.

NKE China E-Commerce Sales by Channel

Source: Optimal Advisory analysis, Bloomberg

Additionally, domestic and rival brands outgrew Nike, including Adidas (+41%), Li Ning (+12%), The North Face (+39%), Wilson (+26%), and Columbia (+19%), while Nike was one of the few major brands in outright decline. Nike’s Greater China revenue of $1,297M also now trails Adidas’s roughly $1,328M in the region (March quarter), a reversal of Nike’s historical leadership. Management has guided to continued China declines through at least the first half of fiscal 2027, prioritizing inventory cleanup and brand repositioning over near-term sales.

NKE China E-Commerce Sales vs. Competitors

Source: Optimal Advisory analysis, Bloomberg

Headlines

Headline: Omnicom Media Group is set to secure Adidas’s $512M global media account, beating out WPP (whose EssenceMediacom previously managed the business) and Publicis; the account will be led by Omnicom agency PHD as Adidas continues to ramp marketing investment, having spent over $3.4B in 2025.
- Link: Report: Omnicom set to land Adidas’ global media account
Headline: Pro Padel League has signed a deal with USA Sports to air five 2026 championship matches on CNBC, marking the first time the North American padel league will have matches air exclusively on a national U.S. network.
- Link: Pro Padel League to air on CNBC through new USA Sports deal
Headline: Telemundo and Fox Sports combined to average a record 9.7M viewers across 72 FIFA World Cup group stage matches, with English-language coverage up 92% vs. 2022 and Spanish-language coverage up 122%; the total was just shy of the NCAA Men’s Basketball Tournament opening rounds (10.1M viewers).
- Link: Telemundo, Fox wrap FIFA World Cup group stage with record audience numbers

Game of the Week:

England vs. Mexico (July 5th 2026 @ 8:00 PM EST): England will face 4-0 host nation Mexico in the Round of 16 at Estadio Azteca, with Mexico having yet to concede a goal in the tournament and Harry Kane tallying a late brace in today’s 2-1 comeback win over DR Congo.