After Nike's Drop, Here Are the 3 Retail Growth Stocks I'd Buy Today

Amazon reported total revenue up 12% to $716B with online store sales +9% YoY to $269B in 2025, leveraging AI (Rufus), advertising, subscriptions and cloud; stock trades near a ~16x trailing operating cash flow multiple. Lululemon delivered roughly +1% YoY sales with international revenue +17% and China +24% YoY, trading at ~12x forward P/E as North American recovery hinges on spring product launches. On Holding posted revenue +23% YoY last quarter (fourfold since 2021) and a record gross margin of 64%, trades ~21x forward earnings with analysts forecasting ~26% annualized EPS growth despite the stock being ~50% below its highs.

Analysis

Amazon’s AI and systems investments create a rising-yield dynamic in two places: higher monetization per discovery event (ads + AOV) and structurally lower customer acquisition cost as personalization shifts spend in-platform. The second-order margin benefit is likely to be concentrated in advertising and subscription economics first, turning incremental GMV into disproportionately higher EBIT over 12–36 months as fixed tech investments scale.

Lululemon’s international play is not just revenue growth — it’s a margin expansion lever through higher full-price sell-through, better studio/store productivity and lower markdown rates versus peers once localized assortments stick. That makes each new region a high-IRR roll-out where operating leverage hits in year two; FX and cultural missteps remain the biggest execution risk as scale accelerates.

Smaller, premium footwear (On) can outpace larger incumbents on gross margin expansion, but durability depends on product cadence and distribution discipline: wholesale can fuel reach but risks margin dilution. At the category level, expect raw-material suppliers and mid-tier brands to face inventory reallocation and margin pressure as premium brands capture more wallet share, creating an opening for tactical pair trades between premium and scale players over 3–12 months.

Key Decisions for Investors

• AMZN — Long 18–24 month LEAP calls (delta ~0.5–0.65) sized for 3–5% portfolio risk, financed by selling 3–6 month calls to trim cost (collar-like). Timeframe: 12–36 months. R/R: asymmetric upside (objective +30–60%) vs protected downside (~15–25%) via rolling short calls/collars.
• LULU / NKE pair — Long LULU and short NKE (equal-dollar) for 9–15 months to capture international outperformance vs scale-driven discounting. Timeframe: 9–15 months. R/R: target 25–40% relative outperformance; set pair stop if relative moves 20% against to limit execution risk.
• ONON — Buy a 9–12 month OTM call spread (cost-limited) with strike selection 15–25% OTM to capture re-rating on margin durability; alternatively, a small outright long equity position with a 20% trailing stop. Timeframe: 6–12 months. R/R: if product cycles re-accelerate, expect 2–4x on option position; downside limited to premium paid.
• Risk hedge — Add a 3–6 month consumer-discretionary hedge (index puts or small NKE puts) equal to ~25% of gross long exposure to protect against macro-led demand shock that would compress multiples across the sleeve. Timeframe: 3–6 months. R/R: insurance cost vs avoiding a large portfolio drawdown in a softening consumption scenario.