Dive Brief:

• Nike remains the most popular athletic brand among U.S. consumers, but its lead is slipping, according to a new survey conducted by Cowen & Co. and cited by MarketWatch.

• Among the 2,500 U.S. consumers surveyed, 41% said Nike is their top choice in apparel — the largest percentage of any brand, but down from 44% a year ago. Nike sneakers also remain the favorite of 51% of consumers, but fell from 55% last year.

• Perhaps even more problematic, younger consumers are less enamored with the Nike brand, and rivals Under Armour and Adidas are catching up. Nike’s popularity with millennial men slipped from 50% to 48%, and plunged from 54% to 46% among millennial women.

Dive Insight:

Analysts this week are bickering over whether investors are wisest to hold or buy Nike stock. Cowen analyst John Kernan contends that Nike’s profitability, market share and growth potential may have peaked, according to Barron’s, noting that to combat the trend, the brand has been forced to sell apparel at lower prices via retailers like Kohl’s and Dick’s Sporting Goods.

Earlier this year, an uptick in inventory levels at Nike also had analysts worried: Inventories rose 11% to $4.9 billion in Q1 from the year-ago period, driven by a 3% increase in wholesale unit inventories, increases in average product cost per unit and e-commerce growth. Both the inventory build-up and accompanying future orders slowdown likely reflected healthy growth at Under Armour and Adidas, too, analysts said.

BR Capital Markets & Co.’s Susan Anderson noted in July that still more excess inventory was likely hiding at Nike outlet stores and off-price chains like T.J. Maxx. "I'm skeptical because we saw a pretty big slowdown in North America last quarter, so for it to flip around so quickly usually does not happen," Anderson said. "There is some inventory build in North America that is going to take a while to work down.”

Adidas poses the most significant threat to Nike's brand because the company is finding favor with younger consumers thanks to its new emphasis on streetwear and designer styles, in addition to its traditional sports focus. Plus, Adidas may be benefiting from expertise it poached directly from Nike itself.

“North America is playing a much bigger role in the design language of Adidas as the brand now has three ex-Nike designers based in Brooklyn that have a large impact on the product design of products sold globally,” Cowen wrote in a separate note published Tuesday, according to MarketWatch. “Adidas acknowledged that it needed to improve the brand’s perception among high school and college athletes by focusing on grassroots marketing campaigns combined with key athlete endorsers.”

Not everyone is down on Nike, however. HSBC analyst Erwan Rambourg said earlier this week that brands stealing the ball here and there doesn’t necessarily mean much about Nike’s long range prospects. “Reality isn’t that grim,” Rambourg said Monday, according to Barron’s. “Even though we accept that alternative brands may be gaining share at times, we feel the company is still poised for superior growth and returns long term.”