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Tesco ’s fall from grace was sudden and brutal. an accounting fraud, a horse-meat scandal, and the quick end to a foray into some foreign markets wiped 60% off the shares of Britain’s biggest grocer in 2014, sinking to 150 pence ($1.96).

However, new management, a smart acquisition, and a focus on rebuilding its core United Kingdom business has pushed the stock back to 248 pence. It could have further to go. Next month, finance director Alan Stewart will reveal a raft of new ways that the firm hopes will unlock additional shareholder value.

The retailer (ticker: TSCO.UK), which sells both food and clothing, employs 440,000 staff members at 3,400 U.K. stores and supermarkets across India, Malaysia, Thailand, and Eastern Europe. It owns Tesco Bank and runs a loyalty program called Dunnhumby, which analyzes data. Tesco has a market value of 24 billion pounds sterling and last month beat analyst estimates with a 34% increase in fiscal-year operating profit to £2.21 billion on sales of £56.9 billion.

Just this past week, industry data showed that Tesco had maintained its position as the U.K.’s biggest grocer, controlling 27.3% of the market. Kantar Worldpanel research for the 12 weeks ended April 21 showed that it had dwarfed two rivals, Sainsbury (SBRY.UK) and Walmart (WMT)-owned Asda.

But the firm is still a shadow of its former self. Back in 2010, Tesco was taking on Walmart in its own backyard with its Fresh & Easy convenience startup in three Western U.S. states. It had a £4.2 billion business in South Korea and had broken into China. Its shares peaked at 484.5 pence that year, and by 2012 group trading profit nudged £4 billion.

Then the wheels came off. In 2013, £300 million was wiped off Tesco’s value when horse meat was found in its—and rivals’—hamburger meat. A year later, it admitted “pulling forward” income from subsequent reporting periods and eventually paid a £129 million fine to the Serious Fraud Office.

A new management team led by CEO Dave Lewis from Unilever (ULVR) was parachuted in. He scaled back the international interests, ditching Korea, Turkey, and China—Fresh & Easy had already been sold—to focus on the core U.K. market.

Simple levers have been pulled, such as hiring more staff to improve service, axing complicated price promotions, and working closely with suppliers to improve the value of its products. In 2018, it spent £3.7 billion to buy grocery wholesaler Booker, which supplies independent convenience stores and restaurant chains.

In an April note reiterating his Buy recommendation, HSBC analyst Dave McCarthy wrote that “Tesco is in its best position in a decade. Tesco...is making it clear it is targeting cash profit growth, free cash flow, and EPS. More details behind this will be unveiled at a capital markets day in June.”

Finance Director Stewart says he will use the event to focus on “three pillars”—product, channel, and customer. He told Barron’s, “There’s a lot of what we see as still untapped value opportunities for Tesco—improving our offer for customers, further reducing our costs, and generating cash—and we look forward to sharing more next month.”

Among the items expected: further details of its buying tie-up with French rival Carrefour (CA), new delivery initiatives, possibly sharing some routes with Booker, new use of data for its loyalty program customers, and new house-brand products. The idea is to cut costs and boost earnings.

UBS forecast in a February note that net earnings would double to £1.7 billion by 2020 from 2018’s £837 million. It increased its Tesco share-price target to 305 pence from 300 pence, about 20% over recent levels.

It might be time to go shopping again at Tesco.

Uber Technologies is set to go public this week in the most closely watched stock market debut since Facebook ’s in 2012.

The bull case for Uber is that it will become the next Amazon.com (ticker: AMZN). Investors, the bulls say, should focus on what Uber (UBER) has called its “massive” global opportunity in ride-hailing and other businesses, rather than on losses running at a $4 billion annual rate. Amazon sacrificed profitability for growth over many years and went on to establish dominance in e-commerce and cloud computing, and gain a nearly $1 trillion market value. Fans say that Uber is on a similar course.

Uber, however, looks less like an Amazon and more like a glorified version of Lyft (LYFT), Uber’s smaller rival. Lyft shares have so far been a dud, falling 15% from their March initial-public-offering price of $72 to a recent $61, as investors wonder when profits will materialize.

Investors may want to steer clear of the Uber IPO for multiple reasons. Revenue growth is slowing. Competition in much of the world remains fierce. Profitability is nowhere in sight. There are legal and regulatory risks highlighted by a cap on ride-hailing licenses in New York City and efforts to reclassify Uber drivers as employees rather than as independent contractors.

None of that is likely to mute the clamor over the IPO. Uber plans to sell $10 billion of stock—as many as 207 million shares in a range of $44 to $50 a share. At the midpoint, Uber would be valued at $86 billion.

Yet the biggest, looming risk for Uber—one that may not be fully appreciated by investors—is autonomous driving, which threatens to disrupt the entire ride-hailing business starting in the mid-2020s. It isn’t yet clear how that market will shake out, but Alphabet ’s (GOOGL) Waymo unit  could emerge as a deep-pocketed, technologically superior competitor to Uber in the next decade.

For now, just making sense of Uber’s financial statements is difficult. They include two important measures of revenue, two types of driver incentives, terms like “core platform contribution margin,” and overstated opportunities based on overly expansive definitions of what Uber calls its “total addressable markets” globally.

“Uber’s pitch to investors is that the markets are gargantuan and total in the trillions of dollars, but it’s really an urban car service,” says Mark Shurtleff, an independent research analyst and founder of Green Wheels Mobility Solutions.

Uber disclosed in its prospectus that nearly a quarter of its 2018 ride-sharing gross bookings, the total amount spent on its platform, was in just five metropolitan areas: New York, San Francisco, Los Angeles, London, and São Paulo.

The company is more than ride-hailing; it has, for example, expanded its Uber Eats meal-delivery business. Still, revenue growth slowed to 20% in the first quarter, to $3.1 billion, from 69% in the March 2018 quarter.

Uber’s definition of revenue, moreover, is overstated because it doesn’t reflect certain costs that Uber calls “excess driver incentives”—bonus payments to drivers on top of existing incentives and the drivers’ portion of the fare.

The better sales figure, core-platform adjusted net revenue, which factors in these payments, totaled $2.6 billion in the first quarter, up 8% from first-quarter 2018, and was little changed in recent quarters.

One of the bullish arguments for Uber is that these payments will moderate over time. In a video on RetailRoadshow.com, Uber Chief Financial Officer Nelson Chai said incentives to drivers and consumers have weighed on financial results. “We expect these pressures to abate in the long term, assuming our competitors choose to focus on profitability,” Chai said. “We strongly believe in the long-term economics of our business.”

One investor told Barron’s that Chai’s comment amounts to a “hope, not a plan.” And Uber’s losses show no signs of abating. It had about $1 billion of red ink in the first quarter, double the loss in the year-earlier period. D.A. Davidson analyst Tom White sees little relief ahead, with a projected $3.7 billion in losses this year and $3.5 billion in 2020. He began coverage of Uber with a Neutral rating and $53 price target.

Then there is the competitive threat from Waymo, which is already rolling out robo-taxis in Phoenix.

“By 2025, we believe Waymo will have robo-cab services, sold directly to consumer, in 15 to 20 major U.S. markets, with GM/Cruise in a handful,” Paul Sagawa, an analyst with investment research firm SSR, wrote in a report. “This is a very difficult situation for Lyft and Uber.”

Waymo, Sagawa contends, is way ahead of Uber in self-driving-car technology, including critical three-dimensional maps of roads and surrounding areas that enable its cars to operate more safely and efficiently.

Robo-taxis may transform the industry because operating costs could be half that of cars with drivers. A widespread rollout of robo-taxis could “preclude either company [Uber or Lyft] from ever reaching profitability,” Sagawa wrote.

Uber has its own autonomous-vehicle technology unit, and it secured investments—and effective endorsements—from SoftBank’s Vision Fund, Toyota Motor , and another Japanese investor last month in a deal that values the Uber unit at $7.3 billion.

Waymo, which has orders for 80,000 cars for its robo-taxis, may need only to demonstrate successful robo-taxi services in a few cities to spook Uber investors.

Former Uber CEO Travis Kalanick acknowledged the risk in a 2016 interview with Business Insider. “The world is going to go self-driving and autonomous,” he said. “If we weren’t part of the autonomy thing? Then the future passes us by, basically, in a very expeditious and efficient way.”

An expected $86 billion market value anticipates a lot of success for Uber that isn’t validated by steep current losses and a threat to its business from autonomous cars.

The best play in the takeover battle over Anadarko Petroleum is Occidental Petroleum .

Its shareholders have so far been cool to its bid for Anadarko (ticker: APC), which topped a rival $33 billion offer from Chevron (CVX). Shares of Occidental (OXY) fell 5%, to $58 last week, even after picking up a $10 billion financing commitment for its takeover effort from Warren Buffett’s Berkshire Hathaway (BRK. B). Occidental’s stock was already a poor performer, falling 22% in the past year and trading near a five-year low.

Yet if Occidental loses the takeover contest, its shareholders would be the winners. Here are three scenarios that could boost the stock:

• Chevron prevails, resulting in a relief rally in Occidental shares, which traded at $68 before rumors surfaced that it might outbid Chevron.

• An activist investor could surface in Occidental and try to scuttle the Anadarko bid and seek to break up the company or urge Occidental to self itself. (Carl Icahn has a small stake in Occidental, Bloomberg reported on Friday.)

• Occidental shareholders could vote down the Anadarko deal. As it now stands, Occidental needs shareholder approval for the deal.

At 15 times projected 2019 earnings of $3.75 a share and yielding 5.4%, Occidental shares look appealing. And the company may be worth over $80 a share to a buyer, says David Katz, president of Matrix Asset Advisors, an Occidental holder. He opposes Occidental’s pursuit of Anadarko as does T. Rowe Price, a 3% Occidental holder.

Chevron, whose shares were little changed at $117 last week, also looks inexpensive, trading for 16 times projected 2019 earnings and yielding 4%.

“Both Chevron and Occidental have been punished since this whole saga began,” says Raymond James analyst Pavel Molchanov. “The market would prefer that neither company wins.” He thinks there’s little downside for Occidental stock even if it wins.

With a market value of $44 billion, Occidental is a mini-major with exposure to the hot Permian Basin of Texas and New Mexico, international operations in Latin America and the Middle East, and valuable pipeline and chemical businesses.

“We like the long-term story at Occidental.” says John Linehan, manager of the T. Rowe Price Equity Income fund, pointing to the company’s “best-in-class Permian position” and strong balance sheet. “We struggle to understand the deal rationale.”

Occidental management remains keen on winning Anadarko. “We have long believed that Occidental is uniquely positioned to generate compelling value from Anadarko’s highly complementary asset portfolio,” Vicki Hollub, Occidental’s president and CEO, said last week.

Hollub may be a determined general, but Occidental investors should hope that she is forced to retreat.

Tesla’s decision to offer stock and convertible debt to bolster the company’s financial position has boosted the company’s shares. It also offers a fresh opportunity to look at how much is at stake for CEO Elon Musk.

If things go the way Musk hopes, he could become one of the richest people in the world—and, possibly, the richest.

Shares of Tesla (ticker: TSLA), up 3.7% Friday afternoon to $253, are up 8% this week, after the electric auto maker said it planned to raise about $2 billion. On Thursday, according to news accounts and Barron’s sources, Musk pitched those offerings to institutional investors.

Tesla and the lead underwriters declined to detail that presentation to Barron’s, though it was reported that Musk said the company’s autonomous driving technology—which Musk says can power a vastly profitable robotaxi network—was crucial to pushing the company’s eventual market capitalization toward $500 billion.

That number made us think back to the terms of Musk’s 2018 compensation agreement with Tesla, which links his compensation to a series of ambitious operational and market-cap milestones.

Here’s a link to the SEC filing detailing the plan, and here’s a summary of how it works:

Every time the company passes one market capitalization milestone—the first is $100 billion, more than twice what the company commands today—and one operational milestone (they track revenue and adjusted Ebitda), Musk becomes eligible to buy 1.69 million shares of Tesla stock at about $350 apiece.

A market capitalization of $500 billion represents the ninth of 12 possible milestones for Musk. To get the maximum benefit, he’d need to hit nine operational milestones, too. That would entitle him to about 15.2 million shares, costing him $5.32 billion.

But if the company is worth $500 billion, then it’s about 11 times as valuable as it is today—meaning a share price of roughly $2,600, after accounting for the dilution caused by Musk’s options.

Multiply that by 15.2 million, subtract the cost to Musk, and he’s left with more than $34 billion in new wealth. Add Musk’s current stake in Tesla, around 34 million shares, and you’ve got another $88 billion.

That gets us to about $123 billion with rounding—which is, according to Bloomberg, more than Amazon.com ’s (AMZN) Jeff Bezos is worth today. (This doesn’t account for the value of Musk’s other business interests, including SpaceX.)

These are back-of-the-envelope calculations, and they ignore things like taxes and ongoing dilution from Tesla capital raises. Meanwhile, the contract’s operating targets require substantial revenue and adjusted Ebitda growth that also are not assured.

The big picture, though, is clear: These are huge numbers—and Musk faces big obstacles to meet them—but the payoff is massive if he does.

“The store is just sick.”

Oscar Quinones, 28, was in Nike ’s flagship store on Fifth Avenue in Manhattan, and he was speaking out of reverence, not disgust. The store has a design studio on the top floor where experts dole out advice on fit and fabrics and how to use Nike gear.

“I walk in and see all the parts of the shoes, how they’re made, and how Nike comes up with their designs,” Quinones, a nursing student from the Bronx, told Barron’s. He was there to pick up his 17th pair of Nikes, the first ones he had designed and customized online: a glow-in-the-dark Kobe A.D. sneaker with the initials OQ stitched on the heels.

Millennials like Quinones are being aggressively wooed by Nike (ticker: NKE) and other marketers, and for good reason. The millennial generation, consumers in their mid-20s and 30s, is overtaking the baby boomers as the largest generation of shoppers in history. By 2020, millennial spending will account for $1.4 trillion in U.S. retail sales, according to the consulting firm Accenture . That will be a quarter of the estimated $5.7 trillion total, according to eMarketer

This year, the oldest millennials are turning 38—a prime age for young families and household formation. Spending tends to rise with income as consumers reach their late 30s and 40s, and then tapers off in their 50s, according to Census Bureau data. The youngest millennials, in their early 20s, are finishing up college and graduate school and are entering the workforce at a time when jobs are plentiful and demand for young workers is the strongest in years.

The maturing of the millennials will lift spending for all sorts of industries and companies—a powerful demographic tide that should continue rising as the population grows and workers enter their prime earning years.

“Clearly, one would expect millennial spending to increase healthily over the next decade or so,” says Richard Fry, a senior researcher with the Pew Research Center.

The demographic changes aren’t all positive. Baby boomers are spending less as they age into retirement and live off their savings, and Gen X consumers in their 40s and 50s aren’t as large of a generation, creating a consumption gap.

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Beware of the Misconceptions About Millennials

Millennials will eventually pick up the slack as their incomes rise, but it won’t happen overnight. In the meantime, investors should seek the industries and companies with “niche demographic tailwinds,” says Pat Tschosik, an analyst who studies demographic trends with investment-research firm Ned Davis Research. Companies that can benefit from millennial demand—that isn’t offset by declines from the boomers or Gen Xers—are in the demographic sweet spot.

How do investors take advantage of these shifts?

One could invest in companies whose growth is being fueled by millennial spending, but that is a scattershot approach to what is a vast universe. Companies as different as Amazon.com (AMZN) and General Motors (GM) get pitched as investments because of “secular” demand by millennials.

Some exchange-traded funds bundle it all together. The Global X Millennials Thematic ETF (MILN) holds about 80 stocks that have a “high likelihood of benefiting from the rising spending power and unique preferences” of millennials. It consists of companies like Alphabet (GOOGL), Costco Wholesale (COST), Facebook (FB), Starbucks (SBUX), and Walt Disney (DIS). Another ETF, Principal Millennials Index (GENY), holds a basket of global growth companies, including an Australian education business, Navitas (NVT.Australia), the Japanese retail giant Fast Retailing (9983.Japan), and Chinese internet stocks Alibaba Group Holding (BABA) and Tencent Holdings (TCEHY).

While millennials certainly matter to these companies, they are hardly the only drivers of the stocks. Valuations, competitive pressures, and earnings are likely to be as influential as a generational shift in spending.

Barron’s has identified five stocks that should benefit from millennial spending and are attractive for other reasons, as well. Here are our millennial plays, two well-known big names and three smaller, more speculative picks:

Subscription services, as Barron’s highlighted in a December cover story, are thriving. Millennials aren’t the only ones behind the trend. But plenty of research indicates that young people prefer to rent products and services more than older generations. According to Accenture, 77% of both the millennial and Gen Z generations say they are interested in curated subscriptions to products or services. Legions of companies are now adopting subscription-revenue models for products as varied as furniture (IKEA) and electric-toothbrush heads (Philips).

That’s the opportunity for Zuora (ZUO), a small but fast-growing software company. Zuora sells a cloud-based platform to handle back-office functions for subscriptions, such as billing, revenue recognition, and analytics.

Its customers include auto makers GM, Ford Motor (F), Kia Motors (000270.South Korea), and Toyota Motor (TM); HBO Go (the direct-to-consumer service); office-productivity company Box (BOX); and Caterpillar (CAT).

Caterpillar’s mining earth movers, for instance, are operated remotely with GPS and robotics. Companies pay subscription-based fees for maintenance and upgrades of the equipment, and the company uses Zuora to handle its subscription revenue. Trucking companies are also using subscription software to keep track of hours and miles driven, with Zuora as the go-between.

The idea is to “sign up new customers, increase spending per customer, benefit from increased customer usage, and retain as many of those customers as possible,” says David Meier, a portfolio manager with Motley Fool Asset Management, which owns Zuora in the MFAM Small-Cap Growth ETF (MFMS).

Zuora’s sales are expected to reach $292 million in its fiscal year ending in January 2020 from $235 million in fiscal 2019. Analysts expect the company to lose 43 cents a share this fiscal year. Yet the losses are narrowing as revenue increases and cash flows cover more of its operating expenses. The company has more than enough cash on its balance sheet, at about $180 million, to sustain the business for several years without another equity issuance.

“This is a growth story,” says Scott Berg, an analyst with Needham who has a Strong Buy rating on the stock with a $30 price target from a recent $21.50. “They’re targeting investment over profitability near term.”

Zuora’s end market will be one of the fastest-growing in enterprise software over the next five years, he says, expanding at a 25% annualized rate. Its revenue should grow at roughly that rate, Berg estimates. The valuation looks reasonable, with the stock trading at 5.8 times enterprise value to sales, slightly below the median for software-as-a-service companies.

Zuora CEO Tien Tzuo tells Barron’s that profitability isn’t the company’s near-term priority. “We see this is a long-term game,” he says. In the auto industry, he says, subscription models and car-sharing will be far more prevalent a decade from now, requiring subscription software to handle the billing and other tasks. He also sees growth for subscription software with the rise of connected devices like internet-enabled thermostats and the broader Internet of Things.

Subscription-based revenue models are growing at five times the pace of the average S&P 500 index company, he says. If he is proved right, Zuora’s stock could double over the next five years.

Whether or not luxury department stores survive, millennials are likely to buy more luxury goods online. By 2025, 25% of luxury items will be bought online, up from 10% in 2018, says the consulting firm Bain & Co. Much of that growth will be driven by millennials and Gen Z, who will account for 45% of total luxury sales, up from 32% in 2017.

Farfetch (FTCH) aims to profit from the spending wave. An online platform for luxury brands, the site is a mash-up of fashion magazine and high-end boutique. Shoppers can browse hundreds of brands or buy the style “edit” of celebrities like Chloë Sevigny, who recently showcased a Gucci tweed coat ($4,980) and Miu Miu leopard-print trench coat ($3,650).

Fashion is a globally inefficient industry: Small boutiques and brands in Europe, Japan, and other regions handle cross-border sales, shipping, and inventory management in small batches. Farfetch provides all of that on a global scale, including same-day delivery in 18 global cities. Luxury brands work with Farfetch because it gives them control of listings, allowing them to maintain pricing and “consumer perception,” Oppenheimer analyst Jason Helfstein wrote in a recent report.

Farfetch is gaining traction. The total value of merchandise on the site reached $1.4 billion in 2018, up from $910 million in 2017. Active users climbed to 1.35 million from 936,000. Farfetch has also been acquisitive, buying a Chinese luxury platform from JD.com (JD) and a premium sneaker and streetwear marketplace, Stadium Goods.

Farfetch went public in September at an initial price of $20 and trades around $25. Company insiders own more than a third of the shares, and the stock could face selling pressure after the lockup period, which expired on March 21. Other risks include a slowdown in sales in the Middle East and Asia-Pacific, fast-growing regions for the company. Analysts expect the company to lose 61 cents a share in 2019 and 45 cents per share in 2020. The shares trade at about 11 times sales, a 50% premium to the industry, according to FactSet.

But Farfetch has no debt on its balance sheet, $850 million in cash on hand, and minimal inventory. Sales are expected to increase 30%, to $1.1 billion in 2020 from $822 million this year. Helfstein estimates that Farfetch will turn a modest profit of $20 million in 2022, based on adjusted earnings before interest, taxes, depreciation, and amortization.

The business looks defensible against Amazon.com, says T. Rowe Price fund manager Jay Nogueira. “The high-end brands don’t want to be on Amazon,” he says. “The addressable market for Farfetch is massive, and platform companies like this will be winners.”

Housing should get a boost as millennials form households and have children.

Millenials have moved out of their parents’ homes (with 85% no longer living at home). And they appear to be buying after years of renting; owner-occupied households increased to 64.8% in late 2018 from 62.9% in early 2016, while renter-occupied households dipped by 1.9 percentage points, according to the Census Bureau. Tschosik estimates that there is pent-up demand of at least two million housing units by millennials who had delayed buying because of the recession and weak job market.

Home builders targeting first-time buyers, such as KB Home (KBH), should see some benefits from this wave. But first-time buyers are more likely to purchase older homes; new construction tends to be more expensive, and the average age of a new-home buyer is 47, making a new house more of a trade-up.

That should benefit Home Depot (HD), as millennials buy older homes and fix them up. Household spending on home improvement tends to be highest in the first couple of years of ownership. And in a strong economy, with wages and home prices on the rise, discretionary budgets should be healthy enough to support spending on remodeling.

Home Depot’s stock has lagged behind the broader market over the past year, gaining about 8%. Wall Street’s sentiment on the stock has soured a bit as the housing market weakened and the company missed estimates for same-store growth in its last quarter. The stock trades at its average valuation over the past five years, about 20 times forward 12 months’ earnings.

Yet the retailer’s core sales trends still look healthy. The company expects same-store sales to increase 5% in 2019, similar to its growth rate in 2018. Spending on home improvement should continue to rise, especially if interest rates come down another notch.

Home Depot also has better locations than its chief rival Lowe’s (LOW), RBC analyst Scot Ciccarelli says. More of HD’s stores are located in dense urban areas, supporting higher foot traffic per store and stronger sales to professional contractors, one of HD’s faster-growing and higher-margin businesses.

Home Depot’s stores are also concentrated in areas with higher household incomes, all of which may give it a structural advantage over Lowe’s, Ciccarelli says. And Home Depot is investing heavily in e-commerce to fend off Amazon; the company is spending $1.2 billion over the next few years to expand distribution of big or bulky goods with same- or next-day delivery.

The stock isn’t likely to outperform if the macro climate for housing deteriorates. But the demographic elements look favorable, and there should still be upside in the stock if the company can execute on plans to improve same-store sales and margins. The stock yields 2.7% and the company recently authorized a $15 billion share-repurchase plan, equal to about 7% of its market value. Ciccarelli sees the stock reaching $223 over the next year, up from recent prices around $200, based on a multiple of 22 times estimated 2019 profits.

Families moving from apartments to houses tend to ramp up spending on home furnishings. That’s advantageous for Lovesac (LOVE), a small company that makes modular couches called “sactionals.”

Lovesac’s couches and other furniture can be reconfigured, accessorized, and customized into thousands of arrangements like interlocking Lego pieces. The cushions are made of recycled bottles—appealing to millennials who want sustainable products—and the furniture doesn’t have to be tossed in the landfill or sold on Craigslist as people move from apartments to larger living spaces.

“They’re a disruptive name in the furniture space,” says Brian Bythrow, portfolio manager of the Wasatch Micro-Cap Value fund (WAMVX), which owns the stock. Lovesac derives most of its sales from showrooms, online, and shops-in-shops within Costco. It has gross margins of 55%, well above rivals like RH (RH) at 40%.

Lovesac went public in June 2018 at $16 and now trades at $42. Analysts expect the company to lose 22 cents a share in the current fiscal year, which ends in January 2020 and earn seven cents a share in the next fiscal year. The stock trades at three times enterprise value to sales, well above average for furniture retailers.

Lovesac, however, is expanding rapidly. It is expected to report $239 million in fiscal-2020 sales, up 44% from fiscal 2019. The company is running at close to break-even because it is plowing revenue into expanding the business, Bythrow says. “We’re in a period where investors are rewarding companies that reinvest for growth,” he says. “That might change. But you can get by with that today.”

Nike’s appeal rests on spending assumptions by millennials, along with moves the company is making to refresh its product lineup and retail shopping experience. The company is deploying its vast financial resources to blend digital shopping with in-store experiences, says Jill Standish, head of retail for Accenture. “The Nike store experience is very Instagrammable,” she says.

The ability of consumers to design their own sneakers at kiosks at flagship stores is helping Nike fend off Amazon and other pure online retailers. Nike’s SNKRS app is also resonating with young shoppers, says Camilo Lyon, an analyst with Canaccord Genuity, and the company is doing a good job of driving sales through a combination of digital and in-store experiences.

“Nike is focused on driving the consumer experience across all components of their business,” he says.

Lyon points out that Nike’s innovation machine is cranking up; it includes the launch of a new cushioning platform in running shoes and a renewed focus on women’s apparel and footwear (such as its Air Max Dia shoe).

Nike also plans to drive innovation down from its upscale footwear to “core” sneakers priced below $100, an initiative that could take share from Under Armour (UA) and Skechers USA (SKX).

“Among the publicly traded companies, Nike has made the sharpest turn in strategy to address the millennial demographic and the changing landscape of shopping behavior,” Lyon says.

The company’s latest quarterly results portray broad-based strength with sales up 11% (in unadjusted currency terms) over the prior year. The company is exhibiting price resiliency with gross margins up 1.3 percentage points, to 45.1%, driven by higher average selling prices and growth in direct-to-consumer sales.

Moreover, Nike is strong enough financially that it can afford to buy back a large amount of its stock. It just embarked on a four-year plan to repurchase $15 billion worth of shares, about 11% of its $134 billion market value. The stock has advanced 15% this year to $85.50, but Lyon sees further upside to $96 over the next 12 months.

That path will be made possible by customers like Quinones, who was picking up his sneakers at the Nike store in New York. He played around with the hundreds of color, material, and embroidery options in the Nike app before heading to the store to get his unique pair.

Visiting the store and seeing everything in action keeps him coming back. “It definitely makes me spend more money at Nike,” he says.