Nike, Inc. (NKE) Earnings: An Early Look

But Nike has had to react to competition. Under Armour Inc (NYSE:UA) has made a big move into the athletic shoe business, and given its past success in building a niche in the athletic apparel segment, Under Armour will pose a credible threat to Nike. A lawsuit that Under Armour recently filed against Nike for trademark infringement indicates just how much is at stake for both parties.

One area where Nike stands to gain is in technology. Its FuelBand monitoring device has the potential to become an entry point that could inspire future products from a partnership with Apple Inc. (NASDAQ:AAPL), which could eventually lead to a “smart-shoe” system or an iWatch, especially since Tim Cook serves on the Nike board.

Just last month, Nike completed the sale of its Cole Haan shoe brand to a private equity firm for $570 million. The sale emphasizes Nike’s renewed focus on its core athletic business, and the cash should give it flexibility to take other steps to increase profitability.

In Nike’s quarterly report, look for signs that point to which strategic direction the company is planning to go. With so many irons in the fire, the danger is in trying to do too much, but Nike’s new focus should serve it well even as competition heats up.

The article Nike Earnings: An Early Look originally appeared on Fool.com.

Fool contributor Dan Caplinger owns shares of Apple. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends and owns shares of Apple, Nike, and Under Armour.

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