The battle between two industry rivals is heating up. One company is mature, managed by a team of seasoned executives and has a pile of cash. The other company has a powerful brand, but little else.

Shares of Nike (NYSE:NKE) and Under Armour (NYSE:UA) are in the red today as the Street digests the latest earnings figures from the industry’s top dog.

Nike revealed its net income dropped to $341.4 million over the past three months, down from last year’s figure of $490.5 million.

Considering the drop was due to a $200 million re-structuring charge as Nike shed 1,750 workers, the quarter was not too bad. Without the charge, the sportswear maker beat most analyst estimates.

But, of course, the market looks forward, not backwards. That means investors are acting on the company’s outlook released last night, which gives little reason to bid up share price today.

With revenue dropping by 7% last quarter and orders through the next “several” months down by 12% from last year’s figures, the future is not nearly as bright as most had hoped.

In fact, the company’s CEO expects the recovery to mimic the company’s trademark “swoosh” logo, a long, gradual climb.

If that is the case, investors are better off taking their money elsewhere. Anywhere but Under Armour, that is.

All about cash

If the Baltimore-based company’s upcoming revenues and outlook mirror Nike’s figures, Under Armour investors will be downright depressed.

With just $65 million in cash, versus Nike’s whopping position of close to $2 billion, Under Armour had better be prepared to protect the ground it recently stole from its chief competitor.

As the economic malaise continues, Under Armour will be forced to curtail its growth, giving a much more liquid Nike more than enough ammunition to start grabbing market share.

Under Armour has the brand power and the momentum of several years of phenomenal growth on its side, but now that the industry is getting downright tough, only the strong will survive.

With its skin-tight product line, Under Armour may look tough. But we all know the guys with the piles of cash almost always win.

Source: Nike Gets Ready for Competition