For decades, Nike (NYSE:NKE) has been at the pinnacle of an industry it helped to pioneer. The maker of athletic footwear and apparel has revolutionized the business, with its strategy of enlisting the support of the most popular athletes across the globe to promote its products paying off despite the big price tags of key endorsement deals.

Yet that dominance started to give way in 2016 and 2017, with margin pressure and rising competition from companies like Under Armour (NYSE:UA) (NYSE:UAA) and Adidas (NASDAQOTH:ADDYY) weighing on Nike's growth. Although Nike stock didn't suffer huge declines, it failed to play the leadership role it had earlier in the bull market. That made 2018 a key year for Nike, and so far, the athletic footwear king has done well for itself.

NKE Chart

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Nike bulks up for 2018

Nike came into 2018 needing to reassert its competitive spirit in the face of increasingly aggressive rivals. Adidas in particular had not only captured some market share internationally but had also successfully invaded Nike's home turf in North America, with the popularity of some vintage designs presenting a challenge to vital product lines like Air Jordan.

It didn't take long for Nike to fight back. In its fiscal third-quarter report in March, Nike announced huge gains in international sales, including 24% growth in the greater China region and 19% in Europe, the Middle East, and Africa. North American revenue fell, but Nike's huge investment in building out its direct-to-consumer channel achieved success and showed a pathway toward higher profitability without relying on outside third-party retailers. Particularly encouraging was Nike's assurance that the near-term future would remain strong.

A strong finish to the fiscal year added momentum to Nike's turnaround. The company finally managed to post year-over-year revenue growth in North America for the Nike brand, and international growth accelerated further. Rising projections for the new fiscal year gave investors the confidence they wanted, and Nike also said that it would authorize spending up to $15 billion over the next four years toward stock repurchases.

Stats on Nike

Revenue, Past 12 Months

$37.28 billion

1-Year Revenue Growth

8.5%

Net Income, Past 12 Months

$2.08 billion

1-Year Net Income Growth

(47%)

Source: Nike.

The biggest sign of success came from new product launches. Advanced running platforms gave customers incentives to upgrade their gear, and Nike said that 80% of its sales growth came from the most recent lineup of shoes and apparel products it had released.

Finishing strong

Nike's most recent results continued the strong momentum it had built up earlier in the year. Despite some challenges from the strong U.S. dollar, the athletic giant still managed to post a nearly 10% rise in revenue, with earnings picking up 15% from year-earlier levels. Margin expansion and global growth remained firmly in place, and Nike said that it fully expects to sustain its fundamental business performance throughout the 2019 fiscal year.

Storefront with Nike Women branding and swoosh on side of building.

Image source: Nike.

In that light, October's drop for Nike might seem out of place. But in the context of an overall stock market decline, the fact that a high-flying stock like Nike fell more than broader market benchmarks shouldn't come as any sort of warning sign for the company in particular.

What's next for Nike?

Nike's solid gains so far in 2018 don't mean that the company can declare victory in the space. Even though it has effectively fought back against its main competitors, Nike has to keep up the pressure and avoid the complacency that arguably led it to its recent troubles in the first place. As in any athletic contest, Nike and its peers can expect good and bad periods, and how Nike responds to challenges will remain at least as important as how it takes advantage of opportunities.

Overall, Nike has done a good job in 2018 of reminding investors how it became the behemoth in the athletic footwear and apparel business. If it can stay on track with its current strategic initiatives, then Nike should be in good position to finish the year on track and set the stage for a solid performance in 2019 as well.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool recommends Nike. The Motley Fool has a disclosure policy.