It's been a tough year for the U.S. retail sector , and the athletic apparel business is no exception. According to Bernstein analyst Jamie Merriman, patient Nike Inc (NYSE: NKE ) investors will eventually be rewarded for weathering the storm. Under Armour ( UA , UAA ) investors, on the other hand, may have even more pain ahead.

In a new research note, Merriman says the athletic apparel boom is not over just yet, and the athletic apparel and footwear group will continue to outpace growth in the rest of the retail sector.

Since 2009, the U.S. athletic apparel and footwear market has expanded at a compound annual growth rate of 6.5 percent, more than double the overall 3.1 percent growth rate of the retail sector as whole.

[See: 8 Sports Companies to Game the Stock Market .]

While the industry is still performing well, rising competition and huge run-ups in share prices suggest the easy money has already been made in the space. In the past 12 months, Nike stock is down 3.4 percent, Lululemon Athletica ( LULU ) stock is down 4.6 percent and Under Armour stock is down a staggering 54.3 percent.

Despite the sell-off, Merriman says investors still need to be cautious about rushing in to buy the dip.

Nike's recent struggles may have more to do with the stores selling its products than the products themselves.

"Constant currency growth has slowed recently, driven by wholesale destocking in North America as Nike shifts to a strategy emphasizing [direct-to-consumer sales], but we do not believe there is a fundamental problem with the brand traction or category," Merriman says.

Bernstein projects Nike will bounce back and top consensus earnings estimates by 3.4 percent in 2018 and 5.6 percent in 2019.

On the other hand, she says Under Armour will likely remain in "growth purgatory" and will be unable to return to the 20 percent revenue growth it was consistently delivering as recently as last year.

[Read: Which Stock Is Better: Nike or Under Armour? ]

"Our [EPS] estimates are below consensus and we believe multiples will grind lower as growth remains below the 20 percent level," Merriman said of Under Armour.

He also said Lululemon stock appears fairly valued based on its moderate growth potential in an increasingly competitive market.

Bernstein has an "outperform" rating and $69 price target for Nike stock, a "market perform" rating and $66 price target for Lululemon stock and an "underperform" rating and $14 price target for Under Armour stock.

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