Under Armour discusses growing its sporting categories at its 2015 Investor Day
At its 2015 Investor Day, Under Armour’s (UA) management discussed the key sporting categories the company will focus on through 2018 to achieve its stated target of $7.5 billion in annual revenue by 2018. These include Men’s Training, Women’s Training and Studio, Basketball, Team Sports, Running, Global Football, Golf, and Outdoor. The company plans to grow the market and product category sales through the introduction of new and innovative products. UA’s also looking at judicious investments in both teams and athletes in order to grow market share in targeted categories.
Of the $7.5 billion in annual sales projected in 2018, about two-thirds or $5 billion would come from apparel, the company’s traditional stronghold, while footwear sales are projected at $1.7 billion. While apparel sales would more than double over four years, footwear revenues would quadruple. The next article in this series discusses footwear sales drivers in more detail.
According to Henry Stafford, chief merchandising officer at UA, the company has a double-digit share of the market in only one of its eight categories: men’s training. So the opportunity to innovate and grow is immense.
The company sees a $2 billion opportunity in training and $1 billion in basketball.[2. According to comments by Kevin Plank, CEO of UA, and Adrienne Lofton SVP, Global Brand Marketing]
Under Armour is also launching a new category, sportswear, in mid-2016. UA’s two biggest rivals derived ~$12.5 billion in sales from the $50 billion global sportswear industry, or 25% of the total.
Nike (NKE) derived ~25% of its sales from sportswear over the past three years. In fiscal 2015, the category clocked sales of $6.6 billion. Adidas (ADDYY) has several sportswear lines, including Adidas Originals and Neo, which includes a collection by Selena Gomez. Sales for Adidas Originals and Neo rose 37% and 43%, respectively, year-over-year in 2Q15.[3. On a currency-neutral basis]