Under Armour’s footwear business
Under Armour’s (UA) footwear business registered an impressive 64.2% growth (VUG) rate in 1Q16 versus 1Q15. Footwear sales came in at $264 million in the quarter, representing 25.2% of the company’s total revenue. In comparison, footwear rival Skechers (SKX), which also released first quarter results on April 21, posted record quarterly sales of almost $979 million, up 27.4% year-over-year.
New product launches
Under Armour recently launched new iterations of its popular SpeedForm Gemini running shoe, including the record-equipped smart shoe made available for sale in late February. The company also launched the UA Architect, the company’s first shoe manufactured using 3D printing technology. According to Plank, “The shoe sold out in 19 minutes on our e-commerce site at a suggested retail of $300.” UA plans more launches in the future using variants of this technology.
In April, UA launched a new line of golf footwear. Three models were launched: the Tempo Tour retailing at $220, the Drive One retailing at $200, and the Tempo Tour Hybrid retailing at $160[1. Based on comments by Kevin Plank, CEO of Under Armour].
While competitors Nike (NKE) and Adidas (ADDYY) have faced challenges in the golf category due to pressure faced by the sport, sales of golf apparel have blossomed at Under Armour, spurred by the success of Jordan Spieth, a valuable member of Under Armour’s athlete roster. Thus, UA’s golf footwear could outperform industry growth rates.
Under Armour is targeting $1.7 billion in annual footwear sales by 2018. According to the company, “premiumizing” footwear offerings has led to sales growth. We’ll discuss this more in the next article in this series.