Under Armour’s phenomenal growth since 2006
Founded in 1996, Under Armour (UAA) sells athletic apparel, footwear, and accessories. The company has one of the best growth stories in the sportswear space. Its revenue has risen at a CAGR (compound annual growth rate) of 25.0% in the past ten years, dwarfing Nike (NKE), the industry leader, which reported a 7.0% rise in that period.
UAA’s growth hasn’t fallen below 20.0% in the last 25 consecutive quarters. Strong leadership, smart marketing, a solid roster of celebrity athletes, and innovative fabrics and designs are some of the key drivers of this steady, explosive growth.
Evaluating fiscal 2016 YTD performance
Under Armour had another strong year in 2016. Its top line rose 26.0% in the first nine months compared to the same period in 2015. Robust growth in the footwear segment, increasing visibility and brand recognition in international markets, and steadily increasing DTC (direct-to-consumer) sales drove the company’s top line.
The company came in ahead of consensus revenue estimates in two of the three reported quarters.
For fiscal 2016, UAA’s management is projecting a 26.0% YoY rise in its total sales to $4.9 billion. For 4Q16, Wall Street has predicted Under Armour’s top line to rise 20.0% YoY to $1.4 billion.
Management is positive about the company’s medium-term growth prospects. It’s looking for a compound annual growth rate of more than 20.0% in sales to $10.0 billion by 2020.
With the company’s high growth prospects, it’s part of ETFs that invest in companies with a growth slant. So the company is part of the iShares Morningstar Mid-Cap Growth (JKH), which invests 0.37% of its portfolio in UAA.
To know more about Under Armour’s business segments, move on to the next part of this series.