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Under Amour Stock : From Worst-Performing to Best-Performing

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Under Armour stock in 2017

Under Armour (UAA) was the worst-performing S&P 500 apparel stock in 2017. It plunged a massive 50% during the year. Some other apparel players had stellar performances that year. PVH (PVH), Gap (GPS), and Michael Kors (KORS) surged 52%, 52%, and 46%, respectively. Sportswear competitors Nike (NKE), Columbia Sportswear (COLM), and Lululemon Athletic (LULU) rose more than 20% that same year.

 

What was behind UAA’s fall?

Rising competition from Adidas (ADDYY) and Puma and resurgent sales from Nike hit Under Armour hard in fiscal 2017. Its sales growth slowed down to 3% from 27% average growth between fiscal 2012 and fiscal 2016. Sales in North America, the company’s largest market, fell 5% last year.

Its margins were also significantly lower than its peers in 2017, with an operating margin of 0.5%. Columbia Sportswear, Nike, and Lululemon had operating margins of 10.6%, 13.8%, and 17.2%, respectively, that year.

Under Armour stock is hot in 2018

The tables turned, however, in 2018, and Under Armour overtook all its competitors. As we reach the middle of the year, UAA stock has already soared 61% as of June 18, which is well ahead of the S&P 500 Index (SPY) at 3.8%.

UAA is definitely this year’s best-performing S&P 500 apparel stock. In comparison, PVH and Michael Kors have gained 18% and 7%, respectively, and Gap has fallen 7% year-to-date.

So what has changed for Under Armour? What’s giving the stock such a huge boost? Let’s see in the next two parts of this series.

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