Under Armour Inc

Under Armour (UA) anticipates higher inventory growth over the next few quarters. It has made a number of changes on the inventory and supply chain side.

Under Armour is scheduled to declare its earnings for 4Q15 and full-year 2015 on January 28, 2016. It has projected revenue of $3.9 billion for 2015.

NIKE is working to improve its profitability, as its margins trail industry peers such as Lululemon Athletica (LULU) and VF Corporation (VFC).

This was a record quarter for Under Armour, with sales breaching the $1 billion mark for the first time.

Nike’s rival Adidas (ADDYY) is targeting over 2 billion euros from web sales by 2020, as detailed in its latest five-year plan unveiled in March 2015.

Nike expects to grow its Free Cash Flow, or FCF, at a faster pace compared to net income over the next five years through fiscal 2020. In fiscal 2015, FCF grew by ~74%.

Performance for Nike and peers has been strong in North America over the past few years. The sports gear category has benefited from the improving US economy.

Under Armour’s (UA) international operations are among its fastest-growing businesses.

Under Armour is a growth company. In this series, we’ll discuss how the company plans to double its business in the next four years.

Lululemon Athletica (LULU) reported revenue of $423.5 million in 1Q16, up 10% year-over-year.

Nike sales growth was fueled by new store openings, higher store comps, and growth in the e-commerce channel.

Nike (NKE) has a number of stores-within-stores, or exclusive standalone stores, partnering with retailers.

The company’s three major brands—The North Face, Vans, and Timberland—all reported double-digit growth rates in the quarter.

VFC’s total annualized returns to shareholders appear among the most consistent within its peer group for one-year, three-year, and five-year time periods.

The North Face became VFC’s first brand to achieve $2 billion in sales in 2013. Timberland revenues are expected to come in at ~$1.7 billion in 2014.

NIKE plans to grow DTC revenues to $8 billion by fiscal 2017, including e-commerce revenues of $2 billion. E-commerce grew 65% in 2Q15 to ~$205 million.

How strong is Under Armour’s business model? In the next parts of this series, you’ll read a SWOT analysis—looking at strengths, weaknesses, opportunities, and threats—of Under Armour, Inc. (UA). We’ll also compare the company to rival firms, the overall market, and the consumer discretionary (XLY) sector. In this part, we’ll cover the firm’s key strengths and weaknesses. […]

LULU’s global store count was estimated at 289 at the end of 3Q15. Stores are company-owned, with most located in the US (201) and Canada (57).

LULU’s sale through wholesale channels is much lower than its competitors VF Corporation, NIKE, and Under Armour. This is why LULU’s margins are higher.

Under Armour, Inc.’s cost of goods sold margins have been fairly steady over the years. SG&A costs are likely to trend higher in the near to medium term.

For relatively new companies competing in an industry with many players, building a well-recognized and reputed brand is essential.

Major product lines include fitness pants, shorts, tops and jackets. It also has a range of fitness-related accessories like bags, socks, and yoga mats.

Wholesales represented 68% of Under Armour revenues in 2013. As a category, however, DTC sales have increased steadily over the years.

Porter’s 5 Forces, developed by Harvard Business professor M. Porter, is a model of analysis used to gauge the level of competition within an industry.

Under Armour: Sourcing, manufacturing, and distribution decisions Under Armour, Inc. (UA) manufactures virtually nothing in-house. Production is outsourced to third-party manufacturers overseas. This is common practice in the apparel industry among companies including the The Gap, Inc. (GPS) and Fossil, Inc. (FOSL). These companies are held by the Consumer Discretionary Select Sector SPDR ETF (XLY), as are United Armour, or […]

Under Armour’s stock price growth has been phenomenal—up by over 10x in the last five years. This dwarfs the ~200% increase seen by market leader NIKE.