During earnings week multiple sites have jumped on the Under Armour bandwagon after their great quarter. UA is being touted as the next Nike; however, I'm not ready to jump in (especially with the stock being well above all moving averages).
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| Source: Under Armour 2012 Annual Report |
Under Armour is a sports apparel company that focused on football and grew into baseball, golf, and other footwear. Most of their business is in the US but they are expanding internationally starting with China, Latin America (because of the World Cup and Olympics), and Europe. Two things concern me about their growth strategy. Right now most of their sales is through wholesale distributors but for the international expansion they are going with company branded stores. Since they don't have a presence in these foreign countries they are going after sponsoring local athletes\teams and creating "experience" stores. This would be expensive and a departure from their working business strategy of wholesale distribution so really it's a gamble that they gain a foothold with foreigners. In addition, the UA brand is more associated with football (which is a US majority sport) so I'd be interested to see how their smaller lines like soccer catch on.
Depending on how their World Cup presence goes I'll take another look at UA. So far everthing they've done has been successful and I do like that the founder is still running the company so he's got motivation to expand.
