Research archive for UA

Under Armour, the American sports & apparel company and a competitor to Nike and Adidas, reported its holiday earnings. They were underwhelming for Mr. Market, as the company battles ongoing competition in their athletic apparel and sneaker department. The big issue is that the company had to lower its guidance by $60 million, citing the Coronavirus as a potential threat.

On the first of August we had results from Under Armour which looked bad at first glance. Sales grew only 9% to $1.09bn while they made a $12m loss. We are used to solid double digit growth from these guys. It clearly pushed management into action who also announced a restructuring plan on the same day.

Under Armour, the sports apparel and shoes company reported results a number of weeks back. Kevin Plank, the CEO and founder is an interesting guy. He is not without his own set of controversy, making a German football team and Steph Curry (the almost legendary current basketball star) more than a little angry about his supportive Trump comments. At the end of the day, Plank is always going to make his fair share of omelettes (by scrambling the eggs, you know).

Under Armour released results two days back, pre-market. The market thought the results were absolutely awful, relative to their expectations, the stock was absolutely pounded. A drop of over one-fifth in a day means that the market was expecting a lot more than the company delivered. In part the lofty valuation has been as a result of the company having grown so quickly, so anything less than a meet would have been viewed negatively by the market. As a result of the company missing by a long way, relative to the lofty expectations, the result was a turndown of 25 percent plus for the voting shares (code UAA) and 23 percent (and a bit) for the non voting shares, (code UA).

We have been promising you some of the results that have been knocking around. There have been some stocks that we promise you a write up on. Under Armour has been one of those. Whilst the stock is not a mainstream holding, it is a company that we do own for enough clients to be more than an interesting side holding. It is true that you cannot own everything, best we all get used to that idea now. This company is in the space of where athleisure overlaps mainstream fashion, and a more health conscious world wakes up to the idea of looking after number 1. That number 1 of course is yourself, there is no plan b for your health.

Kevin Plank started Under Armour (UA) in 1996 in his grandma's basement with a goal to create workout and performance wear that's much better than cotton T-shirts. His first prototype was a sweat-wicking compression shirt. Today it has gone further than active wear with added products such as MapMyFitness & MyFitnessPal into their product portfolio.