Trefis: Collaborate on Forecasts
View | Modify | Create | Collaborate

Under Armour, Inc (UA)

New Scenario
Request Scenario
Sankey Grid
Subscribe to Updates
Select a component to explore
Top Drivers for Period
Key Drivers



  1. The Company Sees Heavy Growth In Emerging Asian Markets Especially In China

Like many of its competitors, Under Armour has set its sights on Asia as a massive top line booster. In FY 2018, the company managed to post a substantial 28.7% increase with strong balanced wholesale and direct to consumer growth, and continued strength in China, Korea, and Australia. In addition, revenue at EMEA was up 25% on a currency neutral basis with particular strength in the UK, Germany, and Spain. We expect international revenues to buoy the overall top line going forward.

  1. Direct To Consumer Channel Sees Heavy Growth

Further, after taking a massive hit on the wholesale front last year, Under Armour decided to up its investment in its direct to consumer channel. In 2018, direct to consumer revenue grew by about 4%. The financials were driven by continued strong results in its international and e-commerce businesses. Further, DTC represented nearly 35% of total global revenue. With continued efforts, we expect this figure to expand in the coming years.


Below are key drivers of Under Armour's value that present opportunities for upside or downside to the current Trefis price estimate:

  • Retail Apparel Revenues : Under Armour's Retail Apparel Revenues increased from $122 million in 2009 to around $1073 million in 2018. Under Armour's focus on innovation, as well as the addition of new specialty and factory stores, helped drive the sales. That said, the company has suffered heavily on a slowing apparel market. Going forward we expect the figure to increase at a lower-than-expected rate, crossing the $1.3 billion in the long run. If revenues decrease to $900 million due to a slower-than-expected apparel market growth in the U.S., it would imply nearly 10% downside to the Trefis estimate.

  • Apparel Gross Profit Margin: Under Armour's Apparel Gross Profit Margin has stayed in the region of 43%-48% historically, despite the downward pressure of increased competition, the negative impact of currency fluctuations, and increased air freight costs. The company has been able to consistently introduce new products and increase its average unit prices, which has helped sustain margins. However, last year, apparel revenues were hurt on the back of a slowing apparel market. In light of this, we expect this figure to be at 44% in the long run as the apparel market continues to weigh on margins. If margins increase to about 48%, there could be upside of about 10% to the Trefis price estimate.


Under Armour is a manufacturer and distributor of performance apparel, footwear, and accessories for men, women, and children. The company's products use moisture-wicking fabrics that are engineered in many designs and styles for wear in nearly every climate. The company sells its products worldwide, though a significant percent of sales coming from North America (about 72% in 2018). The company's distribution includes both wholesale and retail channels. Its products are worn by athletes at all levels, from youth to professional, on playing fields around the globe, as well as by consumers with active lifestyles.


The primary sources of Under Armour's value are its apparel and footwear businesses, and together they contribute around 77% of Under Armour's value, as per our estimate. Apparel is more valuable than Footwear and Accessories businesses for the following reasons:

Market leader in performance apparel market

Under Armour is the current market leader in the performance apparel market with over 70% market share. All three apparel gearlines of the company, i.e. HEATGEAR, COLDGEAR, and COLDBLACK, are extremely popular among professional athletes as well as consumers. However, in the footwear and accessories businesses, Under Armour faces tougher competition from established players such as Nike and Adidas.


Under Armour is expanding its own stores leading to higher overall gross margins due to a shift in sales mix

Gross margins in the direct-to-consumer channel are nearly 30% higher than in the wholesale channel.

Expanding its direct-to-consumer segment is a major focus for Under Armour. The company increased its factory store count in North America to 163 stores in 2018, and continues to focus on e-commerce sales. The retailer also increased the average square footage of its factory stores in 2018, including more product categories within its stores. As direct revenues contribute more to net sales, we expect gross margins to increase.

Focus on the international business

While international sales currently contribute only ~23% of Under Armour's net sales (as of December 31, 2018), the company plans to increase this figure further going forward.

The company plans to expand in the key markets of Asia (China, Korea, and Japan), Europe (U.K., France, and Germany), Australia, New Zealand and Latin America (Brazil, Mexico, Argentina, and Chile) to enhance its international business.

Under Armour’s management has always been upfront about its ambition to turn the brand from a purely American to a global one. That ambition received a significant boost late in 2013 with the opening of an Under Armour Experience store in Shanghai’s brand new mall, the Jing An Kerry Centre. This is a highly unusual venture with a unique retail concept: The Experience store features an immersive wrap-around video experience that tells Under Armour’s story. Another store, carrying a collection of Under Armour product, is connected.

Focus on the womens business

Being previously popular for its men's products, Under Armour is now focusing on women's products to enhance its revenues. It is making efforts to elevate its brand image among women customers by altering the retail experience at its stores to suit them.

The company is taking several measures to accomplish this goal. It has expanded its creative talent within the women’s business and altered its product portfolio and retail presentation to suit the tastes of female customers. Additionally, the retailer has also signed endorsement deals with female athletic and fitness icons such as Misty Copeland, Gisele Bundchen, and Lindsey Vonn.

Recent Trefis Articles

What Drove Under Armour To Beat Consensus In Q1 2019?

Under Armour (NYSE: UA) released its Q1 2019 financial results on May 02, 2019, followed by a conference call with analysts. The company reported revenue of $1.20 billion in Q1 2019, marking a y-o-y growth of 1.6% over $1.19 billion in Q1 2018. ...More

What Could Be The Primary Factors To Drive Under Armour’s Revenue And Profitability In Q1 2019?

Under Armour (NYSE: UA) is set to release its Q1 2019 results on May 02, 2019, followed by a conference call with analysts. After being relatively flat in the first two quarters of 2018, total revenue of the company increased sharply in Q3 and remained high in Q4. ...More

What Will We Need To See For Under Armour To Beat Its 5-Year Plan?

With Under Armour (NYSE:UA) facing competitive issues in the past 3-4 years, the company revealed its 2023-five year plan. As it stands, the plan has failed to impress investors, as the strategy, and expectations, as laid out by management, left a lot to be desired. ...More

Will Under Armour’s Gambit To Revive Its Brand Work?

Under Armour (NYSE:UA) has spent most of 2018 trying to recover from the debacle it faced 2017, which was a result of slowing sales, rising inventories, eventually leading to the company being forced to sell products at a discount. This meant Under Armour found its margins shrinking, and left its stock trailing. ...More

Profits Soar For Under Armour in 3Q

Under Armour (NYSE:UA) saw an earnings beat as net income jumped over 40%, with revenue coming in 2% higher. Led by international sales, Under Armour was able to post a revenue and earnings beat for the quarter, despite U.S sales stagnating. ...More

What Is Under Armour Doing To Turn Its Business Around?

In the previous article, we began our discussion on Under Armour's (NYSE:UA) "pivot" strategy, and explained in detail, the company's push into international markets. ...More

How Will Under Armour’s Revenues Grow In The Next 2 Years?

After posting consistent gains for over a decade, Under Armour (NYSE:UA) hit an all-time low early last year. With a slowing North American apparel market and lack of a strong international presence, the company reeled under the pressure of a building inventory, causing it to see some of its lowest revenue figures in years. However, those days seem to be behind the company now. ...More

What Is Under Armour Doing To Turn Its Business Around? (Part 1)

Under Armour (NYSE:UA) has seen its revenues decline at a modest pace since the end of 2016. Troubles began when the North American apparel market began its slump. Since around 80% of the revenues at the company come from the region, this slump took a heavy toll on sales and profitability. ...More

Part 1: Should Under Armour Consider Selling Its Business?

After recording over a decade of consistent growth, in recent times, Under Armour (NYSE:UA) has seen its revenues fall on a dismal North American apparel market. To counter this, last year CEO Kevin Plank, introduced a "pivot" strategy that was aimed to turn things around at the company. So far, this strategy seems to be working well. ...More

Why We Believe Under Armour To Be Slightly Expensive At The Moment

To say that Under Armour (NYSE:UA) had a rough 2017 would be a severe understatement. Over the past few quarters, a confluence of events that occurred in the North American athletic sector, including bankruptcies and store closures, declining productivity, traffic, and shifting fashion preferences, has contributed to declining sales in the U.S. ...More

What Will Drive Under Armour’s Near Term Growth?

After posting consistent gains for over a decade, Under Armour (NYSE:UA) hit an all-time low early last year. With a slowing North American apparel market and lack of a strong international presence, the company reeled under the pressure of a building inventory, causing it to see some of its lowest revenue figures in years. However, those days seem to be behind the company now. ...More

Why Have We Revised Our Price For Under Armour Upward?

Under Armour (NYSE:UA) has had quite a rough time since financial troubles started brewing near the beginning of 2017. North American sales have declined consistently since then on changing consumer trends. ...More

What To Expect From Under Armour’s Q1 Earnings

Under Armour (NYSE:UA) is all set to report earnings for Q1 on Tuesday. The company has had a rather rough time over the past few quarters. North American sales have declined considerably over much of 2017 on changing consumer trends. ...More

What To Expect From Under Armour’s Q4 Earnings

Under Armour (NYSE:UA) has had a rather tough year so far, and the results in Q3 are testament to this fact. The company fell dramatically short of the expected revenue figure, while earnings missed by 3 cents. In the year, revenues have been hurt on weaker North American demand spurred on by changing consumer trends. To put this into perspective, business in the U.S. ...More

Why Have We Revised Our Price For Under Armour Downwards?

Under Armour (NYSE:UA) has had it pretty rough this year. The company, which was once pegged to be the next Nike, has seen significant drops in its top and bottom lines over the past few quarters. Revenues were hurt on weaker North American demand spurred on by changing consumer trends. ...More

Under Armour: The Year In Review

Correction: A previous version of this article referred to Under Armour closing its golf and tennis business, as well as downsizing the connected fitness business.  These references were inaccurate and have been removed. ...More

Why Is Under Armour Pushing Its International Presence?

Unlike its competitors, Under Armour (NYSE:UA) has hardly improved its international reach since 2010. While Nike and Adidas look for a balance between their domestic and international businesses, Under Armour pushed its North American business to try and gain significant market share. ...More

Why Should Under Armour Give Up On Its Connected Fitness Division

Since earlier this decade, Under Armour (NYSE:UA) has found itself at the forefront of trying to infuse technology with its sports apparel. The company clearly understood its importance and has always been somewhat of a pioneer when it comes to connected fitness technology. However, over the past few quarters, things at its Connected Fitness segment have slowed down significantly. ...More

How Important Is Athleisure For Sports Apparel Companies?

Activewear, or the 'Athleisure' trend, has become so popular, it has carved out a niche for itself in the clothing industry, while winning an entry into the Merriam-Webster dictionary, which defines it as "casual clothing meant to be worn both for exercising and for general use. ...More

What Under Armour Will Focus On Going Forward: Direct-To-Consumer Channel (Part 3)

In the last part to this series, we examined how international markets are set to play a major role in Under Armour's (NYSE:UA) resurgence. In the following analysis, we will discuss how the company is pushing its direct-to-consumer channel, and more specifically e-commerce, in an effort to reduce its reliance on the wholesale channel, which in the recent past has suffered heavily. ...More

My Notes

Name (Required)
Email (Required, but never displayed)