Under Armour, Inc. UA, a leading developer, marketer and distributor of branded performance products, has been focusing on brand development and product innovation for quite some time now.
The company has also ventured into technology-based fitness business and has been trying to boost its direct-to-consumer business through store expansion initiatives and enhancement of its e-commerce platform.
The above mentioned efforts proved beneficial as the company witnessed top-line growth of 28.5% in the second quarter of 2015, posted on Jul 23, 2015. Further, the company now projects net revenue of $3.84 billion for 2015, up from $3.78 billion expected earlier, reflecting 25% growth from 2014.
Furthermore, Under Armour continues to seek opportunities to widen its global footprint and market share. In the process, the company has opened its factory and brand stores in Canada and China while providing franchise licenses across many countries in the past few years.
Another major tool used by Under Armour to broaden its ambit is the development of an International e-commerce team. The company is also entering into deals with athletes like basketball star Stephen Curry and golfer Jordan Spieth, which will help in enhancing brand recognition and gain an edge over its competitors.
Moreover, with increasing consciousness about fitness among people, the company has entered into the business of fitness gadgets and tracking tools to attract customers. The recent acquisitions of Endomondo and MyFitnessPal mark the company’s efforts to boost its digital capabilities.
However, while reporting second-quarter 2015 results, management cautioned that weakening of foreign currencies against the U.S. dollar and costs related to the recent acquistions (Endomondo & MyFitnessPal) may keep margins under pressure.
Currently, Under Armour carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
Some better-ranked stocks in the same industry are Perry Ellis International Inc. PERY, Columbia Sportswear Company COLM and Teijin Ltd. TINLY. All the three stocks carry a Zacks Rank #1 (Strong Buy).
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