$UA GETTING TRACTION IN THE SNEAKER WORLD

I took the weekend off and flew out to southern California. My son was invited to a big showcase camp (Elite 32 King of Kings Camp) and also had a tournament with his AAU team there in Garden Grove. If you haven’t heard me talk up this kid, he’s a beast. 12 years old, 5’10. He’s nationally ranked, even though I know that means nothing…but his team is #1 ranked 2022 team on the West Coast, and #16 in the nation. I mention this partly because I’m a proud dad…lol, but also because he’s at the hub of youth basketball on the west coast. The kids all want to talk about moves and shoes. Period. For these kids, the shoes are part of their personality and popularity at these tournaments.

We travel to SoCal often, normally a couple times a month in the summer for events and tournaments. Since all my boys want to talk about is shoes, I have them pointing out the best shoes to me non-stop all weekend. During the late summer, I started to see a handful of Under Armour basketball shoes hit the court. Not the vanilla Under Armour basketball shoe, but the Curry signature shoe. Again, just a handful started to show up in the gym….but this weekend, about a third of the camp was equipped with the newest version, the Curry 2.

The kids get together to compliment each others shoes, but the only kids receiving compliments and getting pointed at were those with the new UA Curry 2 shoe. There are already a handful of colorways out, but after the weekend, this was the shoe my son wouldn’t stop asking about.

Just last month, Under Armour (UA) CEO Kevin Plank announced at the company’s investor day in Baltimore that he expects revenue to double by 2018 to $7.5 billion, a bold 25% annual growth target from its current sales guidance for $3.84 billion for this year, and a speedup from Plank’s earlier stated goal to reach $10 billion by 2020.

Under Armour management sees 2018 international revenue at $1.35 billion, or 18% of the total, with footwear revenue sprinting to $1.7 billion.

UA’s footwear goals represent a 40% annual growth rate, Macquarie analyst Laurent Vasilescu told IBD. Both its footwear and international growth have been huge. In its most recently reported quarter, Under Armour overseas net revenue spiked 93%. Footwear revenue rose 40% to $154 million on product expansion in running shoes and excitement surrounding NBA MVP Stephen Curry’s signature shoe.

Expect to see Under Armour on the basketball court for many more years to come. The brand has signed the 27-year-old Golden State Warrior through 2024, extending their relationship. The Curry Two, a sequel to his first shoe, launches worldwide on Oct. 24 following early September releases in Asia.

From what I can tell, the shoe has already caught some pretty good traction, and the best way to determine values is to check the resale market where these shoes are already taking on a premium for sizes that have come up as sold out across online shops.

Here’s a look at the monthly chart, to sift though recent noise in the name, but I think this marks a great entry point in the name for a move to $120-125 into next year.

I just picked up a good sized chunk last week and have one more piece to add. Love this name into next year.