2 UA has been crushing it in growth, with ONLY 6% of revenue coming from international sales. This previous spring the launched their first large ad campaign in Europe and hired former Adidas executive Karl-Heinz Maurath to run its international business. They have been making all kinds of moves to get into Europe, and it’s only a matter of time before they get into Asia. Here are some excerpts.
From an article detailing their 2012 10K
International. While the Under Armour brand is ubiquitous in American sports, the company still struggles with international sales overseas. Only 6 percent of the company’s total revenue came from outside North America in 2012 due somewhat to the company’s unfamiliarity “with regulatory environments and market practices outside of North America,” according to the annual report. A lack of overseas sales hurts in footwear, especially when Nike (NYSE: NKE) has a significant international presence.
Full article here
From a Forbes article last spring detailing their international expansion
starting in the fall, Under Armour will begin a five-year deal as the uniform sponsor of the English Premier League club Tottenham Hotspur.
“Our history from a marketing standpoint has been really focused on the US market. This is the largest paid media effort we’ve done in Europe,” said Stuart Redsun, Under Armour’s vice president of global marketing. “We feel that it’s time to tell our story [in Europe] though, because we’ve built authenticity with our presence on the field.”
Currently, the company has full uniform sponsorship deals with the Welsh Rugby Union, Israel’s Maccabi Tel Aviv soccer team and Greece’s Aris FC soccer team, and individual endorsement deals with Tottenham defender Michael Dawson, Queens Park Rangers striker Bobby Zamora and Welsh rugby player Jamie Roberts.
Plank, who debuted on the Forbes Billionaires list this year at No. 1,075, has not been shy about Under Armour’s international ambitions. “Under Armour is deeply committed to continued international growth, and [Maurath]’s vast global expertise will be instrumental in our progress towards that goal,” Plank said in a release announcing Maurath’s hiring. Maurath was previously a managing director for Adidas in Thailand and Sweden, and senior vice president for the company in Latin America.
According to Under Armour’s 2011 annual report, net revenues from international sales increased 35 percent last year to $89 million. The sum represents just six percent of the company’s total $1.47 billion in net revenues. The company has approximately 4,000 points of retail throughout Europe, the Middle East and Africa, compared with 18,000 retail sites in North America, including big box giants Dick’s Sporting Goods and The Sports Authority.
“We believe the future success of our brand depends on developing our business outside of North America,” says a line in the report.
Analyst Andrew Burns, vice president of D.A. Davidson Equity, said overseas expansion is the best growth strategy for the company, which has a current market cap of roughly $5 billion. Burns said 40 percent of the company’s growth since 2008 has come in direct-to-customer sales, such as outlet stores and online.
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Under Armour’s Redsun said the company’s European campaign will showcase its individual athletes, in addition to American skier Lindsey Vonn and UK martial arts expert Chloe Bruce. Redsun said the television and digital ads will feature two athletes competing against each other during their respective training sessions. Roberts, the Rugby player, will be shown training with Bruce, the karate expert.
Full article here.
If you want to get to the nuts and bolts, and check out some modeling by analysts who gave the stock an upgrade to “market weight,” check this out.
They really seem to be hiring the right talent, my only question is how fast it’s possible for them to grow their Female, International, and footwear segments? It needs to be relatively fast to keep trading at the current multiple, but I think they can do it. The real tell will be their earnings report on 4/15/2013, where we will found out if they grew or not.
2 Responses to “$UA and the International Market”
UncleBuccs
Rhino, I really am enjoying the research that you are unearthing. What I appreciate about UA the most from what you’ve posted, is that they “get it”.
UA has made it very apparent that they recognize their weaknesses, and seem pretty aggressive about addressing them. If they are successful, there’s mucho growth to be had.
I see how Maurath’s hiring addresses the European market, and Leanne Fremar will hopefully add more compelling designs in her leadership of the women’s segment. My current concern is in regards to UA’s footwear.
What UA has is pretty limited, and while I appreciate that their designs are for “performance”, they are really missing out on the street wear niche. It is going to be tough for them to crack into this market, as it’s crowded, and UA shoes have been out there for a while, without garnering respect or any type of “hype”.
I am super interested in UA, but I’m slow, and will most likely wait to see what things look like come April….and I want to see some progress in inventive designs in the women’s yoga wear.
Fumnnoresoymn
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