Under Armour Eyes Bigger Footwear, International Sales
After making a name for itself in the U.S. with its line of athletic apparel, Under Armour is gunning for a larger slice of the footwear and international pies.
To get there, it’ll have to carve out market share against a couple of 800-pound gorillas in the athletic apparel and shoe business.
Under Armour (NYSE:UA) makes and sells performance-related gear, ranging from training T-shirts, warm-up jackets, underwear and swimwear to cleats, backpacks, sunglasses and water bottles.
Its website lists dozens of items for men, women and kids.
The company sells its gear via sporting goods retailers such as Dick’s Sporting Goods (NYSE:DKS) and Sports Authority, as well as its own stores. With the brand’s popularity and name recognition on the rise — and physical fitness an American pursuit — it can also be found in places such as upscale department store Nordstrom (NYSE:JWN).
Last year more than three-quarters of Under Armour’s sales came from apparel, while only 13% came from footwear. The geographic disparity was even wider: 94% of revenue came from North America, with the rest coming from elsewhere in the world.
To help bring more balance to those percentages, Under Armour has been working to expand its footwear business as well as its international footprint.
Both initiatives will require trying to elbow into markets that are dominated by high-profile names such as Nike (NYSE:NKE) and Adidas.
That won’t be easy.
In The Footsteps Of Giants
In a recent report, analysts from Trefis noted that the Under Armour footwear brand has only a 2.5% share of the U.S. market. By comparison, Nike has a nearly 25% share of the global sports footwear market and 60% of the U.S. sports footwear market if you include the Jordan and Converse brands.
Shoemaker Skechers USA (NYSE:SKX), profiled in The New America earlier this month, is making a run for the athletic-shoe market too.
“If Under Armour is to increase its market share, it will have to grow at a faster rate than the overall market, which means that it will have to attract customers away from competitors such as Nike, Adidas, Puma, Skechers, Asics and Wolverine,” Trefis said.
Trefis also notes that Under Armour will have to expand beyond running shoes into other categories such as basketball, baseball, soccer, training and casual shoes.
Analyst Andrew Burns of D.A. Davidson points out that Nike “has dozens of platforms” in athletic footwear, while Under Armour has only a few.