Under Armour (NYSE: UA) is a leading developer, marketer and distributor of branded performance products for men, women and youth. As of December 31, 2010, Under Armour’s revenues exceeded $1 billion and its market cap exceeded $3.5 billion on the NYSE. The organization expects 30%+ top and bottom line growth in 2011. UA has approximately 3,900 employees globally, including 2,200 in the company stores and 600 at the distribution facilities.
Founded in 1996, Under Armour has risen to the top of the industry pack, boasting more than 90% of the compression garment market. It ranks among the most recognized names in sports apparel and is considered by many to be one of the most successful consumer brand growth stories in history. The Company endeavors to build each and every UA product with superior fabrication and design innovation utilizing a variety of synthetic microfiber fabrications.
Under Armour began as an idea of its founder, Kevin A. Plank, then special teams captain for the University of Maryland football team, who set out to develop a next generation T-shirt. A year of fabric and product testing resulted in the first UA compression product, a synthetic shirt worn beneath an athlete’s uniform or equipment that provided a snug fit, like a second skin, and remained drier and lighter. Since then, UA’s products have evolved and expanded to include a wide variety of shirts, shorts, underwear, outerwear, footwear, gloves and other offerings, but its focus has remained the same, to develop and produce innovative performance products that enable the athlete to feel drier, lighter and more comfortable. UA products are merchandised to clearly communicate the condition or uses for which they were designed, including HeatGear® to wear when it is hot, ColdGear® to wear when it is cold and AllSeasonGear® to wear when conditions are between the two.
Under Armour’s products are worn by professional football, baseball, and soccer players, as well as athletes in major collegiate and Olympic sports. UA outfitted the 2011 NCAA football champions, the Auburn Tigers, as well as the U.S. Ski Team, USA Rugby, the National Hockey League and Major League Lacrosse. The company sponsored the recent NFL Scouting Combine to introduce a new biometric shirt that measures players’ useful performance data.
UA also sells its branded product to Premier League Football clubs in the UK, as well as golf, cricket, soccer and rugby clubs across Europe. While a large majority of the products are currently sold in North America, the products are gaining popularity around the globe and are now available in several countries in Europe, Asia Pacific and Central America.
UA’s revenues are generated primarily from the wholesale distribution of product to national, regional, independent and specialty retailers such as Dick’s Sporting Goods, Modells, The Sports Authority, Bass Pro Shops and Cabela’s. It also generates net revenue from product licensing and from the sale of products through its own direct-to-consumer sales channel, which includes UA’s factory house and specialty stores, website and catalogs. UA’s products are offered in more than 23,000 retail stores worldwide. In 2010, sales of apparel, footwear and accessories represented 80%, 12% and 4% of net revenues, respectively. Licensing arrangements represented the remaining 4%.
Originally targeting the menswear segment, UA has developed a significant presence in products for women and youth. Currently, UA sells its product lines to almost 400 women’s sports teams at NCAA Division I-A colleges. Recent category expansions include basketball shoes, headwear, and athletic bags.
UA’s products are made of innovative, technically advanced fabrics that are sourced in Central and South America, Asia and the United States. Nearly all of the company’s products are manufactured by third parties, split roughly between Central and South America and Asia, with a small portion in the U.S. and the Middle East. The company currently has an office in Hong Kong to support manufacturing, quality assurance and sourcing efforts for apparel, and offices in Guangzhou, China to support manufacturing, quality assurance and sourcing efforts for footwear. UA packages and distributes the majority of its product through two distribution facilities near its Baltimore headquarters. It also utilizes third-party logistics providers to distribute product in the U.S., Europe and Asia.
The Under Armour mission is simple: To make all athletes better through passion, design and the relentless pursuit of innovation. This mission leads to a culture of tremendous heart, soul, passion and energy, which is clearly evident in the people it attracts. – less