19 Jan

Under Armour Plans to Expand Its International Presence

WRITTEN BY Sonya Bells FEATURED IN Pre-Release Earnings Reports

Under Armour’s international sales

Under Armour’s (UAA) international sales rose 66.0% to $525.0 million in the first nine months of fiscal 2016. International sales include sales outside the United States and Canada. In comparison, the company’s North American sales rose 20.0% in the same period.

International sales now account for about 15.0% of UAA’s total sales compared to less than 6.0% in fiscal 2013. The company has plans to further expand this business to ~18.0% of its total revenue by fiscal 2018.

Under Armour Plans to Expand Its International Presence

To increase visibility in international markets, UAA sponsors several sports franchises, including the São Paulo Football Club, a soccer organization in Brazil, and the Tottenham Hotspur Football Club in England’s Premier League. It’s also the sponsor of Scottish tennis star Andy Murray.

China is the most important region for international sales

China is the cornerstone of Under Armour’s global growth strategy. The company began its China operations in 2010. Within a short span of five to six years, China emerged as UAA’s largest international market in terms of sales.

During the company’s 3Q16 conference call, CEO (chief executive officer) Kevin Plank commented, “It’s our Greater China market that remains the biggest growth story for our international business.”

The company sees enough potential for further expansion and expects its China revenues to double in fiscal 2016. To increase brand recognition, Plank recently conducted a roadshow in China with Stephen Curry.

The company has been aggressively expanding the number of doors in China. It has already added 100 doors in 2016, closely following its full-year target of 120 doors.

However, competitors Nike (NKE) and Adidas (ADDYY) already have a strong footing in China. Nike has been witnessing more than a 20.0% growth in the Chinese market and has maintained its number-one position in the Chinese sportswear market.

If you want to add exposure to UAA, you can consider the iShares Russell Mid-Cap Growth (IWP), which invests 0.20% of its portfolio in the company.

In the next part of the series, we’ll take a look at Under Armour’s margins and profitability.

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