Under Armour's sustained focus on brand development, DTC business expansion, product innovation and foray into technology-based fitness business have bode well for the company as it registered revenue growth of over 20% for the past 18 consecutive quarters. In the third-quarter 2014, the company witnessed top and bottom-line growth of 29.7% and 20.6%, respectively. However, we observe that the rate of top-line growth decelerated from 34.1% achieved in the second quarter. Further, we remain slightly apprehensive about the company's future performance due to soft economic recovery and cautious consumer spending. Also, risks of sourcing merchandise from overseas markets may have an adverse impact on the company's operating performance. Given the pros and cons embedded in the stock we maintain our Neutral recommendation.
Incorporated in 1996 and headquartered in Baltimore, MD, Under Armour, Inc. is one of the leading designers, marketers, and distributors of authentic athletic footwear, apparel, and accessories for a wide variety of sports and fitness activities in the United States and internationally. It offers a wide variety of products including sporting goods and lifestyle products.
The company mainly sells its products through wholesale channel which include national and regional chains of retailers and smaller, independent and specialty retailers. Apart from this, the company also offers its merchandize through a network of brand and factory house stores as well as through its website and catalogs.
Under Armour provides its products for use by professional football, baseball, hockey, and soccer players, as well as other athletes primarily under the brand names of HeatGear, ColdGear, Under Armour, LooseGear, and AllSeasonGear. It also offers T-shirts, sweatshirts, socks, performance bags, baseball batting gloves, football gloves and cleats, and other related products for use in outdoor activities. In addition, the company provides accessories, such as baseball caps, knit caps, visors, headwear, and wristbands.