Under Armour’s (UAA) efforts to grow its international business have begun to pay off, with overseas revenue up 35% YOY (to $305 million); including a staggering 52% increase (to $130 million) within the Asia-Pacific region. Much of that growth can be attributed to China, a market UAA believes has billion-dollar potential for the company — perhaps not unrealistic if you consider the Chinese government intends to grow its domestic sports industry to $750 billion by 2025. The company also launched its brand in India earlier this year. EMEA revenue grew +22% YOY to $128 million. It’s worth noting for comparison purposes that while UAA generates just 25% of its gross revenue outside of North America, Nike (NKE) and Adidas (ADDYY) generate nearly 60% and 80%, respectively, overseas.
Howie Long-Short: When Under Armour shares dropped 24% following the release of disappointing Q3 earnings report (the company’s biggest single day drop in history). Short-sellers made $251 million in market-to-market profits; bringing the total to nearly $1 billion YTD. Easy money for those that read Piper Jaffray’s biannual Taking Stock of Teens survey (or read JWS daily); UAA was once again named the No. 1 company teenage males perceive as an “old brand”, one they will no longer wear. Shares of the company are down 55% YTD.
Fan Marino: Under Armour’s fastest-growing segments aren’t sneakers and apparel, but connected fitness (+16% YOY to $23.4 million) and licensing (also +16% YOY). While the revenue generated by the new technology division remains diminutive relative to the company’s total Q3 revenue ($939 million), the growth has encouraged UAA to further invest in products and initiatives related to digital health and fitness. CEO Patrik Frisk said the company intends to use the connected platform and data collected from the software to “sell more shirts and shoes.” The company will be releasing its first smart shoe, with HOVR foam technology (new cushion technology), in February 2018.
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