Under Armour, Inc. (NSYE: USA) is one of the successful companies in the sports clothing and accessories industry in the United States and across the borders. The company’s stock prices in 2014 have been considered the highest and a record breaking stock price. The company’s highest stock prices this year was on February 7, 2014 at $110.00. The stock prices of the company have been steadily rising in the previous year with the lowest recorded stock prices at $46.31 this year. The company has indicated good signs of growth and development after its establishment in 1995, and having its first IPO in 2005 on the University of Maryland Campus by its CEO, Kevin Plank, who is also the football special team captain. Its fourth quarter of last year was extremely unbelievable. The company had an incredible holiday season and spent money on advertisements at the expense of higher profits. These advertisements were aimed at gaining more customers during the holiday season. Results indicate that this spending paid off increasing the investors’ confidence. The company even surprised economic analysts’ expectations to produce a 23 percent increase in the athletic wear industry, which includes apparel and shoes at a time when most of the retail companies in the United States were struggling.
In the latter quarter of 2013, the net revenue collected by Under Armour increased to $ 638 million, which represents a 35 percent increase. Consequently, this resulted into a 27 percent increase in the annual revenue, which translated into $2.33 billion. The quarter also diluted the earnings per share. This resulted into a 27 percent increase in the company’s profitability, raising the values of the company’s shares to $0.59 per share, and a full year diluted earnings per share increase of 24 percent, which also translates to $1.5 per share by the close of the financial year.
Since its establishment, Under Armour has recorded annual progress, which serves as a clear indicator that for success. The latter quarter of 2013saw the revenues increase by 35 percent from the previous quarter, which translates to $683 million in terms of revenues received by the company. The net income for the fourth quarter also increased to $64 million from $50 million the previous year, which represents a 28 percent increase. The annual success of the company, especially in the fourth quarter of 2013 and in the first quarter this year has been primarily associated with the company’s expansion of its wide range of fleece offerings as well as new cold gear infrared products. The footwear revenues in the fourth quarter also add to this success. These revenues increased by about 24 percent from the previous year to $55 million from $45 million net revenues. The hats and gloves have also shown similar results in the two compared periods. The total annual revenue growth of Under Armour was 36 percent. The continuous cold winter season has been attributed to increasing annual revenues for the company because it stimulates buyer behavior for the warm gear to counter the weather conditions.
The company, which was founded on selling football shirts, has recorded an average increase in its revenues by 20 percent for the last fifteen quarters. It has also diversified its operations to include selling a full catalogue of apparel. The company also participates in sponsorships soccer teams in the United Kingdom, Mexico, and Chile in its international expansion strategy. It also seeks to widen its branches to different destinations in the world.
One of the bigger achievements of Under Armour in 2014 is the $150 million acquisition of MapMyFitness, which is a technology company. This is the company’s first ever acquisition. This is considered as one of the moves taken by the company to stay ahead of competition. Most of the sports apparel companies have developed into sports technology besides selling the sports gears. Armour39 was a chest trap developed by Under Armour to track biometric signals when working out. Armour39 alongside MapMyFitness will ensure that the athletes and coaches, and other users get real data. The acquisition indicates the company’s big portfolio as well as its desire and ability to lead the technological path in apparel industry. The company’s apparels are popular for their moister-wicked fabrics, which are designed for all climatic conditions. The technological advancements in the company’s apparels include their featherweight and seating capabilities without making the people wearing them feel uncomfortably hot.
In the 2014 calendar, one of the company’s plans is to expand its women line. The company projects that the expansion of the women line would increase the company’s revenues even further, which implies more success. The women’s apparel sector of the company has proved its viability since it leads the pack in the revenues. According to the company’s CEO, they intend to increase the women’s line to a $1 billion holding under the company in the next two financial years. More advertisements will be aimed towards popularizing the women’s sector beginning this month to study the feasibility of the proposed investment.
Works Cited:
Burke, Monte. “Under Armour, With First-Ever Acquisition, Enters The World Of Software.” Forbes. Web 11/14/2013 http://www.forbes.com/sites/monteburke/2013/11/14/under-armour-with-first-ever-acquisition-enters-the-world-of-software/
Sarah Meehan. “How Under Armour plans to grow its women's line into a $1B business.” Baltimore Business Journal. Web Oct 28, 2013, http://www.bizjournals.com/baltimore/news/2013/10/28/under-armour-womens-apparel-business.html?page=all
Under Armour. “History.” http://www.underarmour.jobs/our-history.asp
