Under Armour (UAA) in Smallvalue Q2 2024

Challenges in Competitive Advantage and Inventory Management

Jul 04, 2025

Summary

Initial investment driven by attractive valuations and brand endorsements.
Faced significant challenges post-COVID-19, impacting financial performance.
Lacked competitive advantage, leading to inventory build-up and margin declines.
Stock surged over 150% from initial purchase but failed to sustain momentum.
Future outlook remains uncertain due to ongoing operational challenges.

In the Smallvalue Q2 2024 fund letter, Under Armour (UAA, Financial) was highlighted as a challenging investment since its acquisition in August 2020. The company, known for its sportswear and high-profile endorsements, initially presented attractive valuations. However, post-COVID-19, Under Armour struggled with inventory build-up, declining earnings per share (EPS), and reduced margins, which were not adequately addressed in time.

"Under Armour represented my first investment, and despite its initial surge, the lack of competitive advantage and operational issues led to a significant learning experience." — Smallvalue, Q2 2024 Fund Letter

Read full letter at gurufocus Smallvalue 2024 Q2 page.

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