Under Armour (UA, Financial) is an American sports clothing and accessories company. The company is a supplier of sportswear and casual apparel. After recording consistent growth over the last few quarters, Under Armour’s share price has almost doubled in just over two years. Although the stock may look overpriced, the company’s latest earnings report shows that strong growth is still intact and the company can continue growing in the future.
In the result of Q1FY15, the company’s net revenue escalated 25% to $805 million. Their result represented 20th successive quarter accomplishing above 20% revenue growth. For this quarter, net revenue grew 27% on a currency neutrality basis. Overall net revenue in North America had a 1% to 2% effect due to weather related store closures and west coast port delays.
Apparel net revenues, footwear net revenue and accessories net revenues increased 21% to $555 million, 41% to $161 million and 23% to $63 compared to $459 million, $114 million and $52 million of previous year’s quarter respectively.
The company’s global direct-to-customer net revenues up surged 21% for this quarter representing around 25% of net revenues. Costumer continues to shift to mobile which signified over 40% of their traffic and approximately 20% of their ecommerce sales during previous quarter.
In North America, net revenues grew 20% to $700 million in the first quarter 2015 equated to $538 million in the first quarter 2014. International net revenues grew 74% to $96 million in the first quarter, indicating 12% of total net revenues.
On a currency neutral basis, North America net revenues and international net revenues surged 21% and 86% for previous quarter.
On deck
Under Armour is performing well as seen from their consistent results despite external headwinds, including the strong U.S. dollar undesirably obstructed their business. The company introduced new Speed Form Gemini and Apollo Event running shoes, as well as Stephen Curry's first signature basketball shoe, the Curry One, horde marvelous interest for the category in the mart.
The company is a force to be figured with and has been gradually up surging its share of both the footwear markets and sports apparel. The company has also presented a robust skill to recognize talented athletes early in their careers and sign them to long-term validation deals. This appreciated capability was on full spectacle in recent times as 21-year-old phenom Jordan Spieth won his first Masters, faintly more than a year after Under Amour signed him to a 10-year bond. That's a deal that will likely pay off for Under Armour –Â and its shareholders –Â for the next era.
The results allied with the current performances of Under Armour athletes like Tom Brady, Lindsey Vonn, Stephen Curry and most recently Jordan Spieth, are gripping and is a future signal that the company is just getting on track to move towards north.
Conclusion
Although Under Armour has recorded terrific growth in the last few quarters, the company still has a lot of room to grow. Under Armour still commands a tiny market share as compared to peers like Nike and is poised to grow further. Hence, I believe Under Armour is a buy at present prices.
