Under Armour's (UAA) Growth Strategies Appear Encouraging
Under Armour, Inc.’s UAA focus on strengthening its brands through enhanced customer connections, effective innovations, better price points and a loyalty program should help it to stand firmly in the challenging operating market. The company has been progressing smoothly on its multi-year transformation plan.
We note that shares of this athletic footwear, apparel and accessories dealer have increased 34.4% over the past three months compared with the industry’s 25.7% rise. Analysts seem optimistic about the company. The Zacks Consensus Estimate for fiscal 2025 sales and earnings per share (EPS) is currently pegged at $6 billion and 59 cents, respectively. These estimates show corresponding increases of 3.8% and 20.8% year over year.
Strategies in Detail
Under Armour’s focus on reinforcing brands and strict go-to-market processes appears encouraging. Additionally, the company strives to boost its operating model as well as return greater profitability and value to shareholders. Its growth strategy is focused on improving sales through product innovation, building long-term relationships with key wholesale partners, investments in its stores and digitization to directly reach customers, and selling more inventory at full price.
UAA is focusing on digitization by converting real-time data and analytics to drive brand interest and consideration within its largest categories. Restructuring initiatives, cost management, inventory balance and emphasis on productivity should position the company well for growth.
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To aid overall growth, management highlighted priorities to drive clarity and business alignment across the company. The initiative, which is named Protect This House 3 or PTH3, is focused on driving global brand heat, staying relentlessly focused on elevating design and building better products and driving growth in the United States. With this plan, management is optimistic about creating a more advantageous position to unlock consistent and sustainable growth.
In addition, Under Armour has been trying to boost its direct-to-consumer business through store expansion initiatives and the enhancement of its e-commerce platform. Management has been investing in boosting digital capabilities to drive growth in the direct-to-consumer (DTC) channel. This includes buy online and pick-up in store facilities and flexible payment capabilities. In the second quarter of fiscal 2024, the company’s DTC revenues increased 3% to $596 million due to a 2% rise in e-commerce revenues, which represented 35% of the total DTC business in the quarter.
To wrap up, Under Armour is well-poised for growth based on the aforementioned strengths. A Value Score of B for this current Zacks Rank #3 (Hold) company further demonstrates strength.
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