About Under Armour, Inc.
Under Armour makes performance clothes for doing battle on the sports field and in the gym. The company offered collegiate, National Football League ("NFL") and National Basketball Association ("NBA") apparel and accessories, baby and youth apparel, team uniforms, socks, water bottles, eyewear and other specific hard goods equipment that feature performance advantages and functionality similar to our other product offerings. The company also makes technology that helps customers track their fitness. It sells online, by catalog, and through retail and outlet stores worldwide. Under Armour operates worldwide but generates most of its revenue in North America.
Apparel designed for winter (COLDGEAR), summer (HEATGEAR), and year-round (ALLSEASONGEAR) wear accounts for about two-thirds of sales. Footwear brings in about 20% of sales with accessories such as hats, bags, and gloves contributing just under 10%.
Under Armour also has a small but growing Connected Fitness business, which includes fitness-related apps such as MapMyFitness, MyFitnessPal, and Endonondo. The free-to-use apps generate revenue from advertising and account for the remaining revenue (along with licensing fees).
Almost all of Under Armour's products are made by third-party manufacturers in some 15 countries. About 55% of the company's products are made in China, Jordan, Vietnam, and Malaysia.
Under Armour operates globally. Beyond North America, where it generates about 70% of sales. It also sells in Australia, India, Japan, Hong Kong, and South Korea through a third-party licensee.
The company's corporate headquarters are located at Baltimore, Maryland, and additional headquarters at Europe, Latin America, and Asia Pacific.
The company's distribution facilities are in Sparrows Point, Maryland; Mount Juliet, Tennessee; and Rialto, California. It also operates more than 385 brand and factory house stores located primarily in the US, Canada, China, Chile, Korea, and Mexico.
Sales and Marketing
Under Armour generates about 60% of its sales through its wholesale business, although its direct-to-consumer business is growing rapidly.
Sports marketing -- on the high school, collegiate, and professional levels -- is key for the company in building its brand and expanding its customer base. Under Armour uses outfitting agreements; professional, club, and collegiate sponsorships; and individual athlete and influencer agreements to attract attention. It also sponsors and hosts consumer sporting events such as youth camps and clinics.
The company's advertising expense was $578.9 million, $543.8 million, and $565.1 million in 2019, 2018, and 2017, respectively.
The company's net revenues grew to $5.3 billion in 2019 from $4.0 billion in 2015. They believe that their growth in net revenues has been driven by a growing interest in performance products and the strength of the Under Armour brand in the marketplace.
Net revenues increased $73.9 million, or 1%, to $5.3 billion in 2019 from $5.2 billion in 2018. The increase in net sales was driven primarily by unit sales growth in footwear, resulting from strength in their run category. The increase was partially offset by unit sales decline in accessories driven by softer demand.
Net income in 2019 increased $138.4 million to $92.1 million from a loss of $46.3 million in the prior year. The recovery was mainly due to recovering in restructuring and impairment charges and lower interest expense.
Cash at the end of 2019 was $796.0 million, an increase of $229.9 million from the prior year. Cash from operations contributed $509.0 million to the coffers, while investing activities used $147.1 million, mainly for capital expenditures. Financing activities used another $137.1 million for payments on long-term debt.
The company's long-term growth strategy is focused on increased sales of their products through ongoing product innovation, investment in their distribution channels and international expansion.
Under Armour's marketing and promotion strategy begins with providing and selling their products to high-performing athletes and teams at the high school, collegiate and professional levels. They execute this strategy through outfitting agreements, professional, club, and collegiate sponsorship, individual athlete and influencer agreements and by providing and selling their products directly to team equipment managers and to individual athletes.
The primary goal of their retail marketing strategy is to increase brand floor space dedicated to their products within their major retail accounts. The design and funding of Under Armour point of sale displays and concept shops within their major retail accounts has been a key initiative for securing prime floor space, educating the consumer and creating an exciting environment for the consumer to experience their brand.
The company's inventory strategy is focused on continuing to meet consumer demand while improving their inventory efficiency over the long term by putting systems and processes in place to improve their inventory management. These systems and processes, including their global operating and financial reporting information technology system, are designed to improve their forecasting and supply planning capabilities.
Under Armour was founded in Washington, DC, in 1996 and moved to Baltimore, Maryland, two years later. It promoted apparel specifically for athletes, fabric designed to keep them cool when it is hot and keep them warm when it is cold.
The company considers its inclusion in the 1999 film Any Given Sunday as its big break, claiming that "athletes everywhere took notice."
It continued focusing on the sports world, inking supplier or licensing deals with the NHL, MLB, and USA Baseball in the early 2000s. Under Armour went public in 2005.
The following year the company moved into footwear with a line of football cleats; it eventually became the official footwear supplier to the NFL.
1020 Hull St FL 3
Baltimore, MD 21230-5356
Phone: 1 (410) 454-6428
Employer Type: Publicly Owned
Stock Symbol: UAA
Stock Exchange: , NYSE
Acting CFO: David E. Bergman
President and COO: Patrik Frisk
Chairman and CEO: Kevin A. Plank
Employees (This Location): 271
Employees (All Locations): 16,400
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