UAA - Under Armour Is Searching For A Much-Needed Revenue Growth Boost
- Under Armour's stock price dropped to around $20/share from $50/share in 2015, as changes in consumers' preference in part caused the tepid sales in North America.
- The pandemic has encouraged people to exercise more, possibly leading to more sporting goods purchases. However, we have not yet seen any breakthrough strong enough to challenge other players' dominance.
- DTC distribution channels expansion, in addition to tightened inventory management, has improved margins. Lower Capex, too, contributed to the better free cash flows.
- Still, the essential part is how Under Armour will lift its revenue growth in the future because efficiency efforts should have limits, in our view.
- Investment risks include the new virus variant that could discourage people from going to the gym and intense competition from other players.
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Under Armour Is Searching For A Much-Needed Revenue Growth Boost