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Under Armour Enhances Digital Capabilities, Expands Globally

Zacks

The rise of health consciousness consumers has compelled Under Armour, Inc. UAA to focus on the development of fitness gadgets and other fitness tracking platforms. The acquisition of MapMyFitness was a step toward this direction. The buyouts of Endomondo and MyFitnessPal are also in line with the company’s strategy to expand in the fitness space.

By acquiring fitness technology companies, Under Armour has enhanced its digital capabilities which allow it to launch digital products and fitness tracking platforms. The company also unveiled a state-of-the-art line of connected fitness products comprising UA HealthBox, UA SpeedForm Gemini 2 Record Equipped and two models of wireless headphones.

Per management, the sale of UA HOVR, which was launched in February 2018, surpassed expectations. The launch of these shoes reflects the company’s continued focus on improving a runners’ experience. The HOVR platform launched two running styles, namely, the UA HOVR Sonic and UA HOVR Phantom. These shoes can also be connected to the MapMyRun app.


Meanwhile, the company’s continuous efforts to expand its product portfolio has helped it to outperform the industry over the past month. The stock has gained 15.5% compared with the industry’s gain of 1.7%.

Apart from expanding its product line, this Zacks Rank #3 (Hold) company continues to seek ways to expand its global footprint and market share. Though the company generates a major portion of its revenues from the North America region, it intends to expand business operations to other parts of the world to mitigate the risks stemming from concentration in one geographic region.

Sales decline in North America has been a major concern for investors in the past few quarters. In fact, the company has been reporting sluggish sales from the region since fourth-quarter 2016.

Nevertheless, the company is expanding its DTC business in the U.K., Germany and the Netherlands. Further, it has rolled out e-commerce platforms in Mexico, Australia, New Zealand and Chile. Another major tool used by Under Armour to broaden its base is the development of an international e-commerce team.

Stocks to Consider

Delta Apparel, Inc. DLA has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Michael Kors Holdings Ltd. KORS has a long-term earnings growth rate of 7% and a Zacks Rank #2 (Buy).

Ralph Lauren Corp. RL has a long-term earnings growth rate of 10.2% and a Zacks Rank #2.

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