Spring Time Is Big Time for Under Armour and Nike

With a tidal wave of spring-related sports about to begin, athletic apparel company Under Armour remains the best way to capitalize.

Apr 2, 2014 at 3:06PM

The spring season is a busy time for sports in America. As football begins to awaken from its slumber and baseball gets set for its opening day, fans have a lot to be excited about. As it turns out, so do investors.

Companies that have large exposure to these major sporting events are likely to benefit in big ways. Athletic apparel, footwear, and accessories maker Under Armour (NYSE:UA) remains one of the biggest beneficiaries of the springtime boom in sports.

Spring ahead
It seems like the 2013 NFL season only just ended with the destruction of Peyton Manning and the Denver Broncos in February's Super Bowl in New York. However, with the impending 2014 NFL draft set to begin on May 8, football is beginning to take over the American sports realm once again. Meanwhile, with baseball's opening day having just passed, fans all over the country have begun heading to their local teams' stadiums and cheering for their clubs.

The one thing both sports have in common, outside of enthusiastic fan bases, is that they drive incredible sales for athletic apparel, footwear, and accessories manufacturers. For Under Armour in particular, the impact is massive.

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Source: Company website. 

Unique products
Management at Under Armour continues to capitalize on the company's alliances with major sports programs like the NFL and MLB. Since 2009, Under Armour has been the official sponsor of the NFL's Scouting Combine, which is the premiere training program for college athletes to showcase their talents to prospective NFL teams. 

While the Scouting Combine already took place in February, the benefits of the program for Under Armour last well beyond that. All the way up until the draft in May, sports programs on television consistently show clips of the Combine when analysts evaluate prospective draftees. All the participants in the Combine have to wear Under Armour gear, which means the sports brand receives repeated advertising. 

For baseball, Under Armour uses its high-profile endorsements like that of Bryce Harper to spread awareness of its training gear. The company's website has a whole section dedicated to training like Bryce Harper.

Also, Under Armour has been the official footwear supplier to the MLB since 2011. The company's logo is featured on all MLB Authentic Collection baseball cleats. The opening day of baseball means Under Armour's logo is suddenly seen by millions of viewers across the country and the world. 

Although Under Armour remains a great way to benefit from the spring's increase in sporting events, it's not the only company that with an advantage in this regard. Athletic footwear and apparel giant Nike's (NYSE:NKE) brand awareness increases dramatically as well.

Nike remains the official supplier of NFL team uniforms, which are boldly presented on stage every time a player is drafted. Additionally, Nike's huge presence in the sport of basketball is enhanced in the spring, too, as the NBA gets set to begin playoffs in the weeks ahead. Major sponsorship deals with players like Lebron James, Kevin Durant, and even the injured Kobe Bryant mean that Nike's stranglehold on the basketball market should remain unchallenged in the long term and pick up in the spring.

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Bottom line
Strong brands can only get you so far. In business, it is often about connections as well. Luckily for Under Armour and Nike, the companies' alliances with major American sports programs means their advantages over competitors will remain strong. As the tidal wave of spring sports begins, look for Under Armour and Nike to benefit in the months ahead.

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Philip Saglimbeni owns shares of Under Armour. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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