Why Jordan Spieth's Masters Performance Made Under Armour Happy

The Masters taught us three things. Lefties, like Bubba Watson, have a distinct advantage over righties on the majestic course (winning six of the last 12 titles), the golfing gods still wreak havoc, and Jordan Spieth is going to be a star for years to come. The 20-year-old took a valiant run at Tiger Woods' record as the youngest Masters' winner, but like his shot into Rae's Creek on hole 12, fell just short.

One happy brand
However, Under Armour (NYSE: UA  ) , which is also young and positioned for a bright future, had to relish the moment. Spieth, its pitchman, got tons of exposure for the sportswear brand. The up and comer, which sold $2.3 billion in goods in 2013, watched the Under Armour-clad Spieth, logoed from head to foot, take center stage as he and Watson made their final romp around Augusta National.

At first, Spieth looked like the better man, but eventually "Amen Corner" wore him down. After the Green Jacket fell from grasp, he still left many predicting that he is destined to become the Tour's next big star.

UA, like Spieth, positioned for the long haul
With much less fanfare than Nike's  (NYSE: NKE  ) signing of Tiger Woods or Rory McIlroy, Under Armour inked Spieth to a sponsorship deal in January 2013. Spieth may not generate the same excitement as Nike's Woods, but he's only 20, but seems poised for a long and solid -- if not spectacular career. The same could be said for upstart Under Armour. Who knows if the brand will ever reach the rarefied air and longevity of Nike, but it definitely looks ready to steal market share from Nike and Adidas.

Breaking out
Like Spieth, 2013 was a good year for Under Armour. Revenues increased 27% from $1.8 billion to $2.3 billion. Growth may slow a bit in 2014, but should still top the 20% rate. Apparel makes up a bulk of its sales (76%). In fact, in golf, the company only does apparel, not shoes or equipment. That may have been one reason it landed Spieth who wasn't forced to switch clubs. Footwear generates 13% of net sales, while accessories net 9%. All three categories grew over 25% in 2013.

Also, earnings per share have increased 31.7% (24% in 2013), while revenues have grown at 26.3% per year for the previous five years.

Leading the market
Currently, Under Armour leads the portion of the sportswear market known as synthetic performance wear with 60% share. The entire market is estimated to bring in $3 billion in overall sales. UA basically created this market with the invention of its compression wear. The performance wear geared toward use in differing temperatures (Heatgear, Coldgear, Allseasongear) commands higher margins due to its moisture-repelling technology.

Room to grow
Under Armour has lots of room to expand overseas. Currently, it generates about 6% of sales internationally, but plans to grow that to 12% by 2016. Revenue has climbed a little faster (around 27.8%) across the globe than in the U.S. As a point of comparison, Nike does about 57% in the U.S. and 43% internationally. Keep an eye on international sales as a percentage of overall revenues to gauge how UA's expansion is progressing.

Foolish takeaway
With a P/E ratio significantly ahead of peers Under Armour is a bit pricey, but if growth continues as expected, only slightly. The company is definitely worth holding if you already own it and buying if it dips on current market struggles. But if you're in it for the long haul (five years or more) don't be afraid to pull the trigger now. You're looking at lots of upside on this one and little risk with major international growth ahead.

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