Under Armour's International Expansion Is Just Beginning

Despite numerous new deals and store openings, Under Armour remains in the early stages of international expansion.

Jul 11, 2014 at 1:00PM

Under Armour's NYC store. Source: Under Armour.

Athletic apparel, footwear, and accessories manufacturer Under Armour (NYSE:UA) has had great success growing rapidly in North American markets, and the brand is now recognized as a premiere athletic label by consumers. The next logical step for the Baltimore-based company is to expand its international footprint and become a true global competitor to Nike (NYSE:NKE).

All the company's latest announcements indicate that Under Armour management is fully committed to international expansion and is already well on its way to ensuring future growth in this regard. The brand's recent expansion into Panama should increase brand awareness among international consumers and allow the company to better target consumers in the surrounding areas.

On June 26, Under Armour management unveiled its newest retail space on location in Panama City. The store is located in the Multiplaza Pacific Mall, one of the city's premiere shopping centers, and features Under Armour's broad selection of signature apparel, footwear, and accessories.

Charlie Maurath, president of Under Armour's international division, explained in the company's statement:

Introducing the brand to new markets through authentic retail environments allows us to communicate a powerful and consistent brand story as we continue to expand globally. Athletes in Panama now have the opportunity to experience first-hand the brand's passion for innovation and story-telling.

The Panama City store is Under Armour's first retail location in Central America. Since the new store will mark many consumers' first experience with the Under Armour brand, it is important that the store's atmosphere properly convey the essence of the sports brand to consumers.

To this end, management seems to have hearkened back to the company's early days of branding in the United States. The new store focuses heavily on Under Armour's dedication to enhancing athlete performance and the brand's "signature raw and gritty ethos."

As soon as consumers walk into the store, they are greeted with a large LED screen that displays some of the company's successful advertising campaigns and reinforces the brand's athlete-centric focus.

If the company can find success in Panama, the Under Armour brand stands to gain many new supporters. Also, the new store could serve as a launching point for additional brand expansion in the future.

International is still largely untapped
Under Armour has made progress expanding into new geographic markets recently. In the past six months alone, the company has also entered Brazil, Chile, the Philippines, and Singapore.

However, international still only represents approximately 10% of revenue for Under Armour. The segment generated $59 million in the first quarter of fiscal 2014 compared to the North American segment, which generated $583 million.

When compared to global footwear behemoth Nike, Under Armour is still way underexposed to international markets. Nike derives more than 50% of total Nike brand revenue from international. In fiscal 2014, which ended in May, Nike generated $27.8 billion in total revenue. For comparison, Under Armour generated just $2.3 billion in fiscal 2013.


Source: Under Armour.

Bottom line
Despite numerous new store openings across the world, Under Armour is still in the early stages of international expansion, especially when compared to industry competitor Nike. As long as management can properly advertise the sports brand to new consumers in foreign markets, the powerful momentum behind Under Armour seems set to continue.

While retailers like Nike continue to manufacture in China, a new business in the U.S. could change all that.
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made In China" for good. Click here!

Philip Saglimbeni owns shares of Under Armour. The Motley Fool recommends and 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers