Under Armour (NYSE:UA) (NYSE:UAA) turned 20 years old last year. In that relatively short time, the sports apparel specialist has grown from selling a single product in one market to passing $4.8 billion in revenue while sponsoring many of the most famous athletes in the world.

Below, we'll look at a few aspects of this successful business that investors might not know about.

A pickup game of basketball.

Image source: Getty Images.

The vast majority of sales are in the U.S.

Under Armour counts Nike (NYSE:NKE) as one of its biggest rivals. But while the two companies sell a similar range of products and compete over professional athletic sponsorships, they are vastly different when it comes to global reach. Under Armour last year generated 15% of its sales from markets outside of the United States. For Nike, that figure was 53%.

CEO Kevin Plank and his executive team aspire to build Under Armour into a global powerhouse over time, but it won't be easy. In addition to the logistical challenges involved in establishing a defensible market presence in dozens of countries, it's expensive to maintain a worldwide brand. Nike spent $3.3 billion on marketing last year or about 70% of Under Armour's entire revenue base.

A problem with retailers

Under Armour's direct-to-consumer business is enjoying healthy growth, but its wholesale segment is struggling. The pace of sales gains slowed through 2016, with an especially painful drop during the holiday quarter. That's when Under Armour saw its overall revenue growth pace plunge to 12% after rising by 20% or more in each of the last 26 straight quarters. For the full year, the company counted a 19% gain in the wholesale segment and a 27% spike in the direct-to-consumer division.

Like Nike, Under Armour plans to speed up investments in this sales channel so that it isn't so exposed to slowing customer traffic at sports retailers and the price cuts that come with the subsequent bloated inventory levels.

The shoe business is tiny

Executives see footwear as a huge potential growth market, and that optimism is well supported by the numbers. The segment logged a 49% sales spike last year, compared to 15% for the apparel business.

Yet Under Armour still generates less than a quarter of its revenue from footwear sales, compared to over 60% for Nike. That gap suggests the company has plenty of room to grow from its current $1 billion mark. It also points to rising pressure on profit margin.

UA Gross Profit Margin (TTM) Chart

UA Gross Profit Margin (TTM) data by YCharts.

Footwear typically involves lower profitability than apparel, and so as Under Armour's sales mix tilts in that direction, earnings growth will suffer. Last year, for example, the expanding footwear business pushed gross margin down by 0.7 percentage points.

Sinking profit outlook

Plank and his team are predicting another year of gross margin declines in 2017 as the footwear and international segments outgrow the U.S. apparel business. The company is bracing for a difficult competitive battle in its core market as major sporting goods customers struggle to keep inventory moving due to sluggish customer traffic. Major investment priorities include branding, building out the direct-to-consumer infrastructure, and revamping Under Armour's innovation and marketing strategy so that its products sit more firmly on the premium side of the industry.

Those initiatives will require lots of resources that will crimp results at least through the current year. The company is targeting operating income of just $320 million in 2017, compared to over $400 million in each of the last two fiscal years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.