In terms of growth, there may not be a better performing company in the retail segment than Under Armour (UAA -1.04%). The maker of athletic apparel, footwear, and accessories has excelled on numerous fronts in recent years. However, the company's robust growth is derived directly from the immense strength of the Under Armour brand itself, which has proven more universally appealing than the brands of industry rivals like Lululemon Athletica (LULU 1.09%).

Brand strength
Social media can be an effective way to gauge brand popularity. In the case of Under Armour versus Lululemon, the comparison is especially valuable because the companies are approximately the same size; Under Armour's market capitalization is $9.2 billion and Lululemon's market capitalization is $8.5 billion.

Despite being roughly the same size, Under Armour has more than three times the amount of fans on Facebook that Lululemon has. The former has more than 2.7 million fans, while the latter has just and 891,000.

The results are somewhat expected, as Under Armour has a more diverse product lineup that appeals to a much broader audience. While the company's brand originally catered primarily to male athletes in sports like football, Under Armour management has made great strides in targeting female athletes as well as youth in recent years.

Under Armour has embarked on a campaign called "What's Beautiful," which has targeted female athletes through various print, television, and social-media advertisements over the last year. The strategy focused on consumer engagement and allowed fans to post their workout routines and progress online. The company has also introduced new female product lines and redesigned a number of stores with female shoppers in mind.

Currently, growth in Under Armour's female apparel is outpacing the company's overall growth and indicates that management's efforts have been very successful. Chief executive officer Kevin Plank is anticipating that Under Armour's female businesses will make up $1 billion in revenue by 2016.

The diversification strategy has been so successful that Plank explained during a recent investor conference call, "Women's has the potential to be larger than men's."

On the other hand, Lululemon is still a company that appeals primarily to women. Despite management's efforts to broaden the company's audience, a large part of Lululemon's business is still derived from female consumers since the company caters directly to yoga patrons. According to a 2012 study by Yoga Journal, 82% of people who practice yoga are female. In order for Lululemon to continue growing at substantial levels, the company needs to introduce more diversity in its product lineup.

Superior growth
Not surprisingly, Under Armour is outgrowing all of its major peers in terms of both revenue and earnings-per-share growth. The following is a breakdown of the company's projected growth in 2014 compared with that of Lululemon and industry stalwart Nike (NKE 0.38%)




Under Armour

Revenue Growth 2014




EPS Growth 2014




*Nike's fiscal year ends in May

Under Armour's projected revenue growth rate of 21.9% and earnings-per-share growth of 23.6% lead those of both Lululemon and Nike. However, Lululemon is not too far behind, while Nike is still growing at very solid levels for a company with a market capitalization approaching $70 billion.

The industry-leading growth of Under Armour does come at a steep price for investors though. The company's forward P/E of 41.8 is extremely elevated compared to Lululemon's forward P/E of 24.1 and Nike's 21.8.

Future growth
There is no doubt that on a purely numerical basis, Under Armour is not the best bargain. While the company is projected to lead its competitors next year with regard to both revenue and EPS growth, Lululemon is not too far behind and offers a much cheaper valuation. Nike, on the other hand, remains the cheapest by far and also pays a nice dividend. Nike is also currently yielding 1.2%.

However, Under Armour has the most room for growth and is the best long-term growth play. Nike, of course, is already a global titan and Lululemon has not yet demonstrated it can properly diversify its product lineup to attract new types of consumers.

Under Armour has the brand strength and management team to make the company a worldwide leader in athletic apparel and footwear. All that is necessary for the company to succeed is to translate its immense brand strength into other product segments and geographic areas. Luckily, management at Under Armour has already shown that it is capable of doing this. Despite a fantastic 2013, Under Armour should still shine in 2014.