ACCT 6015 Project 1 S

Competitors in the industry can wreak havoc on the bottom line for a company. With rivals, a price competition usually ensues, which benefits the customers but hurts the competing businesses that share a common strategy. In reviewing rival sellers, many competitors exist within the sports apparel and footwear industry, but most of them are unable to compete with the industry giants, Nike and Adidas. They are well seated in the industry and their sales reveal this ultimate strength, however, Under Armour is putting pressure on these mammoths. In 2015, global sales of sports clothing and footwear equated to $250 billion, of which Nike grabbed $30.6 billion, Adidas held in its grasp $18.8 billion and Under Armour had a much smaller piece of the pie, at $3.9 billion globally. In reviewing these numbers, it looks like Under Armour is really subpar to the industry giants, but this is not exactly the case. Under Armour in the past couple of

There were some significant differences in the two company’s statements. For example, Nike incurred a net loss of $60.6 million from their operating activities where as Under Armour experienced a $69.52 million gain. Another significant figure is the difference in the total cash dividends paid. Over the course of the year, Nike paid $412.9 million in cash dividends where as Under Armour paid no cash dividends during the year. However, when it came to the cash balance differences between 2008 and 2007, Nike increased its cash by $277.2 million where as Under Armour only increased its cash by $61.45 million.

Under Armour’s success transcends to its financial stability. Based Under Armour’s fourth quarter report, the apparel company expects 2016 net revenues of approximately $4.95 billion, representing growth of 25% over 2015 and 2016

Kevin Plank, the founder of Under Armour sports apparel line is a brilliant businessman. This former college football player started making work-out T-shirts from his grandmother’s basement; seventeen years later, the company is generating billions of dollars in revenue. Kevin Plank has created a brand that is more than just a fancy success story. The Under Armour’s mission in the sporting goods industry is to “make all athletes better through passion, design, and the relentless pursuit of innovation (Thompson, 2014, C-53).” This company is more than just a fancy success story. VIRO Analysis reported, Under Armour has been growing its revenue at a rate of +20% for 5 consecutive years, which is extremely impressive. The company’s financial

Despite Nike playing on the large stage of sport apparel and shoes, another company is rising to the occasion, Under Armour. With growing interest and production, Under Armour is taking the fast track to becoming a big rival to the other sports companies. This group has chosen to research and analyze the stock for Under Armour. Under Armour was chosen as this group’s investment because it had high PE ratio compared to the other companies researched. Research began on October 5th 2015, with a closing price of $101.86. This group invested $10,000 at $101.86 per share, which are approximately 98 shares.

Other clothing brands have the ability to start manufacturing athletic apparel to take away market share and diversify their portfolio. Thus, existing apparel companies could enter the performance apparel market if they decide to invest capital for advertising and building product demand. Under Armour has weak patent protection over its product; hence, there is a threat of different unexpected entrants who want to reiterate on their proven formula. Overall, the threat is less imperative to their continued success since other issues are more pertinent and likely.

Under Armour Inc. is a relatively new competitor in providing high quality and functional sporting goods. Under Armour Inc. encompasses footwear, apparel, and accessories for all types of sport enthusiasts. The company currently provides jobs to about 10,700 employees. However, they are still up and coming and are expected to create new opportunities and work for many others. Their main headquarter is located in Maryland, Baltimore. Though they operate all over North America, Asia, and certain countries of Europe. Throughout all their operations they mostly sell through retailers and whole sale. In addition, they do have factory outlets and their own “direct to consumer” channels located in North America. Under Armour has really been on the

Under Armour is in the Textile- Apparel Clothing industry, in the consumer goods sector. The market has been driven by economic recovery, new product offerings and a

I believe that bargaining power of customers and threat of new entrants are the three main key forces that have the potential to impact negatively Under Armour’s growth stability. Under Armour relies mainly on Dick’s Sporting Goods and The Sports Authority for more than 20% of its revenues and problems at these retailers could affect its growth pace. While Under Armour faces rigid competition from Adidas and Nike, they could also see the competition go up from other companies as it does not hold process or fabric patents. Furthermore, Under Armour’s hard core competitors, Nike and Adidas Group, are continuously coming up with new ideas in order to fight for that number one spot and to earn the customers’ loyalty to their brand.

Like any other company Under Armour needs to keep track of its finance’s. This is an Internal environmental factor for the company. Financially, Under Armour is consistently growing. Consumers propelled revenue growth from $5.3 million in 2000 to $263.4 million in 2005, which is an annual growth rate of 127% (Thompson, 2013,pg.250). Overall, from 2008 to 2012 they’ve seen an increase each year in cash and cash equivalents, working capital, total assets and total stockholders’ equity, as well as net

There is always an inherent risk when financial investments are made. According to financial analysts and investment professionals, there is no such thing as a sure bet, only varying levels of risk (Investor.gov, 2014). To alleviate that risk, a thorough process of research and analysis is done to screen potential investment opportunities. One such business that presents a low risk, yet high reward potential, is Under Armour.

Since the day Under Armour went public on November 18, 2005 with an initial public offering of $13 a share, which happened to be at a higher rate the company was anticipating. Under Armour has experienced great growth in the stock market when compared to the S&P 500, Dow Jones Industrial Average(DJIA) and its major competitor Nike. As of November 3, 2015 Under Armour’s stock closed at $96.40. Over the last year from November 4, 2013 – November 3, 2015 the stock has shown at 47% increase, compared to S&P 500 at

It is a newer company to a highly competitive industry like Nike and Adidas. Under Armour was founded in 1996 and started to offer footwear in 2006. Therefore, the company only has a limited market share in the market According to Trefis Team (2015), “In U.S., from where the company earns nearly 90% of its revenues, the Under Armour brand only has a 2.5% share of the market. Compared to this, Nike has nearly 25% of the global sports footwear market and 60% of the U.S. sports footwear market including the Jordan and Converse brands”. From the rate, we can know that the market share for Under Armour is very little compare to Nike. Some consumer might don’t even know this brand. However, there is high brand recognition for their competitors such as Adidas and Nike. Market share is crucial factor that impact to the business profitability. With a large portion of market share, the company can lead to greater business

Financial stability– UA has encountered positive income development for as long as 5 years with a compound yearly development rate of 19.3% (Under Armour 2014 Annual Report, P-5). The organisation's net income has dramatically multiplied from 2006 to 2013, with its net wage per share dramatically increasing (Thompson, C-45).

Under Armour is renowned for their self proclaimed label as an “underdog brand” when compared to their major competitors such as Nike and Adidas. Founder Kevin Plank, a former athlete, built the company from the ground up and transformed Under Armour from a athletic t-shirt company, into a company worth over $17 billion. Although Under Armour has secured the reputation as the second-biggest company in the United States, recent strategic decisions by top management may have hampered the security of their position.