1 Way Under Armour Is Securing Its Future
Regardless of what you think of Under Armour's athletic gear, you've got to admit the company's growth since it was founded in 1996 has been nothing short of astounding.
CEO Kevin Plank has taken Under Armour from a tiny niche business he ran out of his grandmother's basement back then all the way up to a burgeoning enterprise that last year boasted more than $1.8 billion in revenue.
In fact, Under Armour's impressive second-quarter results last month marked its 13th consecutive quarter of achieving at least 20% top-line growth, a streak management has repeatedly made clear they have no intention of breaking anytime soon. And considering that 94% of the company's revenue last quarter was derived here in the U.S., it's obvious Under Armour has plenty of room to expand.
But that doesn't mean Under Armour's enormous competitors in Nike or Adidas are going to give up market share so easily -- a concern made clear in recent months after Under Armour was forced to file a lawsuit against Nike for trademark infringement, to which the more established global powerhouse later responded in a borderline condescending fashion.
One demographic to rule them all
But there's still one way Under Armour is quietly, effectively fighting to take market share to ensure it will survive and thrive as it grows over the long term, even in the face of opponents as formidable as Nike.
So what is it?
In a word: youth.
Everywhere you look these days, children and young adults are increasingly wearing more Under Armour gear, showing that the business is finally shedding its image as a brand for only hard-core athletes.
As a matter of fact, in a search for a new pair of kindergarten gym shoes a few weeks ago, I was pleasantly surprised when my five-year-old daughter came home to unveil a brand-new pair of pink Under Armour sneakers -- absent any outside influence from her dad, who so happens to be a proud Under Armour shareholder.
And it's not just younger children Under Armour's winning over, either.
Take a digital stroll through Under Armour's Facebook page, for instance, and you'll see pictures from the Under Armour Elite 24 high school basketball game a few days ago:
Scroll down a little further, and you'll see shots promoting the recent Under Armour-sponsored high school All-America baseball game a few days ago as well, each sporting the caption "The best jerseys in the game are ready for the best high school players on the planet."
So what does this all add up to?
To paraphrase hockey great Wayne Gretzky, Under Armour is skating to where the money is going, not to where it has been.
By winning over younger consumers today, you can bet Under Armour knows all too well those kids will be more than willing not only to spend their own money on the brand they love down the road, but will also be more likely to pass that brand loyalty onto their children, then to their children's children, and... well, you see where this is going.
In the end, that long-term vision is exactly the kind of focus we Foolish investors love to see and one of many reasons I plan on holding my own shares of Under Armour for decades to come.
Of course, while Under Armour has yet to begin its international expansion in earnest, there are plenty of other American businesses which are already raking it in overseas. If you're interested in reading more about profiting from our increasingly global economy by investing in your own backyard, The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.
The article 1 Way Under Armour Is Securing Its Future originally appeared on Fool.com.Fool contributor Steve Symington owns shares of Under Armour. The Motley Fool recommends and owns shares of Facebook, 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.
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