Here's How Under Armour Is Growing in Footwear

Athletic apparel, footwear, and accessories manufacturer Under Armour has done well in recent years to expand its product portfolio. The company offers products and services for just about every major sport and now even has a foothold in the growing wearable-fitness-technology category with its Armour39 line.

However, in order for the company to realistically compete with a global juggernaut like Nike , Under Armour needs to do much better in the lucrative footwear category. For such a large market, Under Armour has a very small presence in footwear currently, but that may be about to change.

Source: Under Armour.

Running away with it
The standout footwear category for Under Armour recently has been the running segment. According to retail analyst Matt Powell at SportsOneSource, the company grew its running sales by a staggering 54% in the month of May and ended up controlling 3.4% of the running-footwear market.

While the growth is impressive, Under Armour still has a long way to go to catch Nike in running. The sneaker giant grew its running shoe sales by 7% in May but owned a whopping 59.5% of the running-footwear market.

For footwear in general, the results are similar. For the month of May, Under Armour grew its total sneaker sales by 30% and controlled 2.7% of the total shoe market, up from 2.3% in April. Meanwhile, Nike controlled 58.9% of the market, which marks the highest market share ever recorded for the company in the month of May.

Setting the bar low
SportsOneSource's Powell attributed Under Armour's recent success to drastically lower price points versus the competition. The average price point for an Under Armour running shoe in May was $55, which was significantly lower than Nike's average price point of $71.50.

This highlights two things. The first is obviously that Nike, as a far more established name in footwear, has strong pricing power when it comes to sneakers. However, the second is that Under Armour management is choosing to make inroads in the running segment by getting its products into the hands of consumers by any means necessary, including aggressive sales tactics.

The sharp focus on the running-footwear segment has cost Under Armour significantly in other segments, most notably basketball. The company's basketball sneaker sales dropped by 26% in May.

If we look at the most recent high-profile sneaker release by Under Armour, the focus has clearly been on running. The company's SpeedForm Apollo running shoe debuted in January under the "This Is What Fast Feels Like" marketing campaign to a mostly positive reception. It was named "Best Debut" in the 2014 Spring Shoe Guide by Runner's World.

Matt Mirchin, executive vice president of marketing, explained in the company's press release for the new product: "SpeedForm Apollo is the shoe we were born to make. We pushed industry boundaries to deliver breakthrough innovation in footwear that provides performance that runners need."

Source: Under Armour.

Bottom line
Under Armour is still very much the underdog in the athletic-footwear category. While Nike is busy taking its brand to record highs, no doubt helped by its massive presence at The World Cup right now, Under Armour management is still aggressively trying to get its products into the hands of consumers.

As long as the reception for Under Armour's footwear products remains positive and translates into increased customer adoption, the sales tactics should prove beneficial to the company and its shareholders in the long term.

With Under Armour up more than 1,000% since the Great Recession, can it still be your next multibagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


The article Here's How Under Armour Is Growing in Footwear originally appeared on

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.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story