Under armour financial report 2017

Abstract

In this article, Under Armour will be evaluated through finical analyst. Under Armour is a

sports clothing line placed in the retail market. A company overview will provide the company

history and current market. In this section using SWOT and PESTLE analyst will provide well

rounded examination as the company in the economy and functionality. Financial overview and

ratios will provide tables and calculated ratios that relate to liquidity, asset management, debt

management and profitability. To evaluate Under Armour as it’s a company furthermore, a stock

analysis will be provided. In this section, stock analysis calculations compared to the retail

industry and Nike will provide data comparatively. Finally, comparative analysis will provide an

interpolation of the stock data. An example of $100,000 investment will be used as a method to

express investment options with Under Armour. In conclusion, using data and research Under

Armour will be evaluated and analyzed.

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Table of Contents

Abstract ............................................................................................................................... 3

Under Armour: A Financial Analysis .................................................................................. 7

Company Overview ............................................................................................................ 7

History............................................................................................................................. 7

Current Market ................................................................................................................ 7

Strategic Analysis................................................................................................................ 8

SWOT ............................................................................................................................. 8

PESTLE .......................................................................................................................... 9

Strategic Summary ........................................................................................................ 10

Financial Statements and Ratios ........................................................................................11

Liquidity .........................................................................................................................11

Asset Management .........................................................................................................11

Debt Management ......................................................................................................... 12

Profitability ................................................................................................................... 13

Financial Statement Overview ...................................................................................... 13

Stock Analysis ................................................................................................................... 14

Pricing ........................................................................................................................... 14

Stock Performance ........................................................................................................ 15

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Valuation Forecast ......................................................................................................... 16

Stock Analysis Summary .............................................................................................. 16

Comparative Analysis ....................................................................................................... 18

Overall Company Performance..................................................................................... 18

Overall Industry Performance ....................................................................................... 18

Overall Market Performance......................................................................................... 19

Example Investment...................................................................................................... 19

Conclusion ........................................................................................................................ 20

References ......................................................................................................................... 22

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Table of Tables

Table 1 - Liquidity Ratios .............................................................. Error! Bookmark not defined.

Table 2 - Asset Management .......................................................... Error! Bookmark not defined.

Table 3 - Debt Management ........................................................... Error! Bookmark not defined.

Table 4 - Profitability ..................................................................... Error! Bookmark not defined.

Table of Figures

Figure 1 – Under Armour 5-Year Stock Performance (gurufocus.com,2017) .... Error! Bookmark

not defined.

Figure 2-NASDAQ 5 Year Perforamnce (marketwatch.com, 2017) ........... Error! Bookmark not

defined.

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Under Armour: A Financial Analysis

This section will provide a general introduction to the company Under Armour (UA)

history and current market position. SWOT and PESTIL analyst will be used to provide detailed

information regarding UA stability and value as a company.

Company Overview

UA is an athletic appeal company, providing products with innovative technology.

Focused on providing quality items that keep athletics comfortable for the duration of activity.

UA provides a range of products for men, women, and youth in the form of tops, bottoms, shoes,

and accessories. UA mission stated on website is “To make all athletes better through passion,

design and the relentless pursuit of innovation” (Under Armor, 2017).

History

UA was founded in 1996 by CEO Kevin Plank. The company is currently based in

Baltimore, Maryland (Hellman, 2015). Plank started UA business with developing a compression

T-shirt for athletes. The T-shirt was engineered with technology to limit moisture retention and

keep athletes cool and comfortable even in hot conditions (Under Armor, 2017). UA is a

growing business, developing new products and technology in apparel and footwear.

Current Market

UA went public in November 2006, pushing the company to grow and gain stock value.

The current market for UA is growing overseas and focused on capturing new markets

internationally. UA products are marketed towards professional and college athletes. UA was

ranked #5 sports brands by Forbes magazine (Soni, 2014). As UA continues to grow it gathers

more ground against its competitors Nike and Adidas.

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Company Summary

UA is a long-term company with steady growth since beginning in 1996. UA continues to

focus towards potential business opportunities for growth. To understand UA company using a

strategic analysis will follow. Using a SWOT and PESTLE analyst will support UA goals and

objectives.

Strategic Analysis

Strengths, Weaknesses, Opportunities, Threats (SWOT) and Political, Economic, Social,

Technological, Legal, Environmental (PESTLE) analysis will be used in the following section.

Using this format will show a rounded exploration of UA role in the market. UA is a growing

company and examining SWOT and PESTLE to show its value.

SWOT

UA is a strong and growing company, showing a 20% annual profit increase. UA is #2 in

domestic sportswear sales, wholesale contracts with large retailers such as Dicks Sporting Goods

contributed to 3.1 billion dollars in 2014. The innovative technology used in UA clothing is the

foundation of the company and one of its strongest attributes (Hellman, 2015).

Brand image and trendy advertising is an additional example of UA strengths. Celebrity

and athlete endorsement create a “cool’’ marketing image for the brand. Endorsement contracts

with Tom Brady, Stephan Curry and Jordan Spieth to name popular athletes that endorse UA

(Hellman, 2015).

Some of the weaknesses UA faced are the cost of doing business and heavy investment

spending. Obtaining celebrity and athletic endorsement is positive for the brand image, however

the contracts are expensive. Product innovation and supply chain upgrades for example cost the

company high dollars. UA is also focused on overseas expansion. Although these investments are

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for the future growth of the company, it can cause low dividend payout and this may not be

appealing to investors (Hellman, 2015). UA recently purchases MyFitnessPal, Endomondo and

MapMyFitness costing the business a combined $710 million dollars. Although this is a large

investment, the benefits purchase these fitness apps can add to market research and product

development (Hellman, 2015).

UA newest product is footwear and this has created room for growth and opportunity. In

hopes of international growth footwear might be a positive path to take. UA interest in marking

products for golf, tennis, basketball, and soccer may give them an advantage over some of the

competitors. Wholesale distribution to Foot Locker and Finish Line could make huge strives for

UA (Hellman, 2015).

UA has a strong hold on domestic distribution and are focusing on expanding overseas.

Opening factory outlets domestically and internationally to gain market share is a priority. UA

has also acted in hiring international leadership teams and market consultants in regions to have

a better understanding of the markets (Hellman, 2015).

The industry of fashion and athletic clothing is competitive, with that comes threats. UA

top four competitors are Nike, ESPN, Adidas, and Sky Sports (Soni, 2014). Nike being the main

competitor, UA focuses on brand image. Nike being viewed as “corporate”, UA makes efforts to

be the opposite of this (Hellman, 2015). UA has also made poor choices with athlete

endorsement. Trying to capture up and coming altheas they run a risk of failure with popularity.

A shift to focus on proven, household names athletes runs a lower risk (Hellman, 2015).

PESTLE

PESTLE is a acronine for political, economic, social, technology, legal and environment.

This is a way to evaluate these areas of UA. UA primary distribution is domes