Under Armour has been aggressively investing in high-profile endorsement deals and building up its women’s business in a bid to chip away at Nike’s athletic empire — and the strategy appears to be working.
Under Armour’s footwear and apparel sales jumped 29% in the third quarter from a year ago and net income grew 22% to $US89.1 million, the company reported Thursday.
The Baltimore-based company says it’s now on track to bring in a total of $US3.03 billion in sales in 2014, which would be a 30% jump over 2013.
Apparel sales rose 26% to $US704.6 million in the third quarter from a year ago, while footwear sales leapt 50% and accessories sales were up 32%. Shares of Under Armour were down early Thursday, however, on concerns over a slight deceleration in apparel sales growth from a 35% pace in the previous period.
But footwear sales beat expectations and the company is still successfully gaining market share.
Best known for its performance wear, Under Armour has grown rapidly over the last 18 years. When it was founded in 1996, it had $US17,000 in revenue. This year, it’s expected to bring in $US3.03 billion.
That’s still only a fraction of Nike’s sales, which are expected to total $US28 billion this year.
But Under Armour CEO Kevin Plank is confident his company can become a more formidable opponent to Nike.
That’s why the company has been increasing its investments in endorsement deals, an area where Nike has always excelled.
Under Armour recently signed deals with supermodel Gisele Bundchen and ballerina Misty Copeland shortly after launching its largest-ever global women’s marketing campaign. And earlier this year, Under Armour scored the biggest equipment deal in college sports.
The company recently lost a bid for basketball star Kevin Durant to Nike, but Under Armour CEO Kevin Plank said he wasn’t deterred by the failure.
“We’re going to grow 20%-plus next year with or without the deal,” Plank told Bloomberg TV’s Stephanie Ruhle. “We wanted to send a message to every athletic director, to every president of every team club, to every league commissioner, that if you have a deal, there’s no deal too big for us.”