Under Armour’s Good, Bad And Ugly

Under Armour announced good news today. Revenue grew, margin grew, and inventory levels were down. That’s normally a trifecta of responsible health. But underneath the covers Under Armour still has significant work to do. About the good: Revenue was up slightly, driven by international strength and the wholesale business. Simultaneously, inventory was down 24%, a trend that is in stark contrast to previous year-over-year growth. And finally, Under Armour was one of the few brands to see success in the performance sector of shoes, with its HOVR platform driving footwear revenue up 8%. But Under Armour’s headwinds remain substantial. The company’s commitment to performance may pay benefits in five years. But Under Armour is not going to grow in the near future in its women’s business – or its men’s business – relying on performance. Sports Fashion and athleisure rule the day. Throw in the continued commoditization of performance garments, led by the growth of private label (like Dick’s) or mass-market players (Target, Old Navy), and growth for a higher-priced brand will be tough. Read more at Forbes.