Under Armour Drives Growth With Operational Excellence & Innovation

Under Armour, Inc. UAA is positioning itself for continued growth and market differentiation by focusing on premium product offerings, operational efficiency and global expansion. The brand is refining its core products, enhancing its direct-to-consumer (DTC) channels, and strengthening customer loyalty through its growing membership program. These strategies are not only fostering deeper engagement with consumers but also expanding revenue opportunities.The company is building on strong partnerships with athletes and leveraging data-driven marketing to elevate its global presence and competitive positioning. Looking to fiscal 2025, Under Armour’s commitment to premium products, effective cost management and an expanding customer base positions it well for sustained profitability and brand growth in the dynamic athletic apparel market.UAA Stock Past Six-Month Performance Image Source: Zacks Investment Research UAA’s Strategic Transformation & Focus on Premium ProductsUnder Armour is concentrating on premium products, targeted promotions and innovative customer engagement strategies to seize opportunities in the competitive athletic apparel sector. The company is heavily investing in brand-building marketing efforts, committing around $40 million to enhance visibility and loyalty across the Americas, EMEA and Asia-Pacific regions.To streamline operations, UAA is simplifying its product line, reducing SKU complexity and prioritizing high-quality offerings. This includes adopting a more selective promotional approach at its Factory House outlets, wherein certain key items will be excluded from store-wide discounts. This strategy aims to boost profitability while maintaining the exclusivity of premium products.During its Dec. 12 investor meeting, Under Armour laid out its vision for continued growth, reaffirming its fiscal 2025 outlook and ambition to become a leading global sports brand. The company emphasized product innovation, operational efficiency and regional market strategies as the key drivers of long-term value for shareholders, with a focus on athlete-driven products and consumer engagement to boost brand loyalty.In terms of regional strategy, Under Armour is targeting young athletes and team sports in the Americas. In the EMEA region, the company is concentrating on premium distribution and expansion in key markets such as France, Germany and Spain. Meanwhile, in the Asia-Pacific region, Under Armour is focused on bolstering brand equity and generating high-quality revenues, utilizing global marketing campaigns to raise brand awareness.Under Armour’s Global Presence & E-Commerce DevelopmentUAA is expanding its international footprint with high-profile athlete endorsements, including Stephen Curry’s promotional efforts in China and the upcoming launch of De’Aaron Fox’s signature shoe. These collaborations significantly enhance brand visibility, particularly among younger consumers, strengthening Under Armour’s position in the global sportswear market.The company is also focusing on growth of its DTC channels, including the 24,000-square-foot flagship store at its new headquarters in Baltimore, which opened on Nov. 21. This store offers a curated selection of products and a premium retail experience, setting a standard for future stores. Moreover, Under Armour is reducing discounting, which has led to a notable increase in full-price e-commerce sales, now accounting for 50% of online revenues compared with just 30% a year ago. DTC sales saw a 7.6% year-over-year increase to $550.3 million in the second quarter of fiscal 2025.UAA’s loyalty program is growing rapidly, with nearly 13 million members in the United States and 28 million globally. In the fiscal second quarter, the company added 6 million members to its ua.com platform. Active members now contribute to approximately 50% of U.S. DTC revenues, generating about 50% more revenue per customer and nearly doubling the repurchase rate compared to non-members.UAA’s Margin Gains, Cost Efficiency & Strong FY25 OutlookUnder Armour showcased significant progress in margin improvement and cost efficiency in the fiscal second quarter, with a 200-basis-point increase in the gross margin to 49.8%. This growth was driven by reduced promotional activities, optimized product costs and a favorable channel mix resulting from a lower reliance on off-price sales. Supply-chain benefits, including lower freight and product costs, bolstered margins. The company also achieved a 13% year-over-year reduction in adjusted SG&A expenses to $530.1 million, aided by lower marketing expenses, headcount reductions and insurance recovery for legal fees. These actions highlight Under Armour's disciplined approach to cost management while driving operational efficiency.UAA expects robust growth for fiscal 2025. It projects a gross margin increase of 125-150 basis points, fueled by lower promotional activity in DTC channels and favorable product costs. Adjusted SG&A expenses are anticipated to decrease in the low to mid-single-digit percentage. The company foresees a gross margin rise of 150-175 basis points in the third quarter of fiscal 2025, driven by enhanced supply-chain efficiencies, favorable foreign exchange and reduced discounting.ConclusionInvestors may find Under Armour appealing due to its focus on premium products, operational efficiency and global expansion. The company’s emphasis on customer loyalty, streamlined operations and reduced reliance on discounting enhances profitability. With strong athlete partnerships and growth in direct-to-consumer channels, UAA is positioned for sustained growth. The company’s commitment to innovation and regional market strategies supports long-term value creation. Under Armour’s outlook for fiscal 2025 highlights its potential for continued success in the athletic apparel market. In the past six months, the Zacks Rank #1 (Strong Buy) stock has gained 3.3%, outpacing the Zacks Textile – Apparel industry’s 4.2% decline.Other Key PicksSome other top-ranked stocks are The Gap, Inc. GAP, Abercrombie & Fitch Co. ANF and Deckers Outdoor Corporation DECK.Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP delivered a trailing four-quarter average earnings surprise of 101.2%.Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently sports a Zacks Rank of 1.The Zacks Consensus Estimate for ANF’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15%, respectively, from the fiscal 2024 reported levels. ANF delivered a trailing four-quarter average earnings surprise of 14.8%.Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It carries a Zacks Rank of 2 at present.The Zacks Consensus Estimate for DECK’s fiscal 2024 earnings and sales indicates growth of 13% and 13.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 41.1%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abercrombie & Fitch Company (ANF): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report Under Armour, Inc. 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