Source: http://investor.underarmour.com/releasedetail.cfm?ReleaseID=1065604
In a recent article I discussed that Foot Locker Inc. was one of the few sneaker stores that has the ability to offset what is occurring as big brands begin to act more like Warby Parker as opposed to … well big brands who traditionally wholesale.
Footaction Takes The Lead For Foot Locker In Private Label Push | Business
In the above post I discussed that Foot Locker and its derivatives already have private labels and they are working with PENSOLE to deliver limited edition footwear. This is going to be a necessity as every brand is looking at ways to connect to their customer directly. Under Armour’s largest growth is through their own doors:
- Revenue to wholesale customers increased 1 percent to $779 million and direct-to-consumer revenue was up 17 percent to $352 million. The direct-to-consumer business represented 30 percent of global revenue in the quarter.
When a billion dollar company begins to act and function like a startup, shareholders are always happy as it means that the dividends should increase. The natural worry of traditional retail analysts is that brands make a mistake by reducing the number of doors they are sold in. Kevin Plank delivered a lot of information on the direction of the company and kept the guidance as projected during the February conference call. In my projections for 2018 I stated that if Under Armour began to develop better storytelling, seems simplistic, they would begin to see benefits. Storytelling isn’t only in marketing, it’s also in merchandising and the number of doors the story is being told. I haven’t checked the stock on UA, but I’m willing to bet that the shares have gone up on today’s news. Not because of the 6% growth overall, but because the brand is able to deliver on the promise of growth due to their recognized ability to reach the customer directly, and their international growth.
How Will Your Favorite Sneaker Brand Perform in 2018? | Under Armour ($UA) ($UAA)
Our Wholesale business was up 1% to $779 million, driven by strong results in our
International business. This was tempered by a slight decline in North America, which was a
better-than-expected result, due primarily to the factors Patrik noted.
Direct-to-Consumer revenue grew 17% to $352 million driven by continued strong results
in our international and global eCommerce businesses. DTC was 30% of total global
revenue in the quarter.
Licensing was up 9% to $26 million primarily driven by growth in our youth and Japanese
businesses.
