After being a growth story darling for several years, Under Armour (UAA) has really taken it on the chin the last two years. Growth has slowed dramatically from its once recurring 20%+ levels and the company is struggling to create products that are competitive in the highly fickle athletic apparel market.
While some believe Under Armour’s best days are behind it, I’m hesitant to make such a claim. What doesn’t kill you can make you stronger. It was just a year ago that everybody was talking about the growth implosion of Nike (NKE) and here we are a year later and the stock is up 49%. In 2015, people wrote about the death of Adidas (OTCQX:ADDYY). Two years later, that narrative had flipped entirely.
Under Armour (UA) has several bright spots. And though the company is restructuring and trying to find a path forward, there are several things to be optimistic about, including strong direct-to-consumer sales figures, strong international growth, and a founder/CEO who is fully committed to winning long-term. I sold my Under Armour position in early 2016 and got lucky on timing (needed the cash), but will continue to follow the company’s turnaround as I consider a new investment in the company.
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