The Rising Influence of Rising Affluence

[DewDiligence]

UA lays out global strategy:

http://online.wsj.com/article/SB10001424127887324866904578515513925827852.html

Can niche athletic-apparel maker Under Armour Inc. garner the same global recognition as Nike Inc. and Adidas AG?

…Strong demand for athletic gear in North America in recent years has helped lift results for Under Armour and rivals Nike and Adidas. Under Armour's total sales leapt 25% in 2012 to $1.83 billion. But only 6% of that revenue was generated outside of North America. By comparison, Nike generates about 59% of its sales outside the region, while Adidas, based in Germany, gets about 60% of its sales outside its home market of Europe.

At this week's meeting in Baltimore, Under Armour's first such event in two years, analysts are hopeful the company will lay out a more comprehensive plan to develop key European markets, such as Germany and the U.K., as well as Latin America…
Some analysts have speculated that Under Armour's "coming out" party on the international stage will be in Latin America, timed around the 2016 Summer Olympics to be held in Brazil.

…Under Armour's shares have already soared 28% this year, and are currently trading at a price-to-earnings ratio of 54.3, far above Nike and Adidas. Some see potential upside to the company's 2013 targets, though Citi's Ms. McShane is among those that argue shares are fairly valued as the long-term opportunities Under Armour is expected to outline are already priced into the stock.

With such a lofty valuation, UA is not the “poor man’s NKE” that one might expect it to be.