While the core North American market is struggling, UA has demonstrated a powerful ability to grow its business overseas, providing a crucial pathway for future growth. (Q1 2018 sales: Asia +35%, EMEA +23%, Latin America +21%; p. 1, para. 4).
UA's roster of "megastars" like Tom Brady and Stephen Curry provides immense credibility and visibility, reinforcing its image as a true performance brand. (p. 1, para. 6).
The DTC channel, now 31% of revenue, offers higher profit margins and direct access to customer data, a significant increase from 25% six years prior (p. 3, para. 3).
The company was founded on creating the performance apparel category, a core part of its brand identity and a foundation for future development (p. 1, History).
Ownership of platforms like MapMyFitness is a strategic asset for collecting valuable customer data and building a loyal community (p. 3, para. 2).
The company's "'us versus them' philosophy" and edgy marketing resonate deeply with its target audience of aspiring athletes (p. 3, para. 4).
UA competes across apparel, footwear, and accessories, which mitigates risk from a downturn in any single category (p. 2, para. 1).
Ownership of 162 outlet and 19 brand house stores provides a controlled environment for DTC sales and brand presentation (p. 3, para. 4).
High-visibility contracts with the NFL, NBA, and MLB ensure products are seen by millions of fans (p. 2, para. 1).
Founder Kevin Plank's personal drive provides a unifying vision, aiming to be the "'biggest, baddest brand in the world'" (p. 2, para. 2).
~75% of revenue comes from a declining region where UA is losing money, creating significant vulnerability (p. 1, para. 4).
A collapse from a $257M profit to a $48M loss in one year signals a critical failure to control operating costs (p. 4, Ex. 2).
Inventory grew 26% while sales grew only 3%, leading to a dangerously high DIO of 159 days, tying up cash (p. 4, 5).
Without patents, competitors can legally copy designs, eroding UA's primary product differentiator (p. 7, para. 2).
An "all eleven top executives are male" leadership team creates a strategic blind spot for the lucrative women's market (p. 3, para. 1).
The company is in "some disarray" with multiple high-level departures, indicating internal conflict and strategic inconsistency (p. 3, para. 1).
UA "lags niche competitors" like Lululemon in the women's market, a significant weakness in a major growth category (p. 10, para. 4).
Dependence on retailers who are going bankrupt (e.g., The Sports Authority) poses a direct and immediate threat to revenue (p. 1, para. 3).
Competitors Nike and Adidas are 5-7x larger, with vastly greater capital for marketing and R&D (p. 7, Ex. 9).
The Connected Fitness division lost $55 million in 2017, diverting cash and focus from fixing the core business (p. 7, Ex. 8).