Under Armour had previously announced new connected shoes last month, thereby doubling down on connected footwear. This footwear follows a selection of new shoes publicized in 2016 across multiple categories, all of which are helping Under Armour to have more grip in this market.
With new styles making progress into new markets, Under Armour's growing footwear opportunity could blow—or rather, ‘sprint’ right past the sales forecasts targeted in the prior year.
Under Armour's newest connected shoes connect to a user's account on Under Armour's MapMyRun mobile app, and are manufactured to equip runners the digital tools needed to understand recovery and eventually capitalize on performance. The said footwear use pre-run tests to provide runners insight into muscle fatigue before working out.
Connected shoes aside, the market in running has been an important segment for Under Armour in 2016 as well. The Bandit 2, a fairly low-priced running shoe that was launched, has garnered high industry ratings. Basketball has been another growth driver for Under Armour in 2016, carrying the success of the Curry line after UA-sponsored NBA MVP Steph Curry's own continued success. The recently launched Curry 3.0 shoe has faced problems lately following third-party retailer notes that they haven't been selling as well as earlier versions. Nonetheless, demand for the whole line throughout 2016 has been high.
The basketball and running markets seem to have been leading footwear sales in last year, but Under Armour has sustained growing into other types of footwear as well besides the two. Among its interesting 2016 footwear releases was the first 3D-printed cross-trainer dubbed as the UA Architech. This was the sportswear company's first ever golf shoe in which pro-golfer Jordan Speith wore during the 2016 Masters Tournament.
Alongside this were new styles within baseball, training, fishing, hiking, and several other sports as well. The company is also developing its more casual-focused styles— for shoes and apparel— as part of the new Under Armour Sportswear fashion line.
Now within the athletic apparel market, footwear seems to be a good growth opportunity. Global Market Insights analysts claimed the athletic footwear market is seen to grow 3% per year on average from 2016 to 2023.
That might not appear much, but the market was an estimated $80 billion worldwide in 2015, so that 3% growth actually symbolizes billions in new sales both from added unit shipments and higher average prices per shoe. Besides the market itself becoming bigger, Under Armour is also chipping away at market share held by well-known industry giants such as Nike and Adidas.
The rising market and Under Armour's driven thrust to increasing its footwear line promised well for the company, as for the first three quarters of 2016, footwear has greatly outperformed every other category in year-over-year sales growth. That is, save for connected fitness, though that segment takes up just a minute portion of Under Armour's total revenue.
With all of these new styles announced in the prior year, Under Armour's growth potential in this market is still on the rise.
Of course, Under Armour's growth in footwear won't go unopposed by behemoths Nike and Adidas. Each sportswear company rival is coming out with their own new styles and upgrades, take for instance, Nike's new self-lacing shoe, and Adidas' 3D-printed running shoes that was introduced in December.
Nonetheless, Under Armour's bullish momentum in the footwear scene seems like it could be on track to past its previous estimates with flying colors.
When the sports apparel maker made forecasts in September 2016 that it would hit $7.5 billion in sales by 2018, management mentioned that they anticipated $1.7 billion of that to come from footwear sales, or roughly 22%. The value would be approximately 2.5 times the $678 million it posted in full year 2015, or estimated 35% on average each of the next three years.
For 2016, forecasted year-end growth around 50% already greatly topped that previous sales goal, and footwear already takes 22% of total sales. With various new styles and a worldwide market that continues to grow by billions of dollars annually, it’s not impossible for Under Armour to outpace its 2018 footwear sales goal.
This is FSM News bringing you the freshest and biggest market updates. We provide in-depth analysis and detailed news stories to keep traders constantly informed in the fast-paced industry that we live in. Not only that, but we also keep traders and investors safe from scam brokers with our scam warning list.