Stock of the Week: Under Armour

Challenger to dominant brands Nike and Adidas has lost momentum in recent years, buffeted by the pandemic's effect on US retail and an accounting scandal

James Gard 18 June, 2021 | 9:53AM
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Stock of the week post-it

While the winner of the Euro 2020 football tournamen has yet to be decided, there’s a clear winner in our stock of the week poll. Our followers have chosen challenger brand Under Armour (UAA) between a range of listed sports brands including recent stock of the week Nike and German powerhouse Adidas (ADS).

While US giant Nike traces its heritage back to 1964, Under Armour is a relative newcomer to the athletic goods scene, celebrating its 25th birthday in September this year. With the boom in sports on television over the last quarter of a century, combined with the increased spending power of emerging market customers in countries like China, the industry has grown significantly. “Wellness” megatrends and the rise of “athleisure” have helped the cause of those marketing to amateur athletes. The market is estimated to be worth $366 billion in 2021, and is forecast to grow by double digit rates over the next five years. In theory, even taking a small part of Nike or Adidas’ market share in a growing market should be a winning strategy.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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James Gard  is content editor for Morningstar.co.uk

 

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