By Sara Germano
Popular athletic-apparel maker Under Armour Inc. is looking to
conquer the running industry, but the race could be more of a
marathon than a sprint.
Chief Executive Kevin Plank said Thursday the running category
will be the biggest revenue opportunity for Under Armour in the
future, as the company said first-quarter profit jumped 73% to
$13.5 million and revenue rose 36% to $641.6 million.
Rivals like Nike Inc. and Adidas AG derive most of their income
from sales of footwear, which is slightly bigger than the market
for sports apparel. Under Armour, however, made its name in
athletic apparel, which still accounts for more than 70% of its
sales, and is hoping to break in.
Under Armour unveiled its first running shoe in 2008 and makes
footwear in the basketball and training categories, in addition to
cleats for football, baseball, lacrosse, softball and soccer. Yet
it still had just a 2.33% share of the $7 billion running-shoe
market last year, slightly better than its overall presence in
footwear but well behind market leader Nike, which controls more
than half, according to industry analyst Matt Powell of
SportsOneSource.
"The most difficult thing about the footwear business is the
long lead time, the long time it takes to get people on board,"
said Mr. Plank, who spent much of the company's earnings call with
analysts discussing the importance of building up Under Armour's
presence in running.
The company has been ramping up its marketing and product
development in the category, introducing the SpeedForm Apollo shoe
earlier this year and becoming the official apparel and footwear
sponsor of next month's Bay to Breakers 12-kilometer road race in
San Francisco. Last year's race drew more than 22,000 finishers,
making it one of the largest nonmarathon races in the country,
according to data from road-racing tracker Running USA.
Under Armour signed professional runner Nicholas Arciniaga
shortly before Monday's Boston Marathon, where the runner finished
seventh overall and was the second American behind race winner Meb
Keflezighi. Mr. Keflezighi won the race in Skechers, a more recent
competitor in the performance running category.
As more companies like Under Armour and Skechers USA Inc. make
serious plays in running footwear, they may meet with resistance
from some specialty running retailers who work with limited
inventory space.
"If we take on a new shoe, something else has to go," said Mark
Plaatjes, co-founder of Colorado-based specialty chain Boulder
Running Company. "There's only so much space in the store."
Baltimore-based Under Armour also addressed concerns in the
wearable tech segment, following its purchase of popular app
developer MapMyFitness for $150 million last November to better
compete against Nike and others offering fitness-tracking devices
and software.
The company on Thursday said that registered users of the app
have grown from 20 million to 24 million since last fall, and
projects they will approach 30 million by the end of the year. Mr.
Plank said that Under Armour targeted the app developer because its
product is device-agnostic, particularly when there has yet to be
"a single market leader to step forward" in hardware.
Last week, Nike acknowledged that it would be laying off some
staff in its digital sport division, which oversees its proprietary
Nike+ digital community and development of its FuelBand fitness
tracking device. Nike said it will continue to sell and support the
device. Earlier this month, the company said its Nike+ community
had reached 28 million users.
Write to Sara Germano at sara.germano@wsj.com
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