Under Armour 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Building a team in footwear

“As we’ve been discussing on these calls, we are most proud of the foundation and the team we are building in our footwear category, as we continue to gain share and drive innovation in large categories like running and basketball. We significant invested in footwear leadership in 2014 and the strength of the Under Armour brand continues to bring consumers to our Footwear, while our focus on cushioning and fit is helping drive market share gains.”

International revenue grew 96%

“The last piece of 2014 that I’ll discuss also happens to be the part of our business where we saw the greatest increase in growth, international. Revenues grew 96% to $260 million in 2014 as we open new markets around the globe.’

We don’t have to follow our competitors’ playbook

“The truth is that you know more about how your car is performing than your own body. And we see the potential to inform and inspire our consumer through these assets and its impact on our ability to sell shirts and shoes as unparalleled in our industry. We build a $3 billion business by making great product and telling great stories, but there is nothing that says we must follow our competitors’ playbook especially when the way consumers digest media and make their purchase decisions is undergoing such dramatic shifts.”

The reason to invest in digital

“To me it felt incredibly obvious, it reminded me when I made that first – and looking around and saying has anybody ever done anything like this and why everyone is still wearing short sleeve cotton tee in the summer and long sleeve cotton tee in the winter. And I look and say no one has aggregated and put all of these pieces together and we don’t see anything coming.”

No one is doing it

“I saw this really wide-spaced with what we’re doing in making T-shirts. The opportunity that we have here is a bit different just because there is so much energy and excitement around wearables and biometric measurement. But the surprise that I have is that frankly no one is leading or adjusting what we are today, the power of a truly Connected Fitness Community.”

A daily dashboard

“Activity, sleep, exercise and nutrition and that’s the place where we think that we can win particularly with our UA Record dashboard. And again the vision there is to become the daily dashboard that people check, the same way you check your bank balances, same way you check the whether, is the same way that you get an update on the most important asset in your life, your own personal health.”

Under Armour 2Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“let me start with International. As you hear, we’re really excited about it. We think there’s — as I said, it’s going to be our largest growth category next year, which will be somewhere north of 40% as we see it as a company. ”

“we’re currently doing business in 61 markets today. When I say doing business really well, it means that a lot of times, we just have a rack of clothes and maybe a distributor. And so, we’re really trying to professionalize that and really grab markets that we can make an impact in. So beginning, A, with the opportunity of where should we go based off GDP, things like that. Then we’re looking at the return because we’re not looking to make 15-year investments, although we have the ability to do that and we are, in some cases, but we understand that we also want to invest in markets that can return to us quickly. And then we’re also looking at the market expertise. And that basically comes down to do we have the leader”

“Sporting goods doesn’t exist as cleanly as it does here in the majority in the rest of the world. So having to be a lot more thoughtful and a lot more creative. And it means we’re not taking one playbook into the new markets that we’re attacking or going into”

“…introducing ourselves to consumer not just as an apparel company but as a true head-to-toe athletic brand.”

“our mix today still is heavily weighted towards cleated versus non-cleated relative to a lot of other players out there. Obviously, that cleated side of our business is really, really important to our overall Footwear business from an authenticity perspective and credibility perspective, but it does come at the lowest of low margins in Footwear. So with our mix being more weighted towards cleated, that obviously impacts our overall Footwear gross margins. Over time, though, as we are able to grow our non-cleated Footwear business, specifically things like running, which we’ve been recently doing, we have the ability — those are — those commit better margins, and that should help our mix going forward, gross margins in Footwear as we sell more non-cleated footwear.”

“I think we’re still establishing ourselves. The one thing about International and probably lessons learned over the last 17 or 18 years was that anything just takes time. And I think a longer view is what we need to approach any of these markets. I use the story of Japan a lot in sort of articulating how long it takes us, 8 years from 0 to $35 million, and then it was year 9 that they went from $35 million to $72 million and I think the tipping point really occurred. So I don’t know if that model — even with larger scale, larger size, well, resources, the things that we have today going for us, it still comes back to an investment, and it’s a prudent model.”

“we really want to bring something to China. And the gift that we want to give them is what does it feel like and what is it like to be an athlete. And so this story is about 80% experience of what does it feel like to be in the middle of the pitch at White Hart Lane with Tottenham or does it mean to feel like you’re in the ring with Canelo Alvarez and what is made to feel like being on a court with Brandon Jennings and Kemba Walker and DeAndre and our basketball assets. And so there’s a lot of education that goes to all with it. The philosophy that we’ve taken as a company is that we’ve got a great U.S. business, a great North American business that is driving and creating profit for us, and we understand that there’s a balance between our ability to utilize, I think, our North American growth and cash position, of making prudent investments in a longer-term strategy of being a global brand. As I’ve mentioned all along, our definition of global is when more than half of our revenues will come from outside the United States, and there’s a lot of reason for that. Number one, the opportunity. Our brand translates. The consumer is asking for it in other markets. And so we need a good job of making sure that we do that in a prudent way that’s very [indiscernible]. And then also, as Brad said, there’s a lot of strategic reasons for it as well. And we’re not going to make decisions based on tax rates, but the fact is that there’s a lot of things that can help us by being a more impactful and bigger global brand.”

“it’s not going to happen in 2 or 3 years. And if we get lucky and the market catches fire, great, but it’s going to take 6, 8 and 10 years and we’re sitting here telling you that we expect to be around for that much time and more. And we’re going to make the investments that’ll help us be great and be a local brand.”