Under Armour 3Q15 Earnings Call Notes

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Getting ready to celebrate 10 years as a public co

“In three weeks, Under Armour will be celebrating our 10 year anniversary as a public company. Back in 2005, we were a $281 million company. Compression apparel made up two-thirds of our business. The phrase ‘connected fitness’ had not yet been coined. The day when we would feature a ballerina in a commercial seemed unlikely. And Jordan Spieth had only just begun his journey to greatness by talking golf lessons at Brook Hollow Golf Club in Dallas at the tender age of 12 from Pro Cameron McCormick.”

It takes a long time to get making shoes right

“one thing I want to emphasize to people is that it is 10 years in making shoes for us, but it absolutely takes time. The first category we got into was American football cleats and that was 2006 and it was a big breakthrough and we had high teens, low 20s market share, and since that time we are now pushing close to a 40% market share in football cleats with our sight set on being number one. And I say that only because of the category we’ve been in the longest, and if we’re 10 years in football cleats and five years in running shoes, imagine what we’re going to look like in running shoes in another five years there.”

It’s beyond the aesthetic

“And so it was about the aesthetic of the shoe but it’s so many factors more than just do you make a good speed cleat as to, are you in basketball, do you have an asset like a Stephen Curry that gives the credibility to the one who wears the shoe.”

It’s also about being able to get to the A team in the best factories

“And then beyond that, it’s when we go to being in the biggest factories, it’s not only being in the biggest or the best factories but it’s not having the B, C or D teams in the factories, but getting to a point where you have the A teams in the factories. We’re not going to get to that point where I mentioned 30 million pairs of shoes versus 0.5 billion to our competition, until we have the ability to truly level-load and give them the things that they need”

I don’t think our industry has been incredibly innovative

“I don’t think our industry has been incredibly innovative at all. When you look and you compare the fact that 20 years ago the technology that can fit on my fingernails today or in my iPhone or Samsung device, it took a mainframe the size of a Greyhound bus just 20 years ago and today it’s absolutely evolved. In footwear, we make shoes, we make apparel the exact same way we did 80 years ago.”

Our team isn’t preparing to battle current competitors its getting ready to fight where they’re going in the future

“what our team is preparing for isn’t what’s the next shoe coming from one of our current competitors, what we’re thinking about is what are we going to do if Apple or Samsung decided to make a shoe, how are we going to answer that. So that’s the type of I think leapfrog mentality and that moon-shot thinking that we are challenging our team with, let’s not fight with where people are today, let’s think about where they’re going in the future and what we can do to be great.”