UA Revenue Increased 28% In The Second Quarter Of This Year Compared With The Same Period Last Year.

U.S.A

The upstart Under Armour has attracted many people's attention because of the nearly crazy growth rate in recent two years.

Especially in their own American stronghold.

We need to look at this competitor in a different way.

However, in recent times, Under Armour has begun to worry about its performance. In the competitive sporting goods market, it can not tolerate any neglect.

Last week,

The financial report for the second quarter of this year was released.

Although the performance is acceptable from the point of view of revenue, the income of US $1 billion is 28% higher than that of the same period last year.

And in both the domestic market and overseas markets, UA's revenue has also increased significantly.

Everything looks beautiful. It's still the usual UA rhythm.

However, there is a huge hidden danger behind the glossy data, because UA's net profit plunged from $13 million 760 thousand in the same period last year to $6 million 340 thousand in the quarter, down 57% and operating profit by 39% to $19 million 370 thousand.

It can be said that such a scene has not been seen in UA for a long time.

The bankruptcy liquidation of sporting goods retailer Sports Authority has a great impact on UA.

As one of the big suppliers of Sports Authority, UA has to pay up to 23 million US dollars for its bankruptcy liquidation, which also greatly affected UA's profitability in the last quarter or even the whole year.

In addition, the collapse of Sports Authority has made UA have to spend more on channel sales, which is a new start for UA and will undergo a period of adjustment after all.

Actually, this is not difficult to understand. In the last quarter, UA was strong enough in terms of its revenue capability. But why profit fell so badly? There is only one reason for that: the huge increase in expenditure.

However, from the perspective of UA, such a result can not be regarded as an accident.

In fact, the growth rate of UA's revenue has slowed down in the last quarter.

In the first quarter of this year, UA's revenue grew by more than 30%, but by the second quarter, the figure has shrunk by 2.5 percentage points.

This is not a positive signal, of course, the pot can not be completely backed up by the bankruptcy liquidation of Sports Authority.

The most serious problem is clothing category, which accounts for more than 60% of UA's total revenue. However, in the past quarter, the category's revenue growth has dropped below 20% for the first time in more than seven years, and only 18.9%.

Even the killer footwear products of UA were not spared. Although the sales volume of more than 240 million US dollars increased by 58% over the same period last year, there was a sharp fall compared with 94.5% and 64.2% of the previous two quarters.

We need to know that between April and June, when the NBA regular season ended and the playoffs and finals took place, the warriors' record of regular season matches and the regular season MVP boost, plus the high attention of this year's finals, should be the best time to sell UA basketball shoes.

Crisis exists, but we don't have to be too bad about Under Armour.

The collapse of Sports Authority has a huge impact on the sporting goods market in North America. In 4-6, this is an important period for the stock market in the North American market. In this way, inventory backlog and sales channels are narrow enough to make any brand crazy.

Not only is UA, but Nike's life in this period is also bad, because in the North American market, Nike's dependence on Sports Authority is much better than that of UA.

In the fourth quarter of fiscal year 2016, Nike's profits declined significantly. Even in the first quarter of fiscal year 2017, Nike's performance expectations were hard to satisfy investors.

However, the current UA and Nike obviously do not have too much comparison, because Nike also has a huge overseas market to support, and for the main battlefield in the local UA, we need to do more work.

Fortunately, UA has early warning about this. From the second half of 2016, every step is crucial to UA.

The most difficult problem before UA is to expand sales channels.

With the loss of Sports Authority, UA needs more opportunities for its products to reach consumers.

According to the group, from March 1st next year, UA will enter the US Department Store Kohl 's Corp.' in over 1100 stores in the United States.

As a result, UA has greatly broadened its sales coverage, and it has also enabled people from all walks of life to understand their brands at a close distance.

More importantly, UA is starting to break its inherent image in the people's mind. It is also vital for sports brands to become more alive and more grounded.

According to Morgan Stanley analysts, cooperation with Kohl 's Corp. will generate $190 million in sales for UA next year.

In addition, UA plans to open the store to the Fifth Avenue in Manhattan, New York, and it will also be UA's largest retail store in the world.

The location of the new store is also very sophisticated. UA chose the site of New York Scwhaz, a famous piano toy brand FAO, as its base in Fifth Avenue.

This long-standing Piano Toy Brand once built huge piano dolls on Fifth Avenue, which made it an alternative landmark in the area.

UA naturally valued the high popularity here and hoped that this store could create its own competitiveness in the retail sector.

However, the store is still in the stage of internal design and development positioning planning. Under Armour said that the store can meet consumers in early 2019.

In addition to retail sales, the store also carries the responsibility of passing the brand culture.

{page_break}

In contrast to the two American brands, Adidas and Puma have gained a lot in the second quarter of this year.

Among them, Adidas has raised its annual performance expectations for the four time in less than six months, and Puma realized profitability in the first quarter.

In addition to the European Cup, the combination of fashion and women's market is also a decisive move.

Competitors have pointed out a clear road, and UA naturally can not remain unmoved.

It is a good start to invite Tim Coppens, a senior designer of Ralph Lauren and Adidas to be the design director of the new product line UAS.

As for the market reaction, it can only be seen in the autumn.

UA has been criticized for its lack of development in the Chinese market, and now they are finally determined to play a big role in it.

It is reported that UA plans to open 120 stores in China by the end of this year. Although it can not be compared with Adidas and Nike, it is also a great progress for itself.

Last month, UA also brought the Armour Roadshow roadshow event to China for the first time, including ten cities in Beijing and Shanghai.

UA has built a panoramic exhibition in the central business district of these cities. Consumers can learn more brand stories and experience the latest sports equipment, and can also join in the real professional thematic training.

In the Chinese market, consumers do not have a strong awareness of the brand of UA, coupled with competitors, and UA really needs to spend more time trying to get fame here.

The Armour series has always been the main product of UA, and its characteristics are distinct. It is appropriate to use it to make propaganda headcards.

It is reported that the roadshow will also go to more cities and set up women's special events. Since UA's footsteps in China are lagging behind, the fastest way to raise brand awareness is what UA needs to do at present.

Increasing the number of stores, expanding the Chinese market and attracting female users are the three magic weapons for UA to solve the immediate difficulties. But these are not the practices that can be seen in a short time. On the contrary, this will largely increase the UA's financial expenditure.

It seems that UA needs to take a long time to restore its high profit growth.

Indeed, the task ahead of UA is still arduous. Last year, UA set a target of $7 billion 500 million in revenue in 2018, compared with $2 billion 50 million in the first half of this year.

Time is pressing and far from the goal. UA still needs to rush.