Last Wednesday, at the company’s Investor Day, Under Armour CEO Kevin Plank ended his opening statement by urging those in attendance to clap if they felt so compelled.
There were, indeed, moments that inspired people in the crowd to bring their hands together. Patriots quarterback Tom Brady showed up. An adorable video featuring young athletes was shown. Jeremy Piven appeared in a rousing speech about what Baltimore means. Models walked the stage wearing new products.
At other times, though, Under Armour officials were left to provide their own celebratory punctuation, saying, “Wasn’t that cool?” or “Isn’t that impressive?” The investment community is nothing if not skeptical and measured. Besides, what analysts want to understand, most of all, are the numbers. You should have seen how fast their fingers flew to their iPad screens when Under Armour CFO Brad Dickerson took the stage to lay out the financial details.
Ultimately, they left with cautious optimism that Plank could guide the company to the doubling of profits – to $4 billion – by 2016 that he and others had discussed. Several that I spoke to on background – because they hadn’t been cleared to talk on the record – said increasing emphasis on women’s gear and direct-to-consumer sales represented a solid opportunity for growth.
But there remained some question of whether Under Armour could successfully gain ground internationally. Dickerson assured a questioner that the company could achieve steady growth despite needing to spend to launch four subsidiaries next year. And he acknowledged the company was now projecting growth in the lower end of its 25 to 20 percent goal. Expanding globally won't be cheap, as competitors Nike and Adidas are well established -- and continue to spend billions on marketing and sponsorships to keep their brands on consumers' minds.
Under Armour stock has dropped three percent since last Wednesday, but there’s been no apparent change in how the company is viewed by analysts. Goldman Sachs has dubbed the revenue goal “achievable” and Stern Agee (and others) have advised investors to buy and are projecting continued growth from the company.
As with everything it does, Under Armour hoped to wow those in attendance at Investor Day. Plank’s ability as a motivational speaker has been well documented, and he’s backed by a sophisticated team that knows how to put on a show.
Analysts, though, are charged with looking beyond that and to the core question of whether the company can continue delivering profits to its stock holders. So far, they’ve agreed with Under Armour leadership on that front.