Under Armour could become the second biggest sports brand in both apparel and footwear, with sales expected to climb at least 25 percent a year for the next five years, one analyst said in a report today.
In a preview of the Baltimore-based company's earnings for the fourth quarter, Sterne Agee analyst Sam Poser said both footwear and apparel sales have accelerated from the third quarter. And, importantly, kids' merchandise sales are outpacing adult sales.
That's "important for [Under Armour] to become the 'it' athletic brand in 5-10 years," Poser said in the report.
Sales for the fourth quarter will likely jump 24 percent to $846.9 million, helped by "accelerating international sales growth, increased floor space at major retailers to support the growth of women's, kid's and hunting businesses, and the continued strengthening footwear business."
The brand is stealing market share in apparel from Adidas and Russell.
And it has an edge over Nike in hunting clothing, which is not a focus for Nike but which is seeing good backing from retail chains such as Dick's and Cabela's.
On the footwear side, where Under Armour still is a relatively small player, business hit its stride last year, increasing 42 percent through the first three quarters, Poser said. The brand saw big jumps in sales of running and basketball shoes.
Under Armour beat Adidas in basketball shoe sales and now places third in market share in that sport behind Nike and Jordan.
Poser said Under Armour has attractive growth prospects in the U.S. as big chains such as Dick's Sporting Goods and Hibbett continue opening stores and adding more Under Armour shops within existing stores.
Under Armour plans to announce earning for the fourth quarter on Feb. 4.