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Analyst report: Under Armour loses favor with some teens

Analyst report: Under Armour loses favor with some teens
Misty Copeland campaign for Under Armour. (courtesy of Under Armour / Baltimore Sun)

While elite female athletes are sporting Under Armour, the typical teenage girl appears to be a tougher sell.

That conclusion comes from Piper Jaffray's semi-annual teen research survey. The report shows  Under Armour giving up market share since last fall to Lululemon and Nike as a preferred women's athletic brand.

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Under Armour lost its second place spot behind Nike to Lululemon this fall in a list of upper-income teens most popular athletic clothing brands, according to Taking Stock With Teens.  The Baltimore brand had ranked second, with Lululemon third, since spring 2014.

Under Armour's performance among the teenage consumer is good but not great, Piper Jaffray senior research analyst Erinn E. Murphy said in a report this week downgrading Under Armour shares to neutral from overweight.

"Under Armour is moving in the right direction, but not full steam ahead yet," Murphy said.

Among wealthy teenage girls, Under Armour has lost share since last fall while Nike and Lululemon gained. Among average-income girls, Under Armour has stayed in second place but still is losing share while top-ranked Nike and third-place Lululemon have made slight gains.

Under Armour has been focusing on the fast-growing women's market and attempting to grow the business from 30 percent of sales to a category that will rival or exceed its core men's business. Last year, the company unveiled its biggest-ever marketing campaign targeting women -- "I Will What I Want" -- featuring principal ballerina Misty Copeland, decorated downhill skier Lindsey Vonn, supermodel Gisele Bundchen, U.S. soccer player Kelley O'Hara and other athletes.

Murphy said she was pleased by ongoing traction seen by the brand as a footwear preference among upper-income teen boys.

In a list of all footwear, not just the athletic category, Under Armour  moved up to No. 9 from No. 12 six months ago. And the brand, endorsed by NBA star Stephen Curry, was the No. 8 footwear choice for average income teen boys, up from No. 21 in the spring.

Good signs, Murphy said, because footwear and international expansion are two of the most compelling growth categories for Under Armour.

"To be clear, we still strongly believe in the longer-term opportunity for UA," she said.

lorraine.mirabella@baltsun.com

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