Under Armour details plan to double revenue by 2016

Under Armour's Investor Day featured videos set to thumping music, a guest appearance by New England Patriots quarterback Tom Brady and bold promises layered on top of unfettered optimism.

Most importantly, though, the event Wednesday at the sports apparel company's Tide Point headquarters answered questions the investment community brought to Baltimore. Analysts, who are invited to the facility only every two years, were eager to more closely investigate the company's merchandise and speak with product developers.


Under Armour CEO Kevin Plank and other top executives detailed a three-year plan to reach $4 billion in revenue by 2016 — nearly double what the company expects to take in this year — through innovation, expanding the company's reach internationally and improving its ability to sell directly to customers.

"The next time you're here," Plank said, "you'll see an American brand that is making strides as a global company."


Plank has never shied from repeating mantras or goals, and he peppered his talk with familiar slogans. Much of the information shared with about 100 analysts built upon themes Plank has discussed frequently over the past six months. This time, though, his top deputies were there to give more insight into the company's plans.

Charlie Maurath, chosen last year to run Under Armour's international division, shared a broad plan to build infrastructure in key markets leading up to 2016. The company plans to open four subsidiaries next year, including one in Brazil to capitalize on the 2016 Summer Olympic Games in Rio de Janeiro.

Under Armour, with 14 quarters of at least 20 percent revenue growth, has become a major player in the United States but its international sales have been slower than expected. Only 6 percent of its sales in 2013 will come outside its home market; Nike, based in Portland, Ore., generates 60 percent of its sales internationally, as does Adidas, based in Germany. Under Armour aims to reach 12 percent international sales by 2016.

Maurath, who poked fun at his thick German accent, helped build Adidas' infrastructure in Latin America and has begun doing the same for Under Armour. He said he has revamped leadership teams in Europe — where the focus will be on the United Kingdom, Germany and France — Asia and Latin America, and is leading an effort to move into Australia while evaluating opportunities in the Middle East.

"Any company that has embarked on international expansion has found how important infrastructure is," said Sharon Zackfia, a partner at Chicago-based investment firm William Blair & Co. "Under Armour made a very compelling case that they now have the right people in place to pull it off."

Under Armour plans to open 10 additional international offices this year, surpassing the number of offices it keeps in the United States. The company recently opened a design hub in Portland and plans to do the same in New York later this year.

Plank's original partner, Kip Fulks, presided over a discussion of the company's slow-to-mature footwear business. Asked by Plank to work directly with the division last year, Fulks helped show off the new SpeedForm shoe.

Senior creative director Dave Dombrow said the shoe's inspiration came from Apollo space suits used for moon landings, which were manufactured by a division of brassiere manufacturer Playtex. Analysts rushed to try on the shoe, made primarily of a snug-fitting piece of fabric without stitches.


"This is big," Dombrow said. "There's never been anything like this."

Officials also discussed a new product line called ColdGear Infrared, which they say incorporates a ceramic powder that retains body heat, and gave a long presentation on Under Armour's revised line of women's gear. Plank and others have emphasized the broadening of the company's consumer base, and showed projections for 2016 that reflect a changed company: Only 39 percent of sales would come from men's apparel, down from 53 percent in 2010, with gains in women's apparel, youth, footwear and accessories.

The company also announced plans to open a second Brand House — the first opened in Harbor East in February — in Tyson's Corner, Va., and to continue using the direct-to-consumer concept in high-traffic areas along the East Coast. It is also planning to expand its line of factory stores and its online presence, as Plank and others continue to express a desire to "tell the Under Armour story" outside of competitive retail environments.

Plank called Brady to the stage in the morning, eventually asking the veteran quarterback why he chose to stick with Under Armour. Brady joked that he saw high school kids using the gear and wanted to stay young, but also lauded Plank's efforts to continually push the brand forward.

Brady also called being in Baltimore "bittersweet" — Plank had already reminded the audience that the Ravens were visiting the White House at that moment to celebrate their Super Bowl victory.

Under Armour also screened a video originally made for internal use showing actor Jeremy Piven roaming Baltimore and eventually settling in a Fells Point bar to discuss the history of the company and challenge employees to continue its history of innovation.