Sneaker Business Jumping Charts

Before I start, this site is ridiculously addictive, but by the time I get off work I miss all the hot trades! ARGH!

I enjoy watching the footwear 'n apparel scene, especially new start-ups like GreedyGenius (please refer to my earlier blog, one of the featured blogs on this site), and in that list, I have also been watching Under Armour for a while, and deeply respect the way co-found and current CEO Kevin Plank has grown their name from scratch with major brand names already dominating the market, needless to say, mainly referring to Nike, Inc.

A little background before the analysis (click here)
Once upon a time, a young but aggressive football team captain for the University of Maryland Terrapins realized just how important his team's performance was to the uniforms they put on their backs. His distaste for his cotton uniform that, soaked with his sweat, effected his performance and would soon give him a vision to create a successful apparel sportswear product a short few years after. He developed a prototype of a microfiber T-shirt designed to keep a player dry and light during intense physical activity. To test his product, he was able to get two major college teams, namely Georgia Tech and Arizona State to try on his creation. What followed next? Success, and NFL's Atlanta Falcons shortly followed suit.

Since 1995 the idea of founder, President, Chairman of the Board of Directors and Chief Executive Officer, Kevin A. Plank, has been wide-spread and used by many major athletes and sports teams (Under licensee of the National Hockey League, supplier to the U.S. Ski Team, USA Rugby, the National Lacrosse League, and Major League Lacrosse; as well as many professional football, baseball, soccer players and athletes in major collegiate and Olympic sports). By November 18, 2005, the company took a step further with its IPO. The stock had the second highest increase in share price ever for the first day of trading, debuting at $13, and doubling to close at just over $26 per share.

Let's get dirty and look at their numbers (click here)
Those of you that have been watching this company should know by now that their prices dropped ove 9% today, ending just slightly under that by day-end to $38.75. Apparently, although not confirmed, there has been some news that Under Armour is to miss their earlier guidance. This does not come to too much of a surprise given Nike's previously earning announcement that missed analysts expectations by a nifty margin. Under Armour had built up a lot of hype after their last quarter earnings when they reported and earnings jump of 248% and raised its sales outlook guidance for the year (revenue estimates for the year between $380 million to $390 million, and net income to increase 57%+ between $31 million to $32 million).

Under Armour Second-Quarter Results on July 26, 2006
Under Armour gave guidance for revenues to be in the range of $70 to $75 million and net income in the range of $250,000 - $750,000. Analysts on average are expecting net income of $1.9 million on revenues of $62 million for second quarter 2006, a mixed combination. Let's just wait to see how the results will end up, perhaps today's drop was only a bit of jitters, but I'm not betting on that.

The Bear Tears Through Under Armour!

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