Digdug

Threats to Under Armour’s Business Worrisome

I have to go with Andrew on this one. I think you have nailed the financials, but you are evading the trend and "causal" data.

According to the trade pubs, UA is gearing up to launch a series of 6 performance running shoes. The set-up and R&D associated with such an entry are profound, but given the apparent success of the XT launch this past May, and the fact that the Athletic Specialty channel has now bought into the running launch in a big way (Jan. 2009), I think they will "blow it up" with Q2 & Q3 earnings.

The final piece is that UA is the only company that has cracked the desire code like Nike. Having spent 20 years on athletic storefronts, I have watched kids beg, borrow, and steal to get the gear they want, and not the '91 - '93 recession, nor the dip in '01 - '02 impaired that. Other companies may have a tough go, but I see Nike and UA weathering this storm.

P.S. I put my money where my mouth is and recently picked up 200 shares of UA.