UA's Plank Projects Revenue Will Double To $4B By '16; Focus On Int'l Growth
Under Armour Founder, President & CEO Kevin Plank and other company execs yesterday during the company's Investor Day "detailed a three-year plan" to reach $4B in revenue by '16, representing "nearly double what the company expects to take in this year," according to Chris Korman of the Baltimore SUN. UA plans to achieve its revenue goals "through innovation, expanding the company's reach internationally and improving its ability to sell directly to customers." Much of yesterday's presentation "built upon themes Plank has discussed frequently over the past six months." UA Int'l President Charlie Maurath "shared a broad plan to build infrastructure in key markets" leading up to '16. The company "plans to open four subsidiaries next year, including one in Brazil to capitalize" on the '16 Rio de Janeiro Games. UA's int'l sales have been "slower than expected," as only 6% of its sales in '13 will come from "outside its home market." The company "aims to reach" 12% int'l sales by '16. Maurath said that 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." UA "plans to open 10 additional international offices this year, surpassing the number of offices it keeps in the United States." The company also announced plans to open a second Brand House in Tysons Corner, Va., and to "continue using the direct-to-consumer concept in high-traffic areas along the East Coast" (Baltimore SUN, 6/6).
HOW TO CROSS THE POND: Plank appeared on CNBC's "Squawk on the Street" yesterday alongside UA endorser Tom Brady, and CNBC's David Faber asked Plank, "What is the strategy to get your product to people in Europe?" Plank responded, "You better be local first." He added, "We’re not new to it. We've been in Japan since 1998, and we have a business that’s (worth) nearly $200 million last year and growing at a rate of 50 percent this year -- so we know that our brand translates. As we take on these other key markets and places like Brazil or what we've done in China -- we've been there for three or four years, we’ve got five or six stores open now -- and frankly we have a lot more in the pipeline. A lot of times you’re not going to find the great key wholesale partner, which emphasizes the reason that we need to have our own story, our own retail stores as well." CNBC's Simon Hobbs asked, "Why bother to pick this fight at the moment? ... You’re a great all-American brand, you've done great things in the United States. But could this really destroy a lot of equity value if you get it wrong abroad?” Plank: "We've been very successful in our own market but we’re not going to define what we do or don’t do based on going against anyone else. We’re going to be very focused on what Under Armour can do" ("Squawk on the Street," CNBC, 6/5).