Under Armour Lacks an Advantage, but the Global Sportswear Market Remains Dynamic

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the firm’s North American sales increased to $4 billion from $700 million and it passed narrow-moat Adidas as the region’s second-largest athletic apparel brand (after wide-moat Nike). However, Under Armour’s North America sales are little changed over the past seven years as it has been challenged by established competitors and new entrants. While Under Armour’s new Protect This House 3 plan is designed to make the brand more competitive in the U.S. through its merchandising, e-commerce, and supply chain efforts, we think it has fallen behind some peers on innovation, sponsorships, and style.