Under Armour, Inc. (UA): Business Model Canvas [10-2024 Updated]

Under Armour, Inc. (UA) has revolutionized the athletic apparel industry with its innovative approach and strong brand identity. This blog post delves into the Business Model Canvas of Under Armour, highlighting key elements such as partnerships with athletes, value propositions centered on performance and sustainability, and a diverse range of customer segments. Discover how Under Armour navigates the competitive landscape and drives growth through strategic initiatives and customer engagement.

Under Armour, Inc. (UA) - Business Model: Key Partnerships

Collaborations with athletes and influencers for brand promotion

Under Armour has maintained significant partnerships with prominent athletes and influencers to enhance brand visibility and appeal. Notable collaborations include endorsements from athletes like Stephen Curry and Dwayne Johnson. As of 2024, these partnerships have contributed to a substantial increase in brand recognition, particularly in the basketball and fitness sectors.

Partnerships with retailers for wholesale distribution

Under Armour's wholesale distribution model is a critical component of its business strategy. In the fiscal year ending September 30, 2023, the company reported wholesale revenues of $939.7 million, a decrease of 0.9% from the previous year. Key retail partners include major chains such as Dick's Sporting Goods and Foot Locker, which play a significant role in expanding Under Armour's market reach.

Licensing agreements for specific product lines

Under Armour engages in various licensing agreements to broaden its product offerings. For example, the company reported license revenues of $28.6 million for the three months ended September 30, 2023, compared to $33.1 million in the same period of the previous year. These agreements allow Under Armour to leverage its brand in categories such as eyewear, accessories, and equipment, thereby enhancing its product portfolio without incurring the full costs of manufacturing.

Collaborations with technology firms for digital innovations

Under Armour has partnered with technology firms to drive innovation in its digital offerings. The company focuses on enhancing its connected fitness platforms, including the MyFitnessPal app, which was sold in a previous transaction but continues to influence its digital strategy. As of September 30, 2023, Under Armour's digital revenue streams, including subscriptions and app sales, have become increasingly vital, contributing to its overall performance.

Partnership Type	Key Partners	Revenue Impact (Q2 2023)	Comments
Athlete Collaborations	Stephen Curry, Dwayne Johnson	N/A	Increased brand visibility in sports.
Retail Partnerships	Dick's Sporting Goods, Foot Locker	$939.7 million	Wholesale revenues decreased by 0.9% year-over-year.
Licensing Agreements	Various third-party manufacturers	$28.6 million	Licensing revenues decreased by 13.5% year-over-year.
Technology Collaborations	Various tech firms	N/A	Focus on digital innovation and fitness apps.

Under Armour, Inc. (UA) - Business Model: Key Activities

Design and development of performance apparel and footwear

Under Armour's product development strategy focuses on creating innovative and high-performance athletic apparel and footwear. In the second quarter of 2024, the company reported net revenues from apparel at $1,070,437 thousand, representing a 3.1% increase year-over-year. The footwear segment, however, saw a decline in sales, totaling $351,202 thousand, which reflects a decrease of 6.6%. This indicates a need for enhanced product design and diversification to capture market share in footwear.

Marketing and branding initiatives to enhance visibility

Under Armour continues to invest heavily in marketing to bolster brand recognition. In Q2 2024, selling, general and administrative expenses reached $606,236 thousand, with marketing costs increasing by 8.0% to approximately $54,000 thousand, representing 9.9% of net revenues. The company engages in various promotional activities, including athlete endorsements and sponsorships, to enhance brand visibility and drive sales.

Supply chain management and logistics oversight

Efficient supply chain management is pivotal for Under Armour, particularly in managing costs and inventory. The cost of goods sold for the second quarter of 2024 was $814,715 thousand, yielding a gross profit of $751,995 thousand, which translates to a gross margin of 48.0%. The company benefits from lower freight costs, contributing positively to gross margins. However, the increase in promotional activities has negatively impacted pricing strategies, necessitating a more robust logistics framework to optimize distribution.

E-commerce operations and direct-to-consumer sales strategies

Under Armour has significantly expanded its e-commerce capabilities, which accounted for $595,847 thousand in direct-to-consumer sales, marking a 3.2% increase. This channel continues to be a critical component of their sales strategy, particularly given the decline in wholesale revenues, which fell to $939,725 thousand. The company aims to enhance its e-commerce platform to improve customer experience and increase conversion rates.

Key Metrics	Q2 2024 (in thousands)	Q2 2023 (in thousands)	Change (%)
Net Revenues (Total)	$1,566,710	$1,573,885	(0.5)
Apparel Revenues	$1,070,437	$1,038,268	3.1
Footwear Revenues	$351,202	$375,885	(6.6)
Direct-to-Consumer Sales	$595,847	$577,116	3.2
Cost of Goods Sold	$814,715	$860,051	(5.3)
Gross Profit	$751,995	$713,834	5.3
Marketing Expenses	$54,000	$50,000	8.0

Under Armour, Inc. (UA) - Business Model: Key Resources

Strong brand equity and recognition in the athletic apparel market

Under Armour has established significant brand equity within the athletic apparel market, recognized globally for performance-oriented products. As of 2024, the company's brand is associated with quality and innovation, which is reflected in its market position and customer loyalty.

Research and development capabilities for product innovation

Under Armour invests heavily in research and development (R&D) to drive product innovation. For the fiscal year 2023, Under Armour allocated approximately $80 million to R&D efforts, focusing on advanced materials and product technologies aimed at enhancing athletic performance.

Distribution network including retail and online channels

Under Armour's distribution network is diverse, encompassing both physical retail locations and e-commerce platforms. In Q2 2024, net revenues from the direct-to-consumer channel amounted to $595.8 million, representing a 3.2% increase compared to the previous year. The wholesale channel generated $939.7 million in revenue during the same period, reflecting the company's strong relationships with retailers.

Distribution Channel	Q2 2024 Revenue (in thousands)	Q2 2023 Revenue (in thousands)	Change ($)	Change (%)
Direct-to-Consumer	$595,847	$577,116	$18,731	3.2%
Wholesale	$939,725	$948,154	($8,429)	(0.9%)

Financial resources for marketing and operational investments

Under Armour maintains strong financial resources to support its marketing and operational investments. As of September 30, 2023, the company reported cash and cash equivalents totaling approximately $655.9 million. This financial position enables Under Armour to invest in marketing initiatives, product development, and expansion of its retail presence. In the fiscal year 2023, selling, general, and administrative expenses were reported at $606.2 million, reflecting a 2.0% increase from the previous year, driven primarily by increased marketing activities.

Financial Metrics	Q2 2024 Amount (in thousands)	Q2 2023 Amount (in thousands)	Change ($)	Change (%)
Net Income	$109,614	$86,925	$22,689	26.0%
Cash and Cash Equivalents	$655,900	N/A	N/A	N/A
Selling, General and Administrative Expenses	$606,236	$594,424	$11,812	2.0%

Under Armour, Inc. (UA) - Business Model: Value Propositions

High-quality performance apparel with moisture-wicking technology

Under Armour, Inc. is renowned for its high-quality performance apparel, particularly its moisture-wicking technology. This innovation helps to keep athletes dry and comfortable by drawing sweat away from the body. For example, Under Armour's net sales in apparel reached approximately $1,070.4 million for the three months ended September 30, 2023, reflecting a 3.1% increase compared to the previous year.

Products designed for athletes of all levels

Under Armour caters to athletes across all levels, from professionals to amateurs. The company’s diverse product range includes specialized gear for various sports and fitness activities. During the same period, net revenues from footwear were approximately $351.2 million, despite a 6.6% decline from the previous year. This indicates the brand's strong positioning in the athletic apparel market, appealing to a wide customer base.

Commitment to sustainability and social responsibility

Under Armour is increasingly focusing on sustainability and social responsibility as part of its value proposition. The company has launched initiatives aimed at reducing its environmental footprint and promoting ethical practices in its supply chain. As of September 30, 2023, Under Armour reported a commitment to sustainability goals, aligning with consumer demand for responsible brands. This strategic focus is part of their broader vision to differentiate themselves in a competitive market.

Innovative designs that blend style and functionality

Innovation in design is a cornerstone of Under Armour’s product offerings. The company continually invests in research and development to create apparel that combines style with functionality. For instance, Under Armour’s unique designs have led to significant brand loyalty, with direct-to-consumer sales reaching approximately $595.8 million in Q2 2024, marking a 3.2% increase from the previous year.

Value Proposition	Key Metrics
High-quality performance apparel	Net Sales: $1,070.4 million (3.1% increase)
Products for all athletes	Footwear Sales: $351.2 million (6.6% decrease)
Commitment to sustainability	Strategic Initiatives in Sustainability
Innovative design	Direct-to-Consumer Sales: $595.8 million (3.2% increase)

Under Armour, Inc. (UA) - Business Model: Customer Relationships

Engaging customers through social media and community events

Under Armour actively engages with its customer base through various social media platforms. As of 2024, the company has over 18 million followers on Instagram and approximately 10 million followers on Facebook. These platforms serve as a crucial channel for marketing campaigns, product launches, and direct interactions with customers. Under Armour hosts community events, including local fitness challenges and sports clinics, to strengthen brand loyalty and foster community engagement. For instance, in 2023, the company organized over 50 community fitness events across major US cities, attracting thousands of participants and enhancing brand visibility.

Loyalty programs to reward repeat purchases

Under Armour's loyalty program, UA Rewards, incentivizes repeat purchases by offering points for every dollar spent. As of 2024, the program boasts over 3 million active members. Members can redeem points for exclusive discounts, early access to new products, and personalized offers. In 2023, Under Armour reported a 25% increase in sales among loyalty program members compared to non-members, highlighting the effectiveness of this strategy in boosting customer retention and driving sales.

Customer service support for inquiries and feedback

Under Armour prioritizes customer service, providing multiple channels for support, including live chat, email, and phone support. In 2023, the company achieved a customer satisfaction score of 92% in post-interaction surveys. The average response time for customer inquiries was under 2 hours, demonstrating Under Armour's commitment to addressing customer needs promptly. Additionally, the company has implemented a feedback loop through social media and its website, allowing customers to share their experiences and suggestions directly.

Personalized marketing through data analytics

Utilizing advanced data analytics, Under Armour personalizes its marketing efforts to enhance customer engagement. The company analyzes customer purchase history and online behavior to deliver targeted marketing campaigns. In 2023, Under Armour reported that personalized marketing efforts led to a 30% increase in conversion rates for email campaigns. The use of customer data has also enabled the company to tailor product recommendations, with 50% of customers responding positively to personalized suggestions during their shopping experience.

Customer Engagement Metrics	2023 Data	2024 Projections
Instagram Followers	18 million	20 million
Facebook Followers	10 million	12 million
Active Loyalty Program Members	3 million	4 million
Customer Satisfaction Score	92%	95%
Average Response Time (hrs)	2	1.5
Conversion Rate Increase (personalized marketing)	30%	35%

Under Armour, Inc. (UA) - Business Model: Channels

Direct-to-consumer via branded retail stores and e-commerce

As of September 30, 2023, Under Armour reported direct-to-consumer (DTC) net revenues of $595.8 million for the three months ended September 30, 2023, representing a 3.2% increase from $577.1 million in the same period of 2022. For the six months ended September 30, 2023, DTC net revenues were $1.14 billion, up 3.8% from $1.10 billion in the prior year.

Wholesale distribution through various retail partners

In the wholesale distribution channel, Under Armour's net revenues were $939.7 million for the three months ended September 30, 2023, a slight decline of 0.9% compared to $948.2 million for the same period in 2022. For the six months ended September 30, 2023, wholesale revenues totaled $1.68 billion, down 3.3% from $1.74 billion in the previous year.

Digital marketing channels including social media and email

Under Armour has actively utilized digital marketing channels to enhance customer engagement. The company has leveraged social media platforms and email marketing campaigns to reach consumers directly. Specific financial metrics related to digital marketing effectiveness are not disclosed, but the overall increase in DTC sales suggests positive outcomes from these initiatives.

Collaborations with fitness influencers and athletes

Under Armour continues to collaborate with fitness influencers and professional athletes to broaden its market reach. These partnerships are integral to the brand's marketing strategy, contributing to brand visibility and credibility. The financial impact of these collaborations is reflected in the overall growth of the DTC segment, although exact figures for the impact of influencer marketing are not explicitly detailed in the financial reports.

Channel	Q2 2023 Net Revenues (in millions)	Q2 2022 Net Revenues (in millions)	Change (%)
Direct-to-Consumer	$595.8	$577.1	3.2%
Wholesale	$939.7	$948.2	-0.9%

Channel	6 Months Ended Sept 30, 2023 (in millions)	6 Months Ended Sept 30, 2022 (in millions)	Change (%)
Direct-to-Consumer	$1,140.1	$1,097.9	3.8%
Wholesale	$1,681.7	$1,739.8	-3.3%

Under Armour, Inc. (UA) - Business Model: Customer Segments

Athletes and fitness enthusiasts

Under Armour primarily targets professional athletes and fitness enthusiasts who seek high-performance gear. In 2023, Under Armour's net revenues from North America were $1,818 million, with a significant portion attributed to this customer segment. The company reported a gross profit margin of 48%, indicating strong demand and pricing power among its athlete-focused products.

Casual consumers seeking performance apparel

The casual consumer segment has been increasingly important for Under Armour. The company reported a 3.1% increase in apparel revenue during the three months ended September 30, 2023, highlighting the appeal of its performance apparel to everyday consumers. This segment is crucial as it diversifies Under Armour's customer base beyond just athletes.

Youth and school sports teams

Under Armour also focuses on youth and school sports teams, providing uniforms and equipment. This segment contributes to the company’s brand loyalty and market penetration at an early age. The company's revenues in the EMEA region increased by 9.3% to $287 million, partly driven by youth-focused initiatives and partnerships.

Global markets with a focus on North America, EMEA, and Asia-Pacific

Under Armour's global market strategy includes a strong focus on North America, EMEA, and Asia-Pacific. As of September 30, 2023, net revenues by region were as follows:

Region	Net Revenues (in thousands)	Change (%)
North America	$991,393	(2.0%)
EMEA	$287,091	9.3%
Asia-Pacific	$232,065	2.8%
Latin America	$53,669	(7.7%)

This geographic segmentation allows Under Armour to tailor its marketing strategies to different cultural preferences and purchasing behaviors.

Under Armour, Inc. (UA) - Business Model: Cost Structure

Manufacturing and production costs for apparel and footwear

The cost of goods sold (COGS) for Under Armour for the three months ended September 30, 2023, was $814.7 million, compared to $860.1 million for the same period in 2022, representing a decrease of 5.3%. The COGS for the six months ended September 30, 2023, was $1.524 billion, down from $1.579 billion in the previous year.

Marketing and advertising expenses

Under Armour's selling, general and administrative expenses, which include marketing costs, reached $606.2 million for the three months ended September 30, 2023, up from $594.4 million in the same quarter of 2022, marking a 2.0% increase. Marketing costs alone increased by $11.5 million or 8.0%, accounting for 9.9% of net revenues during this period.

Operational costs including logistics and distribution

Operational costs associated with logistics and distribution are included in the COGS and selling, general and administrative expenses. The outbound handling costs, which are part of these operational expenses, amounted to $20.7 million for the three months ended September 30, 2023, compared to $20.2 million for the same period in 2022. The total operational costs for the six months ended September 30, 2023, were driven by increased expenses in distribution and selling, partially offset by lower freight costs due to improved supply chain efficiencies.

Administrative expenses related to corporate functions

Administrative expenses for corporate functions are included in the selling, general and administrative expenses. For the three months ended September 30, 2023, these expenses were $606.2 million, reflecting a slight increase compared to $594.4 million in the prior year. The increase in administrative expenses was driven by higher salaries and facility-related costs, offset by lower legal and consulting expenses.

Cost Category	Q3 2023 (in millions)	Q3 2022 (in millions)	Change ($ millions)	Change (%)
Cost of Goods Sold	814.7	860.1	(45.4)	(5.3)
Marketing Expenses	11.5 (increase)	—	11.5	8.0
Outbound Handling Costs	20.7	20.2	0.5	2.5
Administrative Expenses	606.2	594.4	11.8	2.0

Under Armour, Inc. (UA) - Business Model: Revenue Streams

Sales from apparel, footwear, and accessories

For the three months ended September 30, 2023, Under Armour reported net sales of:

Category	Net Sales (In thousands)	Change ($)	Change (%)
Apparel	$1,070,437	$32,169	3.1%
Footwear	$351,202	$(24,683)	(6.6%)
Accessories	$113,933	$2,816	2.5%
Total Net Sales	$1,535,572	$10,302	0.7%

For the six months ended September 30, 2023, total net sales were $2,821,764, a decrease of $16,016 or 0.6% compared to the same period in 2022.

Direct-to-consumer sales through e-commerce and retail

Direct-to-consumer (DTC) sales for Under Armour showed a notable increase:

• DTC net revenues increased by 3.2% to $595,847, compared to $577,116 for the same quarter in 2022.
• For the six months ended September 30, 2023, DTC sales totaled $1,140,081, up by $42,141 or 3.8% year-over-year.

Licensing revenues from third-party manufacturers

Under Armour's licensing revenues experienced a decline:

Period	License Revenues (In thousands)	Change ($)	Change (%)
Three Months Ended September 30, 2023	$28,646	$(4,477)	(13.5%)
Six Months Ended September 30, 2023	$53,718	$(7,540)	(12.3%)

The decrease in licensing revenues was primarily attributed to lower revenues from licensing partners in North America and Japan.

Subscription revenues from digital platforms and services

Corporate Other revenues, which include subscription revenues from digital platforms, reported:

Period	Corporate Other Revenues (In thousands)	Change ($)	Change (%)
Three Months Ended September 30, 2023	$2,492	$(13,000)	(83.9%)
Six Months Ended September 30, 2023	$8,240	$(15,664)	(65.5%)

This significant decline was largely due to reduced foreign currency hedge gains and lower performance from digital business opportunities.