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

Under Armour, Inc. (UAA) has carved a niche in the competitive sports apparel market with its innovative approach and commitment to performance. This business model canvas outlines the key components that drive Under Armour's success, from its strategic partnerships with athletes and technology firms to its diverse revenue streams and deep customer engagement. Explore how Under Armour effectively combines cutting-edge design with a strong brand presence to meet the needs of athletes and fitness enthusiasts alike.

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

Collaborations with professional athletes and teams

Under Armour has established strong partnerships with various professional athletes and sports teams. These collaborations serve to enhance brand visibility and credibility in the competitive sports apparel market. Notably, Under Armour has partnerships with athletes such as Stephen Curry, who has a signature shoe line that significantly contributes to the company's revenue. In 2023, sales from the Curry brand alone reached approximately $200 million.

Licensing agreements for branded products

Under Armour engages in licensing agreements that allow external companies to produce and sell products under the Under Armour brand. As of September 30, 2023, licensing revenues decreased by $4.5 million or 13.5%, totaling $28.6 million during the third quarter, compared to $33.1 million in the previous year. This decline is attributed to lower revenues from licensing partners in North America and Japan.

For the first six months of 2023, licensing revenues were $53.7 million, down from $61.3 million during the same period in 2022, marking a decrease of 12.3%.

Partnerships with retailers for distribution

Under Armour partners with various retailers to distribute its products globally. In the most recent financial report, net sales from the wholesale channel accounted for approximately $939.7 million in the three months ending September 30, 2023, reflecting a slight decline of 0.9% compared to the previous year. The company continues to strengthen its direct-to-consumer channel, which generated $595.8 million, marking a 3.2% increase.

Engagement with technology firms for digital initiatives

Under Armour has partnered with technology firms to enhance its digital offerings, particularly in fitness and health-related applications. The MyFitnessPal platform, which was sold in 2020 but continues to provide revenue through licensing agreements, is a prime example of such initiatives. The company recognized approximately $1.9 million in revenue from contract liabilities related to digital subscriptions during the three months ending September 30, 2023.

Collaborations with suppliers for sustainable materials

Under Armour is increasingly focusing on sustainability, forming partnerships with suppliers to source sustainable materials. The company has committed to reducing greenhouse gas emissions and increasing the use of renewable electricity in its operations. Investments in sustainable material sourcing are seen in recent capital expenditures which totaled $84.1 million during the first half of 2023. These partnerships are part of Under Armour's broader strategy to align with consumer demand for environmentally responsible products.

Partnership Type	Details	Financial Impact
Professional Athletes	Stephen Curry partnership	$200 million in sales from Curry brand (2023)
Licensing Agreements	Decrease in licensing revenues	$28.6 million (Q3 2023)
Retail Partnerships	Wholesale channel sales	$939.7 million (Q3 2023)
Technology Firms	MyFitnessPal revenue	$1.9 million recognized (Q3 2023)
Sustainable Materials	Commitment to sustainability	$84.1 million capital expenditures (H1 2023)

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

Design and development of performance apparel and footwear

Under Armour focuses heavily on innovation in the design and development of its performance apparel and footwear. As of September 30, 2023, net revenues from apparel were $1,070,437,000, reflecting a 3.1% increase compared to the same period in 2022. Footwear revenues, however, saw a decline, totaling $351,202,000, a decrease of 6.6% from the previous year.

Marketing and promotional campaigns

Marketing expenses for Under Armour increased by $11.5 million, or 8.0%, during Q2 2023 compared to Q2 2022, reaching a total of $606,236,000 for the quarter. This represented 9.9% of net revenues, up from 9.1% the prior year. The company's promotional strategies are essential for maintaining brand visibility and customer engagement.

Supply chain management and logistics

Under Armour's gross profit margin improved to 48.0% in Q2 2023, up from 45.4% in Q2 2022, primarily due to supply chain efficiencies and lower freight costs. The reduction in logistics costs was a significant factor in enhancing profitability despite overall revenue challenges.

Retail operations and e-commerce platform management

For the three months ending September 30, 2023, Under Armour's direct-to-consumer sales increased to $595,847,000, up 3.2% from the previous year, while wholesale sales decreased to $939,725,000, a decline of 0.9%. This shift indicates a growing emphasis on e-commerce and owned retail operations.

Customer engagement through digital channels

Under Armour continues to enhance customer engagement through digital channels, with a focus on personalized experiences. The company's digital initiatives include mobile applications and online platforms that facilitate direct interaction with consumers, contributing to a reported increase in direct-to-consumer sales.

Key Activity	Q2 2023 Financial Data	Q2 2022 Financial Data	Change (%)
Apparel Net Revenues	$1,070,437,000	$1,038,268,000	3.1%
Footwear Net Revenues	$351,202,000	$375,885,000	(6.6%)
Total Marketing Expenses	$606,236,000	$594,424,000	2.0%
Direct-to-Consumer Sales	$595,847,000	$577,116,000	3.2%
Wholesale Sales	$939,725,000	$948,154,000	(0.9%)
Gross Profit Margin	48.0%	45.4%	+2.6%

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

Strong brand reputation and recognition

Under Armour, Inc. has established a strong brand reputation, characterized by its commitment to performance and innovation in athletic apparel and footwear. As of 2023, Under Armour's brand was valued at approximately $3.1 billion, reflecting its significant presence in the global sportswear market.

Innovative product designs and technologies

The company is known for its innovative product designs, which include proprietary technologies such as HeatGear, ColdGear, and UA HOVR cushioning. In 2023, Under Armour reported a 3.1% increase in apparel revenue, indicating strong consumer demand for its innovative products.

Extensive distribution network

Under Armour operates an extensive distribution network that includes direct-to-consumer channels such as its website and branded retail stores, as well as wholesale partnerships with major retailers. For the three months ended September 30, 2023, the company recorded net revenues of $1.57 billion, with a significant portion derived from its North America segment, which generated $991 million.

Skilled workforce and management team

Under Armour's success is supported by a skilled workforce and a strong management team. The company invests in employee development, contributing to an effective operational strategy. For the six months ended September 30, 2023, total selling, general, and administrative expenses were $1.19 billion, which includes costs associated with employee compensation and benefits.

Financial resources for investments and operations

As of September 30, 2023, Under Armour had approximately $655.9 million in cash and cash equivalents, providing a solid financial foundation for ongoing operations and capital investments. The company also maintains a revolving credit facility of $1.1 billion, which can be utilized for various operational needs.

Key Resource	Details	Financial Impact
Brand Value	$3.1 billion	Strong market presence drives sales
Innovative Technologies	HeatGear, ColdGear, UA HOVR	Apparel revenue increase of 3.1%
Net Revenues (Q3 2023)	$1.57 billion	North America segment: $991 million
SG&A Expenses (6 months)	$1.19 billion	Includes compensation and benefits
Cash and Cash Equivalents	$655.9 million	Supports operational continuity
Credit Facility	$1.1 billion	Available for operational needs

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

High-performance athletic gear tailored for various sports

Under Armour, Inc. offers a diverse range of high-performance athletic gear across multiple sports categories. For the three months ended September 30, 2023, net revenues from apparel reached $1,070,437 thousand, marking a 3.1% increase compared to the same period in 2022. Footwear revenues, however, saw a decrease to $351,202 thousand, reflecting a decline of 6.6% year-over-year.

Innovative moisture-wicking fabrics and technology

Under Armour continues to lead in innovation with its moisture-wicking technology, which is integrated into many of its products. The company's focus on technical fabrics supports its value proposition of enhancing athletic performance. This innovation is reflected in their marketing strategy, which emphasizes the benefits of their proprietary technologies, such as UA HOVR and UA Rush, designed to provide energy return and help with recovery.

Commitment to sustainability and ethical production

Under Armour is committed to sustainability, with initiatives aimed at reducing its environmental footprint. As of September 30, 2023, the company reported a 30% reduction in greenhouse gas emissions compared to 2020 levels. The company also focuses on ethical sourcing and production practices, ensuring that its supply chain adheres to established labor and environmental standards.

Strong community engagement through sports initiatives

Engagement with the community is a core aspect of Under Armour's business model. The company invests in local sports initiatives, contributing $1 million annually to support youth sports programs across the United States. This not only strengthens brand loyalty but also enhances its reputation as a socially responsible organization.

Personalized customer experiences through digital platforms

Under Armour leverages digital platforms to create personalized shopping experiences. The direct-to-consumer segment generated $595,847 thousand in revenue for the three months ending September 30, 2023, reflecting a 3.2% increase year-over-year. The integration of digital fitness applications, such as MapMyRun and MyFitnessPal, allows Under Armour to engage customers beyond the purchase, offering a holistic approach to fitness and wellness.

Revenue Type	Q3 2023 Revenue (thousands)	Q3 2022 Revenue (thousands)	Change (%)
Apparel	1,070,437	1,038,268	3.1
Footwear	351,202	375,885	-6.6
Accessories	113,933	111,117	2.5
Total Net Revenues	1,566,710	1,573,885	-0.5

Overall, Under Armour's value propositions are built around high-performance products, innovative technologies, a commitment to sustainability, community engagement, and personalized digital experiences, all of which cater to the needs of its diverse customer segments.

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

Direct engagement through social media and online platforms

Under Armour has leveraged social media and online platforms to engage directly with its customers. In 2023, the company reported approximately 4.5 million followers on Instagram and 1.5 million on Twitter, enhancing its outreach and customer interaction. The direct-to-consumer channel accounted for $595.8 million in net sales for the three months ended September 30, 2023, reflecting a 3.2% increase year-over-year.

Customer loyalty programs and rewards

Under Armour's loyalty program, UA Rewards, has been instrumental in fostering customer loyalty. As of September 2023, the program had enrolled over 1 million members, contributing to increased customer retention. The company emphasizes personalized rewards, which have been linked to a 15% increase in repeat purchases from members compared to non-members.

Personalized marketing and targeted promotions

In 2023, Under Armour invested heavily in personalized marketing strategies, utilizing data analytics to tailor promotions to specific customer segments. This approach has resulted in a 20% increase in conversion rates during promotional campaigns. The company reported that targeted email campaigns yielded an impressive open rate of 25%, significantly higher than the industry average of 15%.

Responsive customer service and support

Under Armour has made significant strides in enhancing its customer service capabilities. The company has reduced average response times to customer inquiries to under 24 hours, and 80% of customer service interactions are now resolved on the first contact. In the latest quarter, customer satisfaction ratings increased to 88%, reflecting the effectiveness of these improvements.

Community-building through sports events and sponsorships

Under Armour continues to strengthen its community ties through sponsorship of major sporting events and local athletic programs. In 2023, it sponsored over 300 events globally, reaching an estimated audience of 1.5 million participants. The company also reported a 10% increase in brand loyalty among consumers who participated in these events, highlighting the effectiveness of community engagement.

Metric	Value
Social Media Followers (Instagram)	4.5 million
Social Media Followers (Twitter)	1.5 million
UA Rewards Members	1 million
Net Sales (Direct-to-Consumer Q3 2023)	$595.8 million
Targeted Email Campaign Open Rate	25%
Customer Satisfaction Rating	88%
Sponsored Events in 2023	300+
Estimated Audience Reach of Sponsored Events	1.5 million

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

Direct-to-consumer sales through online store

In the fiscal year 2023, Under Armour's direct-to-consumer (DTC) net revenues amounted to $595.8 million, reflecting a 3.2% increase from $577.1 million in the same period of 2022. The DTC channel includes sales from the company's own online platforms and physical stores, which are crucial for brand engagement and customer loyalty.

Wholesale distribution through retail partners

Wholesale revenues for Under Armour totaled $939.7 million for the three months ended September 30, 2023, a slight decline of 0.9% from $948.2 million in the prior year. This segment remains significant, accounting for a substantial portion of Under Armour's overall revenue, although it has faced challenges due to market competition and changing consumer behaviors.

Brand and Factory House retail locations

Under Armour operates a network of Brand and Factory House stores, focusing on providing consumers with a direct shopping experience. The performance of these locations contributes to the overall DTC revenue, with owned and operated retail store sales seeing fluctuations influenced by broader economic conditions and consumer trends.

E-commerce platforms and mobile applications

As of September 30, 2023, Under Armour's e-commerce sales were noted as a key driver within the DTC channel, although specific figures for online sales were not disclosed separately. The company's mobile applications and online platforms have been integral in enhancing customer reach and facilitating a direct connection with consumers, particularly in a post-pandemic retail landscape.

Digital advertising and social media marketing

Under Armour's marketing strategies heavily utilize digital advertising and social media platforms. In Q2 2023, marketing expenses increased by 8.0% year-over-year, totaling $606.2 million. This investment in digital outreach aims to bolster brand visibility and engagement across various demographics, crucial for maintaining competitiveness in the athletic apparel market.

Channel	Net Revenue (Q2 2023)	Year-over-Year Change	Comments
Direct-to-Consumer	$595.8 million	+3.2%	Increased engagement through online and physical stores.
Wholesale	$939.7 million	-0.9%	Challenges due to market competition.
Brand/Factory House	Not disclosed	N/A	Contributes to DTC performance.
E-commerce	Part of DTC	N/A	Key driver within DTC channel.
Digital Marketing	$606.2 million (total marketing expenses)	+8.0%	Focus on social media and digital channels.

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

Athletes at all levels, from youth to professionals

Under Armour targets athletes ranging from youth sports participants to professional athletes. In 2023, the company reported net revenues of $991.4 million from its North America segment, which includes a significant portion from athletic wear purchases by professional and amateur athletes. The brand has established partnerships with various sports teams and leagues, enhancing its visibility and credibility among athletes.

Fitness enthusiasts and active lifestyle consumers

Fitness enthusiasts form a substantial customer segment for Under Armour. The company’s focus on performance wear appeals to consumers engaged in fitness activities. For the three months ended September 30, 2023, Under Armour reported a 3.2% increase in direct-to-consumer sales, amounting to $595.8 million. This growth is indicative of the rising trend in fitness and the increasing number of consumers adopting active lifestyles.

Sports teams and organizations

Under Armour supplies gear to various sports teams and organizations, which is a critical part of its business model. The company has secured licensing agreements and sponsorships with collegiate and professional sports teams, contributing to its brand recognition and market penetration. This segment is supported by the $28.6 million in licensing revenues reported for the three months ended September 30, 2023.

Outdoor and adventure sports participants

The outdoor and adventure sports market is another key customer segment for Under Armour. The company offers specialized products designed for outdoor enthusiasts, including hiking and trail running gear. In 2023, the overall apparel category generated $1.07 billion in net revenues, reflecting the appeal of performance wear for outdoor activities.

Fashion-conscious consumers seeking performance wear

Fashion-conscious consumers increasingly seek performance wear that combines style with functionality. Under Armour’s innovative designs cater to this demographic, enhancing its appeal. The company reported a gross profit margin of 48.0% for the three months ended September 30, 2023, showcasing its ability to maintain profitability while attracting fashion-oriented customers.

Customer Segment	Key Statistics	Revenue Impact
Athletes	Net revenues: $991.4 million (Q3 2023)	Significant portion from athletic wear
Fitness Enthusiasts	Direct-to-consumer sales: $595.8 million (Q3 2023)	3.2% increase from previous year
Sports Teams	Licensing revenues: $28.6 million (Q3 2023)	Supports brand recognition
Outdoor Sports Participants	Apparel category revenues: $1.07 billion	Reflects demand for outdoor gear
Fashion Consumers	Gross profit margin: 48.0% (Q3 2023)	Maintains profitability with stylish designs

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

Manufacturing and production costs

The cost of goods sold (COGS) for Under Armour, Inc. was $814.7 million for the three months ended September 30, 2023, compared to $860.1 million in the same period of 2022. For the six months ended September 30, 2023, COGS totaled $1.524 billion, down from $1.579 billion in 2022. This indicates a strategic focus on reducing production costs while managing inventory more efficiently.

Marketing and advertising expenditures

Under Armour reported selling, general and administrative expenses of $606.2 million for the three months ended September 30, 2023, an increase of 2.0% from $594.4 million in the same period of 2022. Within this, marketing expenses rose by $11.5 million, or 8.0%, contributing to a marketing cost that represented 9.9% of net revenues.

Research and development investments

While specific figures for research and development (R&D) investments were not disclosed, Under Armour emphasizes product innovation as a key component of its growth strategy. The overall increase in selling, general and administrative expenses suggests a commitment to R&D, particularly in enhancing product offerings to maintain competitive advantage.

Distribution and logistics expenses

Distribution costs include outbound freight and handling, which were reported at $20.7 million for the three months ended September 30, 2023, compared to $20.2 million for the same period in 2022. For the six months ended September 30, 2023, these costs were $39.1 million, slightly up from $38.1 million in 2022. This reflects a stable approach to managing logistics while adapting to changing market conditions.

Operating costs for retail and e-commerce platforms

Operating income for Under Armour was $145.8 million for the three months ended September 30, 2023, compared to $119.4 million in the same period of 2022. The retail and e-commerce segments are critical to this growth, with net revenues from direct-to-consumer channels increasing by 3.2% to $595.8 million. This performance indicates effective management of operating costs associated with both in-store and online sales platforms.

Cost Category	Q3 2023 (in millions)	Q3 2022 (in millions)	Change (%)
Cost of Goods Sold	$814.7	$860.1	-5.0%
Selling, General and Administrative Expenses	$606.2	$594.4	2.0%
Marketing Expenses	Increase of $11.5 million	—	8.0%
Distribution Costs	$20.7	$20.2	2.5%
Operating Income	$145.8	$119.4	22.0%

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

Sales of apparel, footwear, and accessories

Under Armour's net sales for the three months ended September 30, 2023, totaled $1,535.6 million, reflecting an increase of 0.7% compared to $1,525.3 million for the same period in 2022. Breakdown by product category includes:

Product Category	Q3 2023 Sales (in thousands)	Q3 2022 Sales (in thousands)	Change ($)	Change (%)
Apparel	$1,070,437	$1,038,268	$32,169	3.1%
Footwear	$351,202	$375,885	$(24,683)	(6.6)%
Accessories	$113,933	$111,117	$2,816	2.5%

Licensing revenues from third-party products

Licensing revenues for Under Armour decreased to $28.6 million during Q3 2023, down 13.5% from $33.1 million in Q3 2022. For the six months ended September 30, 2023, licensing revenues totaled $53.7 million, a decline of 12.3% from $61.3 million in the previous year.

Direct-to-consumer online sales

Under Armour's direct-to-consumer sales reached $595.8 million in Q3 2023, up 3.2% from $577.1 million in Q3 2022. For the six months ended September 30, 2023, direct-to-consumer sales were $1,140.1 million, an increase of 3.8% compared to $1,097.9 million in the same period of 2022.

Revenue from branded retail locations

Net revenues from owned and operated retail stores contributed to the direct-to-consumer segment, which saw overall growth. The North America region reported a decrease in retail sales, with total net revenues of $991.4 million for Q3 2023, down 2.0% from $1,011.8 million in Q3 2022, largely due to a decline in both wholesale and retail channels.

Subscription services for digital fitness applications

Under Armour's Corporate Other segment, which includes subscription revenues from its digital fitness platform, reported $2.5 million in Q3 2023, a significant decrease from $15.5 million in Q3 2022. For the six months ended September 30, 2023, this segment generated $8.2 million, down from $23.9 million in the prior year.