The Future of Under Armour Inc. (UA): Bank of America Corp (BAC), Lululemon Athletica inc. (LULU)

Women are athletes, too
This may come as a surprise but, apparently, women are working out these days. I know — what a shock. Under Armour Inc. (NYSE:UA) has a long-term goal of generating 50% of its revenue from female athletes. That’s been a challenge for two big reasons. First, the company mainly sells though third-parties that often dedicate less space to women’s wear. Last year, 71% of sales were through distributors and, since only a third of sports apparel sales are in women’s, that category gets less floor space.

Under Armour wants to change that by opening more of its own locations. Those shops will have 50% of the floor dedicated to women, which should help drive new sales. Clearly, the company has learned something from Lululemon Athletica inc. (NASDAQ:LULU) about how much women will pay to workout. Lululemon Athletica inc. (NASDAQ:LULU) increased comparable sales by 18% last quarter, and its ability to continue driving people though the door must be intriguing to Under Armour as it sets out to expand its footprint.

The second factor that has made Under Armour a hard sell to women has been its product mix. Cleated shoes are still the company’s main footwear line, and neither baseball nor football are big women’s sports. On the apparel side, the company is only up to 30% of revenue going to women’s appare.l That would be about $415 million in revenue last year, which isn’t even $100 million more than Lululemon Athletica inc. (NASDAQ:LULU) made in one quarter last year. If that doesn’t scream potential, I don’t know what does.

The bottom line
I lied a second ago. The other thing that screams potential is this — Under Armour Inc. (NYSE:UA) only earned 6% of its revenue internationally last year. If it’s really going to compete with NIKE, Inc. (NYSE:NKE), then it has a long way to go on that front. Nike pulled in 56% of its revenue outside of North America last quarter.

Under Armour may have a lock on innovation, but it’s a long way off on sales. That’s a good thing, though — it means that there’s lots of room for growth. I like Under Armour’s brand, its plan, and its potential. This is one company with a very bright future.

The article The Future of Under Armour originally appeared on Fool.com.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica, Nike, and Under Armour. The Motley Fool owns shares of Bank of America, Nike, and Under Armour.

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