The constant flow of innovations such as ClutchFit is an outgrowth of the category strategies Under Armour has developed

The constant flow of innovations such as ClutchFit is an outgrowth of the category strategies Under Armour has developed

With abundant growth opportunities in the pipeline at Under Armour, the performance apparel, footwear and accessories brand has said it aims to look back on 2014 as a pivotal year in its diversification. And five of its business categories bringing diversity to its story are footwear, women's, connected fitness, direct-to-consumer and international.

Under Armour last week upped its full-year earnings and revenue outlook in what has been described by one analyst as "bullish" and a "positive catalyst".

The company expects revenue to range from US$2.98bn-$3bn, compared to its earlier guidance of $2.88bn-$2.91bn. The higher forecast, it said, was driven in part by increased confidence in its international and footwear businesses, where it has seen "strong execution and consumer response" during the front half of 2014.

But these numbers are not without precedent, CEO Kevin Plank said on the group's earnings call. He noted that back in 2007, net revenues grew 41% for the full year, and 38% in 2011, adding that the company's growth opportunities are "abundant". 

What is unprecedented, however, is the source of its growth, the new dimension these revenue drivers are bringing, and the confidence it provides that Under Armour's strategy is right and positions the brand well for sustainable growth, Plank explained.

Although the brand has been investing in its five growth drivers over the past several years, Plank believes Under Armour will look back on 2014 as "a pivotal year in our diversification, one where we built solid foundations in these newer businesses".

In the first six months of 2014, Under Armour's footwear revenues reached $223m - slightly less than the $239m recorded for the full year of 2012. This accomplishment, Plank said, was driven directly by "taking what's in our DNA as performance leader in apparel, and transferring that commitment to making all athletes better to our footwear".

With the successful launch of its SpeedForm Apollo running shoe at the start of this year, Under Armour believes it has made "a strong impression" with runners looking for technology footwear. And the brand intends to keep this momentum going.

Plank said the brand's SpeedForm Gemini shoe, which is set to launch in 2015, has the "potential to validate our technical credentials with an even broader base of running consumers".

The constant flow of innovations such as SpeedForm, as well as ClutchFit technology - a second-skin upper material that flexes under pressure, is an outgrowth of the category strategies Under Armour has developed.

"We are investing in these category strategies with a long-term focus and believe we will look back on 2014 as the year we transition from a company learning how to make great shoes into a truly disruptive voice in the global footwear market," Plank said.

Women's growth
Moving onto women's, Under Armour plans to reach out to the female consumer to better understand their fitness and performance needs.

For a long time, Plank said, athletic brands have recognised women as athletes and celebrated their exploits in the playing field, with tennis, basketball and volleyball. But the list of activities women now do is "exhausting" and includes kickboxing, pilates, yoga and mountain biking.

"We've built a large women's business and look at this next phase as a great opportunity to bring dimension to our brand outside of our core men's apparel business," he added.

Connected fitness
And the MapMyFitness (MMF) platform, which Under Armour acquired last year, is a "powerful vehicle" with potential to make these athletes better and help it better communicate with them, according to Plank. He added that consumers are engaging with the platform at "a level beyond what the company anticipated".

More importantly, he noted, the MMF acquisition has given Under Armour a platform to get "deeper into the conversation with potential technology partners around the intersection of proactive health and wearable technologies".

The company intends to enhance the MMF platform, adding capabilities in tracking, analysis, content and commerce, and enable it to talk to customers in a personal way. By year end, Under Armour hopes to have 30m registered users, with around one third from outside of the US.

According to Plank, Under Armour views direct-to-consumer not only as a source of revenue growth, but as its best opportunity to bring the brand to a new consumer. "We're being strategic about this enormous opportunity to bring the Under Armour brand to a much more diverse consumer," he told analysts.

Based on the amount of traffic the company is seeing on its mobile site, it is clear the opportunity to sell to its core young consumer, through his or her device, will be a "huge part" of Under Armour's strategy going forward, Plank said.

In addition, its ability to control the flow of product in-store is also enabling Under Armour to test elevated product offerings. The company aims to make sure the presentation of the brand in this retail space reflects the premium nature of its product and position.

Under Armour also sees opportunity in its global business. The performance apparel, footwear and accessories brand surpassed $100m in international revenues during the first six months of this year.

One key factor in Under Armour's international growth story is its ability to bring a broader mix of products to new markets such as the Philippines and Singapore than it could have done three or four years ago.

There are many elements to the investments Under Armour is making, Plank said, all of which "connect to help grow the overall pie".

"Connected Fitness will help drive our women's business. Footwear will help drive our direct-to-consumer business, and all four of these growth drivers will contribute to our overall global growth."