How Under Armour Gets To $10 Billion In Sales By 2025

Under Armour Inc (NYSE: UAA) was once one of the market's growth darlings, but the stock has taken a terrible turn over the past few years. On Thursday, Cowen analyst John Kernan laid out his five-step plan for Under Armour to win back Wall Street’s heart and reach $10 billion in annual revenue by 2025.

Under Armour’s international business and its footwear segment will be the keys to growing its cash flow, the analyst said (see Kernan's track record here).

Under Armour’s biggest uphill battle may be regaining customer and investor trust after dropping the ball in the past couple of years. Kernan proposes the following five steps the company can take to shift opinion:

• Focus on higher-quality North American sales and improving return on invested capital, which is currently the lowest among its peer group.
• Focus on merchandising speed and streamlining the supply chain.
• Be more strategic with Curry merchandise rather than flooding the market and focus on premium franchises, such as Threadborne.
• Take a strategic and unique approach to the women’s and lifestyle segments.
• Make digital sales the centerpiece of global expansion efforts.

Under Armour’s future may hinge on its ability to increase its international market share. Rivals Nike Inc (NYSE: NKE) and adidas AG (ADR) (OTC: ADDYY) each generate roughly $18 billion in international sales per year versus $1.2 billion for Under Armour.

Even with the roadmap for success, Kernan said it’s too early to get bullish on Under Armour. Cowen maintains a Market Perform and $18 price target for Under Armour.

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Photo courtesy of Under Armour.