Is Under Armour Getting Its Mojo Back?

Practice makes progress, and Under Armour Inc (NYSE: UAA)’s taking the classic sports mantra to heart.

The company’s weekend tease of its Curry 4 shoes demonstrated growth in game planning that could herald continued category wins.

“Even against a challenging backdrop, we see opportunity for Curry 4 to drive significant improvement in footwear for UA, as the company has incorporated learnings from [last year’s] missteps into this launch strategy, including a focus on scarcity, with fewer colorways and more exclusives,” Jefferies analyst Randal Konik wrote in a Monday note.

Curry 4 debuted in limited supply in China, Boston, Chicago and California and was well received ahead of its Oct. 27 global launch. Within hours, the product sold out in Chicago and remained in just one size in Boston.

“We think seeding the US market with an extremely limited supply of this product was smart ... generating buzz and demand for the impending wider release,” Konik wrote (see Konik's track record here).

At $130, Curry 4 is slightly less expensive than the $139.99 Curry 3, a margin Jefferies considers favorable to drive full-price sales.

Getting With The Times

Under Armour also demonstrated progress in delivering “more fashion-forward” products.

The firm launched its “Unstoppable Collection” last week exclusively at Dicks Sporting Goods Inc (NYSE: DKS) to better penetrate the trending lifestyle market. Jefferies was happy to see the brand, although limited in variety, was selling at full-price and that Dick’s had committed it to center-aisle prominence.

“We also liked the versatility of the assortment ... aligning with UA's goal to make the business less key-item driven and less weather reliant during the holiday season,” Konik wrote.

Jefferies maintains a Buy rating on the stock with a $28 price target. At the time of publication, Under Armour was trading at $16.73, down 1.7 percent off the open.

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Image Credit: By Concord (Own work) [CC BY-SA 4.0], via Wikimedia Commons