How Big Is Under Armour's Women's Biz Opportunity?

Oppenheimer’s Anna Andreeva mentioned that growing its women’s business was a crucial part of Under Armour Inc UA's $7.5 billion revenue goal and the company “becoming a global athletic brand.”

The analyst maintained a Perform rating on the company.

Growing The Women’s Categories

Under Armor has mentioned its women’s business would grow to be as big as its men’s segment, which is currently estimated at twice the women’s business at $2.2 billion.

Andreeva believes the women’s segment grew at a robust CAGR of 19 percent over the last five years. However, following the opening of 100 new stores annually, on an average, and with several new entrants in the category, the “marketplace is quickly becoming saturated.”

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Although Under Armor’s women’s apparel is priced lower than that of Nike Inc NKE and Lululemon Athletica inc. LULU, the analyst state Under Armor was lacking “must-have trends which makes brand equity the deciding factor.”

Andreeva also pointed out, “As competition heats up in highly fragmented market, NKE and LULU's women's goals embed some moderation from recent history while UA's don't appear to.”

Women’s Business Slowing?

On the other hand, Andreeva also noted Under Armor’s domestic women’s apparel segment might have grown only in the mid to high single digits in 4Q15, as compared to the earlier mid to high teens growth.

According to the Oppenheimer report, “This marks second consecutive quarter of women’s apparel domestically growing less than US retail sq ft growth—implying negative store comps in women’s.”