3 Reasons to Love Under Armour Inc's Management

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Logo: Under Armour.

Few companies can boast the kind of growth that Under Armourhas had in the last few years, and much of that growth can be attributed to the management decisions made by UA's top team. During CEO Kevin Plank's 19-year tenure, the company has flourished. Since the company went public in 2005, the stock has gained over 900%.

Most recently, the company raced ahead of Adidas to become the second largest athletic wear company in the U.S. Now, Under Armour is hungry for more and is seeking to continue proving itself inthe same market as behemoth competitor Nike .

While Under Armour's management team has performed well in the past, the company underwent some management changes towardthe endof 2014 in which multiple managers were moved to different divisions to bring their experience and expertise to different areas of the company. Through the transition, CEO Plank continued to reiteratewhere the company is going from here and what his newly formed team plans to achieve. As Plank said in a November filing about the management changes:

As we continue to introduce game-changing innovations and advance our goal to become the world's number one performance brand, it is critical that we evolve our leadership structure to ensure that we are maximizing opportunities for global growth and success.

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Here are three reasons why investors should continue to love Under Armour's management.

1. Plank is keeping the company innovative
Under Armour was started in 1996 by former University of Marylandfootball specials-teamscaptain Kevin Plank, who had been fed up withthe ineffectiveness of his cotton T-shirt during intense trainings. The company, which has become much more than just moisture-wicking shirts, continues to reinvent itself and capitalize on growing markets. An example of that innovation is how the company has recently made its name in the running shoe segment.

UA's new Speedform Gemini series. Image: Under Armour

Part of the management changes at the end of last year included making COO Kip Fulks, already successful in running UA's operations, the overseer of the footwear business.While the company grew revenues over 30% in the most recent quarter, the footwearsegment grew revenues by more than 50%.

The main reason for the footwear jump is that the company has been gaining massive momentum on its SPEEDFORM line of running shoes. The company has surprised the industry by getting greatreviews on this shoe line (for performance, not just style) and the new line of SPEEDFORM Apollo released in 2014 made waves inthe market, including a glowing review in Runners World magazine, which concluded "BOTTOM LINE:An exciting new shoe that's worth a look on race day." The more than 50% rise in year-over-year footwear revenues inthe most recent quarter shows that the company's bigger push into footwear now is working.

2. Acting globally
The change-up in management was not a "housecleaning" by any means, instead more of a reshuffling of talent. The majority of these changes will specifically affect how the company will continue its international growth. That will be a big deal in the next few years, because in the most recent quarter, international sales grew more than 90% year over year. Expect to see the company working hard to keep growing internationally, with international now accounting for less than 10% or revenue.

Former senior VP of North American sales Adam Peake, using his experience in helping the company grow so quickly in the U.S., has now moved to the role of head of global marketing. He'll be working side by side with the already successful president of international business, Karl-Heinz Maurath.

This push into global is one way the company can continue to see massive growth for some time to come. Plank noted, "Our International business will still be less than 10% of our total revenues for 2014, and we foresee a day where it is at least half our business." While the company is only reporting guidance of a modest 12% of total revenues coming from international sales in 2015, expect that number to be much higher in the coming few years if this management team can keep getting growth rates like that of the last quarter.

Plank isadamantthat his companywill continue to follow trends and innovatewherever it can, and continue to place itself in front of customers in a meaningful way. That's why the company decided to recently release its own fitness tracking app to compete with Nike+. The app, which follows UA's purchase of the popular fitness app MapMyFitness in 2013, allows users to track their fitness using multiple brands of physical trackers (like jawbone, fitbit, etc). Additionally the company has partnered with HTC for what is expected to be a completely new fitness-tracking hardware device to go along with the app.

It won't be surprising if Under Armour, already working on smart clothing thatincorporates more technology into active wear, starts taking big bites out of Nike's digital fitness market share based on its Nike Fuelband and related technology.


Under Armour is breaking into the fitness app space. Photo: Under Armour

Looking ahead to 2015
Going forward into 2015, expect the Under Armour leadership team to keep fighting hard to grow this brand in innovative ways. While the 30% growth in revenue that the company reported last quarter probably can't hold indefinitely, the company's guided 22% revenue growth year over year in 2015 would still be well ahead of the industry.

The article 3 Reasons to Love Under Armour Inc's Management originally appeared on Fool.com.

Bradley Seth McNew has no position in any stocks mentioned but doesrun in Under Armour Speedform shoes (and loves them). The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.