What Investors Need to Know About Under Armour's Global Retail Footprint

For Under Armour (NYSE: UA) (NYSE: UAA), the international and direct-to-consumer businesses make up key growth opportunities for the sports apparel company.

And during a 2015 investor day presentation, Under Armour laid out a strategy for its global retail footprint. Let's check in on what the company said, where it stands today, and how the company is tracking.

Ambitious goals

In Sept. 2015, Under Armour shared a growth strategy for all facets of the business, including its global retail brick-and-mortar presence. The company aimed to open 80% of its retail stores abroad with over 1,000 Under Armour branded stores in over 40 countries.

At the time, this was an audacious goal given where the company stood at the end of 2014. Below is a comparison of the different components of the company's branded retail strategy that was laid out during the investor day.

Aggressive goals like the ones above were what investors had come to expect from the company, but that was before a string of U.S. retail chain bankruptcies and the end of Under Armour's 20% revenue growth streak.

Where is Under Armour today?

Three years later, investors are probably wondering where the company currently stands in relation to its goals.

Well, as I explained previously, the company shares only limited details behind the direct-to-consumer business. Investors have to play detective to determine how far along the global retail footprint has come. The most recent quarterly press release provides details on company-owned stores, shown in the table below. You can see that store count growth appears to be on track.

 Region June 30, 2016 June 30, 2017 Growth
International total 52 89 71%
North American total 160 179 12%
Overall 212 268 26%

Under Armour also indicates in its annual 10-k report that it leases space for brand and factory house stores in the U.S., Canada, China, Chile, and Mexico. But those aren't the only countries where Under Armour has branded stores. There are 33 countries where the company lists a brand or factory house store in the store locator tool on its website. Since these stores aren't accounted for as leased space by the company, they're likely partner locations.

Details on these partner store numbers are sparse, but CEO Kevin Plank shared that the company will "end this year with 940 stores globally" in an interview at the Goldman Sachs Global Retailing Conference earlier this month. This count would certainly put the company in range of its 1,000 store goal for 2018 -- and close enough to the 20% company-owned store percentage using the available numbers.

But even as store count rises, Plank has been dropping hints that the company may be pulling back on its aggressive expansion.

Already pulling back?

Later in the Goldman Sachs presentation, Under Armour CFO David Bergman added some color to the company's retail plans with an emphasis on digital efforts:

These comments lead me to believe that the company has pivoted its strategy since the 2014 investor day. Greater e-commerce capabilities are taking the place of a brick-and-mortar footprint. This approach syncs with the company's current retail state in France. Although France was named in the investor day presentation as a 2016 priority for brand store expansion, it currently doesn't have a brand or factory store but does have a country specific e-commerce site.

With international growth up 57% and direct-to-consumer up 20% in the most recent quarter, it's good to see that Under Armour is still making adjustments to its brick-and-mortar plans. In this case, that means approaching the 1,000 store benchmark, while prioritizing digital as a bigger part of its direct-to-consumer business going forward.

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Brian Withers owns shares of Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool owns shares of and recommends Under Armour (A Shares) and Under Armour (C Shares). The Motley Fool has a disclosure policy.