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Industry analysis on UA

I would like to determine a more objective way for concluding industry growth for

Under Armour. So much of the time, growth rates are of speculative nature. Even

when they do have some detail, it uses basic qualitative methods that one wouldlearn in a intro marketing class. My goal is to determine, using econometric

modeling through excel, industry growth and profitability for UA.

Scanning through IBIS World industry reports, and the beurea of economic

analysis (bea.gov), the information is aggregated in a way difficult to come to

conclusions for sports apparel. Naics codes 31522 and 31523 consist of men and

women cut and sew apparel manufacturing. IBIS World has an industry report

titled Mens & Boys Apparel wholesaling in the US. Hopefully I can piece together

something.

The IBIS World industry report gives these stats for men and boys apparel:

$38.2bn; profit of $2.9bn; 1.8% expected annual growth between 2012 and 2017.

It is in a declining life cycle stage and a high level of competition.

According to IBIS, import penetration is large. This is confirmed by BEA.gov stats;

In year 2000 mens apparel manufacturing had gross sales of 16.4bn. As of 2010, it

had aprox 2bn. The discrepancy between the two sources is due to BEA reportingmanufacturing and IBIS reporting wholesaling. This is a statement from UAs

2012 10K: In 2010 73% of net revenues were from wholesale distribution

united state retail chains such as academy sports, dicks, hibbet, models, and

sports authority. 23% of net revenues came from direct consumer sales.

Sales Growth : A fuction of US demographics

While UA states they would like to move into foreign athletic apparel, they

currently sell 94% of their products to US consumers. Demographics in the United

States involve perfect information, unlike consumer taste. It is reasonable to

conclude that UA will not be able to sell much to grandmothers, the morbid

obese, and other demographics of people.

7/29/2019 UA industry analysis

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Demand determinant and consumer preference

Given that UA is in the clothing/fashion industry

Seth klarmin

Function of discretionary income

World sports apparel industry

GIA announces the release of a comprehensive global reporton Sports and Fitness Clothing market. The global sportsand fitness clothing market is projected to reach US$126.30billion by the year 2015, spurred by dramatic lifestylechanges, increasing sports participation particularly bywomen, and demand for stylish, functional and versatilesports apparel. In addition, with rapidly aging population,there is a definite emphasis towards healthy lifestyle andactivities such as sports, yoga and jogging. This, thereby,offers a strong business case for sports and fitness apparel,and is expected to play an instrumental role in drivingfuture growth.