Sunday, July 15, 2018

Under Armour Suits Up For Stock Split

March 17th, 7:20 pm
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On Monday, Under Armour, Inc. (NYSE: UA) announced that the Board of Directors approved a two-for-one stock split.

The press release stated that the stock split will work as dividend, giving stockholders on record on March 28, 2014 one share of Class A Common Stock for each Class A Common Stock outstanding. Likewise, individuals owning one share of Class B Common Stock outstanding on March 28th will receive one additional share of Class B Common Stock. The additional shares issued will be distributed on April 14, 2014.

Chairman and CEO Kevin Plank commented, “Our team is proud of the value we have delivered to our stockholders over the long-term, and we believe this stock split may broaden our investor base and improve the trading liquidity of our stock.”

The announcement of the stock spit follows the continued momentum of the stock jump at the end of January with earnings releases, partnerships, product launches and global expansion of their brand. Under Armour formed partnerships with the University of Notre Dame, the U.S. Naval Academy, and Chile’s Colo Colo futbol team. On January 30, the company announced staggering fourth quarter and full year net revenues growth of 35% and 27%, respectively.

Following its earnings release, Under Armour issued a press release on the success of the SpeedForm Apollo running shoe unveiling. On CNBC, an Under Armour executive commented that SpeedForm is “one of the best, lightest, most efficient products under $100.”

With shares continuing to gain (sprinting in their new SpeedForm Apollo shoes), the company reported an eight year extension of its initial partnership with US Speedskating. According to the press release, Under Armour will remain as the National Team’s “exclusive competition suit provider though December 31, 2022.”

Analyst Sharon Zackfia from William Blair & Company (Outperform) remarked on the speed-skating uniform concerns from the Sochi Olympics. “There are times when every athletic manufacturer has run into issues.” Zackfia continued that despite concerns, “this hasn’t tarnished the brand.”

On March 12, Under Armour announced the launch of the company’s brand in Brazil. Founder and CEO Kevin Plank wrote in the press release that launching Under Armour in Brazil is a “critical step” in Under Armour’s plan for international expansion. The company’s Managing Director of Brazil Marcelo Ferreira commented, “As the nation prepares to host the world’s biggest sporting events, this is an exciting opportunity for Under Armour to identify with the passion Brazilians have for active lifestyles and to provide them with the most innovative performance products in the market.”

Zackfia referenced the company’s Analyst Day last year, noting that this move into Brazil was not unexpected. In the interview with Benzinga, the analyst emphasized the company’s goal to be more aggressive in South American expansion.

Under Armour went public in November 2005. The company’s last stock split was in July 2012.

Shares of Under Armour closed at $117.35 on Friday. The stock hit a new 52-week high on Monday morning following the stock split at $121.40.

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