Jordan Fuller, Zach Greene, Courtney Starzer

,
Pallavi Somani, Lifeng Wang

MAJOR STRATEGIC CHALLENGE :
Global Expansion

RECOMMENDED SOLUTION:
Enter European market through Foreign Direct
Investment (FDI) + retail and athletic
partnerships

and fashion needs GROWTH FACTORS: • lifestyle changes • active seniors • activity needs • attire trends Source: Freedonia Focus Reports: Athletic Apparel – United States . Athletic Apparel Industry INDUSTRY FOCUS: • provide sportswear for customer performance. comfort.Under Armour Primarily Competes in the U.S.

The Industry Consists of Many Companies with Similar Product Offerings BRANDS Nike Adidas Columbia Puma LuluLemon Patagonia ATHLETIC APPAREL X X X X X X ACCESSORIES X X X X X X PERFORMANCE APPAREL X X X - X X .

The Industry is Highly Competitive and Relatively Unattractive to Enter Bargaining power of buyers High HIGH Threat of Substitutes Intensity of Rivalry Low Bargaining power of suppliers Medium-High Medium Threat of New Entrants .

Under Armour Resources and Capabilities Valuable Brand Management Sponsorship Technology Engineers Shelf Space Stores Licensee Rare Stable Inimitable .

The Continued Strength of the Firm Depends on Competitive Advantages First Mover Innovative Solid Relationships with Retailers Marketing Strength High Quality Products Current Competitive Position: STRONG However… intense competition makes the company vulnerable .

Under Armour is Facing Three Major Challenges Corporate Challenges Footwear Line Development 1) Market Dominance by Nike 2)Negative Initial Reviews International Expansion Increase Direct Retail Presence 1) Low Brand Awareness abroad 1) Capital Intensive 2) Lack of managerial capacity 3) Uncertain of customer preferences 2) Labor Intensive .

International Expansion is the Most Important Challenge to Address Fast growing market segment Variety of popular sports in Europe Sponsorship deals with soccer and rugby clubs Nike losing apparel market share in Western Europe .

Three International Expansion Strategies Comparison Chart Pros Foreign Direct Investment (FDI) Cons Elevate brand image Lack of local knowledge Partnership Local knowledge supply Dependence on counter party Licensing Prior success experience Limited expansion potential .

The Key to Success Athletic and Retail Partnerships Madrid Barcelona London Tottenham Hannover Frankfurt Rome Lisbon .

Our Game Plan Across the World 2013 Europe 2014 Asia & Brazil Sponsorship Flagship Stores World Cup Campaign 2015 Rugby World Cup Product Innovation Product Modification 2016 Emerging Markets Utilize Previous International Experiences .

Projected Tangible and Intangible Results Financials: $886 Million Revenue $58 Million Net Income Product Line: New Innovations for New Markets Brand Image: Superior Performance Wear .

Appendix Begins So does a new chapter of Under Amour Inc. International .

313 -894 3.45% 79.561 301.850 100.4970926 0.52% 18.927 533.36% 290.45% 24.4840386 0.974 13.087 20.767 -3.810 -2.0866491 0.5013689 0.1065143 6 0.81% 183.67% 20.063.349 -305 7.002737 0.0011015 0.85% -10.221 18.862 59.65% Gross profit Selling.72% 130.900 31.108 35.175 69.0033450 9 0.948 278.485 56.044 218.0021223 0.37% 72.90% 1713.5262517 7 2 6 9 7 4 9 7 6 4 7 0.633 76.3559471 4 3 5 7 Provision for income taxes(1) 0.0498011 0.51% -13.70% 36.0995701 0.02% 48.37% 152.919 68.420 856.31% 77.0014015 0.774 9.472.11% 181.558 38.739 1.70% 81.19% 50.3815943 0.273 -2.3735146 0.98% 32.064 156.50% 12.0191823 0.044 36 96. general and administrative expenses 1 1 1 1 1 1 1 1 1 1 1 0.719 16.517 430.991 3.49% 37.153 -1.550 26.0016531 7 0.457 712 59.77% 28.384 7.10606 8 8 -0.507 418.852 354.0862336 0.23% 19.1225893 9 9 2 0.83% 51.908 10.0154571 0 0 0 0.0601505 9 0. general and administrative expenses 34.48% 132.62% 42.3565274 2 7 7 1 5 5 0.5159613 0.19% 51.3930269 0.78% Income before income taxes Provision for income taxes(1) 44.0905038 0.0471619 8 2 0.355 -2.0546291 0.419 653 3.4986310 0.0870433 0.418 35.77% Income from operations Interest & other expense.043 36. net 44.0795492 0.35% 42.0962365 1 0.0466879 0.5211119 0.55% 29.433 70.26% 34.91% -21.244 370.265 749 2.1321556 0.918 1.255 25.0180424 0.04366 6 9 0.3793178 0.0380120 1 0.006253 0.37% 22.1467997 4 0.5313622 0.766 3.05% Percentage of revenue Net revenues Cost of goods sold Gross profit Selling.81% Statements of Income data: Net revenues Cost of goods sold Income before income taxes Provision for income taxes(1) Net income Growth rates -8.3684375 0.748 115.54% 46. net Income before income taxes 0.76% 10.684 759.1105240 5 0.APPENDIX – FINANCIAL PROJECTIONS (I) Raw data (In thousands.72% 15.1274136 0.296 606.94% 42.600 158.51058 0.38335 0.46% 126. general and administrative expenses 712.35% 28.4833607 0.32% 204.0378885 0.4389398 0.411 446.0643625 4 2 6 2 4 8 6 0.023 305.3527062 0.0172501 0.915 -79 32.24% 48.0002811 0.18% 53.925 -850 -6.841 -2.785 38.1371918 7 7 0.0407032 3 Net income 0.1056040 5 0.214 4.203 205.00851 0.0658111 0.0670513 0.5166392 0.0701611 0.258 -1.05271 0.84% 40.36% 16.84% 70.329 19.732 9.662 40.919 40.477 46.0558224 3 Income from operations Interest & other expense.84% 97.1422198 3 0.848 1.344 -511 82.42% 42. except per share amounts) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 1.682 135.5005932 0.4737482 3 8 4 1 3 6 1 3 4 6 3 0.836 550.0018244 9 1 5 .50% 17.55% 16.4994067 0.95% 151.38% -27.280 50.52% 22.35% 12.229 52.93% 145.0011072 0.5348838 0.953 -2.0690010 0.09% 19.5029073 0.1174377 0.4651161 0.178 108.1524427 3 0.757 49.96% 107.348 Gross profit Selling.1173230 0.1697243 4 9 1 0.671 86.0033829 5 0.152 410.322 5.77% 69.748 2.419 64.283 -226 24.0131786 0.709 23.34% 88.442 85.62% 168.1023745 1 0.0026082 0.053 145.48941 0.56% 58.0012348 3 0.37% 31.029 89.09638 0.13% 36.08% 41.84% 27.943 112.286 725.5610601 0.779 215.1542671 5 1 8 0.30% 123.181 109.008 Net revenues Cost of goods sold 38.64% 118.979 19.87% 31.089 281.17% 115.069 530.4788880 0.3425268 0.00117 0.3606875 0.50% 211.15% 13.125 324.81% 40.0416073 0.689 215.035 Income from operations Interest & other expense.040 95.22% 32.4686377 0.87% 58.89% Net income 41.0103717 -0.57% 20.0005967 0.70% 58.096 7. net 162.

APPENDIX – FINANCIAL PROJECTIONS (II) .

053 205.419 3.485 20.125 354.167 42.622 Gross profit Selling.682 100.719 16.785 38.507 410.662 23.384 550.060 246.087 32.245 330.825 251.943 108.048 21.748 64.344 -850 749 1.023 218.175 2.108 13.810 25.801 11.340 129.812 268.273 76.348 Gross profit Selling.553 35.285 46.900 89.043 59.029 712 -79 -226 Income before income taxes 156.044 1.420 446.946 15.457 1.443 11.290 41.184 28.992 31.594 2. except per share amounts) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Statements of Income data: Net revenues 885.974 24.882 34.943 12.396 30. general and administrative expenses 428.431 19.152 324.457 -2.408 222.153 Interest & other expense.232 21.908 7.684 1.860 9.483 11.296 301.633 31.872 515.850 95.757 26.915 -1.419 49.005 38.671 36.992 320.210 131.667 81.063.067 436.919 68.705 181.709 18.753 -772 -1.035 Income from operations 162. net -3.410 -511 450 876 -1.568 42.401 69.579 95.221 10.475 183.801 259.433 50.231 Income from operations 97.836 530.600 135.654 2.991 653 36 5.852 278.349 -2.537 15.953 4.739 3.966 6.014 -538 -183 -1.051 24.979 19.435 60.280 40.265 51.418 69.660 213.322 7.748 2.056 1.972 4.329 66.128 Interest & other expense.411 725.241 -708 -307 -3.831 Provision for income taxes(1) 36.096 40.313 3.255 Net income 96.329 9. except per share amounts) 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Statements of Income data: Net revenues 1.492 4.766 3.220 428 -48 -136 0 0 0 Income before income taxes 94.809 393 22 .732 Cost of goods sold 759.848 533.283 -2.704 57.180 364.332 5.925 86.779 158.816 3.841 -2.027 169.472.286 370.372 4.892 67.374 167.507 49.214 -894 -305 7.461 129.573 51.550 19.835 5.040 53.358 -1.664 1.355 85.203 109.675 1.558 38.197 Net income 58.178 -511 -6.044 215.069 418.310 -1.919 82.831 14.487 195.032 123.093 7.689 281.360 87.862 Provision for income taxes(1) 59.867 Cost of goods sold 456.918 35.258 -2.477 46.948 305.341 65.610 23.536 19.517 215.229 52.064 -1.040 70.089 145. net -2.767 112.265 56.714 1.138 22.APPENDIX – FINANCIAL PROJECTIONS (III) (In thousands.008 Europe Projection (In thousands.561 430.416 29.323 21.469 13.927 856.442 35.709 639.181 115.774 9.268 24.718 319. general and administrative expenses 712.244 606.986 2.

International Expansion Strategies General Comparison Risk Time Cost Financial Cost Potential Profit Control High High High High High Partnership Medium Medium Medium Medium Medium Licensing Low Low Low Low Foreign Direct Investment (FDI) Low .

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