If you ever wondered how long Under Armour (NYSE: UA ) would be able to maintain its current torrid pace of growth, the company's founding CEO Kevin Plank wants you to know they're only just getting started.
More specifically, on Wednesday Plank told shareholders at Under Armour's investor day presentation in Baltimore to expect full-year sales to reach $4 billion by 2016. For those of you keeping track, that would represent a 21.6% annualized growth rate from Under Armour's 2012 sales of just $1.83 billion.
Of course, considering the young company just wrapped up its 12th consecutive quarter of least 20% top-line growth, there's plenty of reason to believe Plank knows what he's talking about.
"The biggest opportunity"
So how, exactly, does he intend to meet this ambitious goal?
Remember, as I noted when I bought more shares of Under Armour for my personal portfolio in April, international revenue accounted for just 7% of the company's total sales last quarter. What's more, in the three prior years, domestic growth actually outpaced international, which made up only 6.2%, 6.1%, and 5.9% of the total in 2010, 2011, and 2012, respectively.
Compare that to Nike's (NYSE: NKE ) brand sales, for which international markets made up more than half of last quarter's nearly $5.6 billion in revenue, and it becomes easy to see just how much potential the rest of the globe holds.
That's why Plank is finally calling international "the biggest opportunity" for his company, and why they're currently planning to open 10 more offices abroad. In fact, by the end of 2013, he claims, Under Armour should have more offices internationally than in North America.
Hit the ground running
Naturally, Under Armour won't waste any time using the added exposure, pushing hard to penetrate Nike's bread-and-butter footwear segment, which itself offered more than $3.6 billion in revenue for the industry behemoth last quarter alone. Considering the global athletic footwear market is currently worth around $70 billion, of which Under Armour only mustered a paltry $81 million last quarter -- even after growing the segment's revenue 27% year over year -- there's certainly plenty of market share ripe for the taking.
Curiously enough, you can bet Nike has taken note of the threat, as Under Armour filed a lawsuit against the Oregon-based company. In the suit, Under Armour claimed Nike was illegally using Under Armour's trademarked "I will" catchphrase in recent marketing campaigns to purposefully create confusion between the brands.
Perhaps unsurprisingly, Nike responded to the suit just last month with some harsh words for its smaller competitor, claiming the "I will" phrase is "not famous" and has yet to acquire "the distinctiveness or secondary meaning associated with Under Armour." Besides, Nike said, "To the extent Under Armour owns any alleged trademark rights in the phrase, 'I will,' those rights are weak [and] narrow, and exist in a crowded field."
Unfortunately for Nike, Under Armour's latest move is about to make the global field a whole lot more crowded than it already is.
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