Under Amor vs Nike

Topics: Financial ratio, P/E ratio, PEG ratio Pages: 3 (788 words) Published: October 28, 2013
From: Adam, Under Armour Junior Analyst
To: Kevin A. Plank, Under Armour Chairman, President, and CEO Date: December 18, 2011
Subject: Under Armour’s Strong Financial Performance from 2008 to 2010 In order to help Under Armour acknowledge its position within the sport apparel and gear industry, I researched and constructed an analysis of the company’s financial performance from 2008 to 2010. Over the last three years, Under Armour posted a strong financial performance. From 2008 to 2010, the company had a significant growth in net income, an increasing trend in earning per share, and a strong quick ratio (Under Armour, 2011). In addition, Under Armour’s stock (UA) has also been performing well in the last twelve months; however, the Price Earnings ratios over the period were unstable due to the rough stock price-line (Stock Information, 2011). Furthermore, the report will compare Under Armour with one of its main competitors, Nike, Inc. (Under Armour, 2011). Under Armour’s Financial Performance

Significant Growth in Net Income
Over the last three years, Under Armour’s (UA) net income has grown significantly. From 2008 to 2009, UA’s net income increased 22.4 percent from $38 million to $47 million (Under Armour, 2011). Following that trend, the company’s net income grew 46 percent to $68 millions in 2010 from $47 millions in 2009 (Under Armour, 2011). Compared to Under Armour, from 2008 to 2009, Nike Inc.’s net income experienced a larger increase, 28.2 percent; however, it increased only 11.8 percent from 2009 to 2010 (Nike, 2011). As illustrated in figure 1, although Under Armour’s net income performed poorer comparing to Nike in 2009; the company’s 46 percent increase in net income outperformed Nike’s, which was only 11.8 percent in 2010 (Under Armour, 2011; Nike, 2011). The sturdy increase in UA’s net income led to an increasing trend in the company’s earnings per share.

Figure 1: Comparison Between Under Armour’s and Nike’s Net Income Growth...

References: Nike, Inc. (2011). Nike, Inc. Annual Report 2011. Retrieved from http://investors.nikeinc.com/Investors/Financial-Reports-and-Filings/Annual-Reports/default.aspx
Stock Information. (2011). Investor Relations – Under Armour. Retrieved from http://investor.underarmour.com/stockquote.cfm
Stock Information. (2011). Investor – Nike, Inc. Retrieved from http://investors.nikeinc.com/Investors/Stock-Information/Historical-Price-Lookup/default.aspx
Under Armour (2011). Under Armour annual report 2011. Retrieved from http://investor.underarmour.com/annuals.cfm
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