Nike can face the threat from emerging players like Under Armour in the female sportswear market

The stock returns for the company are small in comparison to competitors despite substantial
growth in revenues.
Fashion trends are transforming from leisure to athletic-leisure and forcing companies like Nike
and Under Armour to innovate their apparel and footwear products.
Unlike Under Armour, the company is unable to develop a comprehensive marketing campaign
for female sportswear segment.

Nike (NKE) is considered a leading footwear and apparel manufacturer in U.S. as evident from its
revenue growth; revenues grew 7.5% over the quarter to $7.98 billion in Q1 FY15. The footwear and
apparel segments contributed more than 86 % to the net revenues and exhibited 15 % year-over-year
growth. The companys revenues have consistently grew over last five years by 7.89 % annually from
$19.01billion to $27.80 billion. Despite companys notable performance, the results failed to fascinate
investor to invest in Nikes stock.

Source: Nike, Under Armour

In comparison, Under Armour has been successful in gaining investor confidence as it outruns Nike in
reference to stock returns by 34.92 % for the current year. The reason for investors confidence on
Nikes competitor was the exceptional double-digit growth in revenues over last years. Under Armour,
market share is steadily growing even in the presence of established brands like Nike and Adidas
carrying a large pool of loyal customers. Nike seems to be least concerned about its potential competitor
who recently took over Adidas place as second leading global sports apparel and footwear brand.
According to market researchers, Under Armour has been successful in making a dent in its peers
market share since companys IPO in 2005.

Source: Yahoo finance

Nike battles against new emerging players in growing female sportswear market
Fashion trends have significantly transformed from leisure to athletic-leisure; female are now choosing
sweatpants over denim and men are favouring hoodies and sneakers over formal wear. In the advent of
increasing demand for low-performance athletic wear, the company is facing stiff competition from
small players in the footwear and apparel market.
The company opened a new store exclusively for female in an attempt to embrace and seize the female
athleticwear demand.The 6,000 square-foot retail store in Newport Beach offer dedicated services to
female community along an array of company products. The companys marketing plan of showcasing
top-ranked female athletes to introduce a new collection was satisfactory.
The company is expanding its global retail network by 4.10 % over last six years in addition to femaleonly stores to seize high margins in female footwear and apparel segments. Currently, Nike documents
$18 out of $100 revenue for female apparel segment cumulating $5 billion over a year. The primary aim
is to increase the share of female sportswear segment to 40% of the total revenues.

Source: Statista.com

Under Armour successful marketing campaign aimed at females sportswear

Under Armours CEO, Kevin Plank is confident about the marketing campaign with slogan WILL WHAT I
WANT which seeks to motivate females to overcome barriers and accomplish their respective dreams.
Kevin Plank is enthusiastic about gaining success by leveraging partnership among female athletes
success stories and the companys brand name. The direct-to-customer retail network and e-commerce
optimisation can further boost Under Armours revenue growth. The web traffic is increasing, and 70
percent increase in a number of new customers can contribute to female sportswear segment growth.
Growth prospects in Global apparel market
The global apparel industry is expected to grow from $152 billion to $171 billion up until 2017.
According to SBRnet, female participation has been growing in numbers over years irrespective of any
physical or sports activities participation. The growing female disposable income, popularity of
performance wear and female involvement in physical activities is contributing to high market growth.

Source: Statista.com
The female appetite for fashion sportswear has been forcing brands like Nike and Under Armour to
innovate their respective products along the lines of comfort and style. If Under Armour aggressively
continues to pursue niche female sportswear market, Nike can struggle with maintaining an image of
leading sports apparel manufacturer.
Cumulating the trends and Nike attitude towards female sportswear segment
The companys management leisure attitude in grasping market trends for performance wear indicate
lack of long-term planning. The company was anticipating $7 billion female segment sales by 2017, and
now it seems slight of the course in reference to companys progression in female sportswear market.
The present-day strategies are not reflecting any significant measures to counter Under Armours
initiatives for female sportswear particularly in emerging markets. The rat race between Nike and

Under Armour for female sportswear market share can continue for an extended period. However, Nike
is currently following the emerging player rather than setting trends for new entrants to the market.
Despite unique and critical partnerships it appears the company can be facing difficulty in maintaining a
leading brand image. In the context of the prevailing scenario, investors should hold their position in
companys stock.