Under Armour Inc (UA)’s Key Question: Can Nostalgia Keep It on Top?

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Unpredictable Adidas

Adidas isn’t quite as predictable as Nike and Under Armour Inc (NYSE:UA), making investors hesitant to choose it. The stock tends to fluctuate. Last year, Adidas’s earnings were down, hurt by the end of Adidas’s licensing agreement with the NFL to sell jerseys, which was picked up by Nike.

The stock is down 7% below its 52-week high of $52.92. The company is rallying, though, and is on track to earn approximately $20.3 billion this year, up from about $14.9 billion last year.

Adidas recently verbalized confidence that it would reach its goals for 2015, leading to a slight gain in stock value. Die-hard supporters see the company’s commitment to athletic wear for sports as a niche that will bring long-term success.

In other words, we may enjoy Nike’s tech gadgets or Under Armour’s synthetic compression shirts, but in the end, athletes are looking for sportswear that works. Under Armour Inc (NYSE:UA) and Nike can provide that, as well, but that news tends to get lost in all the flash.

All three companies are strong contenders in the sporting goods market, with longevity almost assured. Linking products to athletes, athletic teams, and even comic book characters can make a big difference in these companies’ success.

Nike, Under Armour Inc (NYSE:UA), and Adidas all will continue to vie for those valuable contracts, with each releasing the products that will win over their share of the market.

The article Can Nostalgia Keep Under Armour on Top? originally appeared on Fool.com and is written by Stephanie Faris.

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