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Will a New Global Strategy Lift Under Armour (UA) Stock?

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Under Armour Inc (NYSE:UA) is taking its game to the next level, with plans to expand its international division. With Under Armour stock up more than 27% on the year, a meaningful push abroad could drive shares even higher from here. Let’s take a closer look at where the athletic-apparel stock is trading today, and where it could go in the quarters ahead.

Under Armour Inc (NYSE:UA)

Going global
On Wednesday, Under Armour Inc (NYSE:UA) will kick off its 2013 Investor Day in Baltimore, at which investors hope to gain more clarity on the company’s future global plans. In the United States, Under Armour is a household name. However, larger rivals including NIKE, Inc. (NYSE:NKE) and Adidas overshadow the brand in international markets such as Europe.

In fact, international sales made up just 6% of Under Armour Inc (NYSE:UA)’s total revenue last year. NIKE, Inc. (NYSE:NKE), on the other hand, generates about 59% of its sales outside the United States, according to The Wall Street Journal. There is a clear opportunity here for Under Armour in markets outside the United States. However, up to this point, the performance-apparel company has been focused on boosting its brand’s appeal on the homefront.

Covering its bases
In addition to launching a global marketing campaign earlier this year, Under Armour Inc (NYSE:UA) has also put more emphasis on its women’s-apparel business, including updates to its Studio yoga line, which is meant to directly compete with luxury yoga-apparel retailer Lululemon Athletica inc. (NASDAQ:LULU).

What’s more, Under Armour took advantage of Lululemon’s recent recall blunder by running aggressive ad campaigns targeting Lululemon customers. For example, an ad for Under Armour Inc (NYSE:UA)’s line of yoga pants included the tag line “We’ve Got You Covered” — after Lululemon was forced to recall 17% of its luon yoga pants for being too sheer.

Nevertheless, it will take more than clever marketing to give Under Armour a leg up over competitors such as NIKE, Inc. (NYSE:NKE) and Lululemon. True, Lululemon doesn’t have Nike’s deep pockets or Under Armour’s marketing budget. However, it does have a cult-like following in the niche market of yoga-apparel. Here’s a look at how Under Armour stock has performed year to date against such competitors.

UA data by YCharts

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