Under Armour recently unveiled three new “record equipped” jogging shoes, which is located on pre-order starting January the coming year. The record equipped technology provides runners with digital tools necessary to understand recovery and maximize performance. These new shoes are an increase of the company’s smart shoe line, which was launched earlier this coming year. This collection of shoes will probably be linked to MapMyRun, under armour store mobile app which commands an individual base of 190 million globally . Based on our estimates, the footwear segment makes up about nearly 30% of Under Armour’s valuation along with its contribution for the company’s revenues is estimated to increase from around 20% in 2016 to just about 32% by the end in our forecast period. Because the company expands its connected fitness business by centering on its smart shoe offering, it can boost its footwear revenues and drive growth in the long run.
This past year, Under Armour invested nearly $560 million to acquire two fitness apps – MyFitnessPal and Endomondo. In late 2013 the business had acquired MapMyFitness for $150 million. These acquisitions gave it control over the world’s largest digital and fitness community, a community the organization is already seeking to leverage. The brand new shoes are powered exclusively by MapMyRun, Under Armour’s mobile app. Each shoe includes new features that may provide runners not only with automatic tracking capabilities, but also with insights within their muscular fatigue just before hitting the gym. With these initiatives, under armour online is focusing on its connected fitness goal which will probably drive revenues in the long term. In accordance with our estimates, the company’s retail footwear revenues may very well increase rapidly from around $300 million in 2016 to nearly $1.4 billion at the end of our forecast period.
We think innovation is likely to remain an integral element of the company’s growth. It may gain market share in the footwear segment as it focusses on innovative new items. We be aware that Footwear will not be the most valuable segment for Under Armour. The truth is, Performance Apparel makes up about nearly 50% of their valuation as outlined by our estimates. As a result, increase in retail footwear revenues will impact the company’s valuation moderately. For instance, if these revenues grow at the faster pace and reach $2 billion by the end of our forecast period, there might be a 5% upside to the price estimate.
Under Armour is increasing concentrate on its footwear segment, which is probably going to witness significant rise in revenues within the next number of years. Its connected fitness initiative can give the 17dexjpky insights into consumer behavior (according to data collected using the app), which may enable it to tweak its products according to consumer preferences. These under armour shoes sydney should find favor in consumers who wish to depart from wearables to observe fitness and workout trends. We believe this innovation can drive revenues for your company long term.