I’m always fascinated by the market share trends in the Compression category – the place where Under Armour made its mark. The key call out above all else is that despite virtually every brand placing a massive bulls-eye on UA’s back, its share has held in remarkably well at about 76% of the space (which is still growing double digit, by the way). Nike stands at about 17% -- which represents a 2-3 point gain from a year ago (on a ttm basis) – proving that Nike is the only brand that could give UA a run (or a jog) for its money in the compression arena. The two trade off share points rather consistently (See Exhibit 1), but UA still maintains 4.5x the share as Nike at a time when Nike will incrementally shift resources toward combating UA in footwear. Bottom line is that UA remains squarely in the pole position here.
Perhaps the biggest point is that no other brand has greater than 2% of this space. No kidding… Adidas and Reebok own the NFL license, and have some other incredibly valuable sports marketing assets in the US (Notre Dame, The Yankees, David Beckham, Yao/McGrady, etc…) – and have combined share of less than 1%. Is this a massive opportunity for Adidas? Yes. But it was an opportunity as well 3 years ago and its share has actually been cut in half during that time period. When an ‘opportunity’ remains present for that long, I consider it a ‘failure.’
Zach Brown/Brian McGough