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Having doubled off its lows and trading at 11x EBITDA, UA is admittedly not cheap. But the top line growth is there - esp in shoes as outlined herein. Margin oppty is being realized, and capital intensity is coming down. Don't underestimate this one.

I'm still amazed by Wall Street's myopic nature associated with Under Armour's presence and opportunity with its new footwear initiative. People hear management's comments on the conference calls and conferences and get so hyper-focused around a few hundred thousand pair here or there. Let's put some numbers into perspective.

If we take the running category alone, and assume a rate of daily sell through averages at less than one pair of shoes per day at a conservative list of major retailers, then it gets us to $65mm in annual sales along at a $40 wholesale price point.  This suggests about 8-9% market share for UA in the running category at these retailers. Could I argue 2 pair per day on overage over the course of a 12-month time period? Yes, not unreasonable by any means.

This does not include basketball, outdoor, or any form of casual footwear whatsoever. You could take that $65mm number, and multiply it several times over into new categories. Therein lies my assertion that it is not tough at all to get to $300mm in footwear revenue in 2-3 years (40% growth over today's sales base).  Furthermore, this would put UA at half the market share run-rate of the likes of Adidas, New Balance, and Asics. Ironically, it puts it right in line with Reebok (which is a mess).

If I'm going to place my bet on which brand will pierce the 10% share barrier next, it's going to be UA.

UA: Bottom Up Shoe Math - ua