- The Washington Times - Monday, January 2, 2006

A Baltimore sports apparel company’s stock rose 20 percent last week, continuing to climb since its initial public offering six weeks ago.

Under Armour closed at $38.31, down $1.55 on the Nasdaq Stovk Market Friday, the last trading day of the year. Dec. 26, the stock was trading at $31.22. U.S. stock markets were closed yesterday for New Year’s Day.

The company went public Nov. 18 at a price of $13 per share, closing that day at $25.30.

The two Wall Street analysts that cover the company, Credit Suisse First Boston and Thomas Weisel Partners, have positive expectations of the company.

Credit Suisse First Boston expects Under Armour’s earnings per share to nearly double from 50 cents to 95 cents in two years.

“Under Armour has developed a strong following with the important younger demographic and is poised to expand into women’s, international and other product categories,” research analyst Omar Saad said in a report. “The company is building a brand franchise that we think can generate 35 percent earnings growth over the next three to five years.”

Credit Suisse has a business relationship with Under Armour.

Under Armour’s product line centers on a blend of synthetic materials that when worn, pulls moisture away from the body to the outside of the shirt or pants, keeping the person cooler and drier.

It has contracts with many professional and college teams, helping propel sales to $205.2 million in 2004 from $115.4 million in 2003.

Former University of Maryland football player Kevin Plank founded the company in 1996.

Thomas Weisel Partners, a San Francisco investment firm that was the underwriter for the initial public offering, has a similar positive rating on the company.

“Over time, we believe Under Armour has the opportunity to grow the business in international markets and become a player in the athletic footwear, outdoor lifestyle and sporting goods equipment markets,” analyst Jim Duffy said in a report.

Credit Suisse points to Under Armour’s grass-roots marketing, performance reputation and professional athletes’ use of the clothes as part of the company’s success.

“Under Armour has become a must-have brand for school- and college-age amateur team athletes,” Mr. Saad said.

The company plans to expand into shoes, beginning to sell football cleats in the fall.

Part of the bump in the company’s stock price last week was attributed to positive recommendations from Jim Cramer, host of “Mad Money” and a Wall Street analyst on CNBC.

Analysts warn, however, that Under Armour is in a tight market, competing with giants Nike, Adidas and others.

“Should other brands gain popularity or demand for performance apparel products lose momentum in the market, Under Armour’s sales could suffer accordingly,” Mr. Duffy said.

Under Armour officials declined to comment on the stock performance.



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