How to Play Under Armour Ahead of Earnings

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Oct. 23 (Bloomberg) -- Oppenheimer's Brian Nagel, Trading Advantage's Scott Bauer and Bloomberg's Julie Hyman preview Under Armour's earnings on Bloomberg Television's "Street Smart." (Source: Bloomberg)

And the trade.

Apparel makers have not been doing so well in recent quarters.

What about under armour?

Athletic wear makers have been doing better generally, whether you are looking at under armour or nike, that performance has been better.

If you look at the expectations this time around, net income is to grow further sales by 23%. analysts have been talking about better distribution in different stores.

I saw one note the talked about being able to buy those products in dick's sporting goods stores.

Outdoorsman are into these products, not just people who like to jog.

Introducing new products, to your point about innovation, this has been driving a fedex across the category again.

There is this competition to come out with the newest and most innovative products.

That has been driving their sales as well.

The question is, do you get in here after that gain from year to date gekko i was running those numbers and it is pretty much the most expensive out there when you are comparing it with other apparel makers and retailers, it is pretty pricey.

Part of that stems from the growth that the company is trying to articulate.

Brian, when you look at this company and compare it say to nike, what is it that you find really distinguishes it at makes it different?

Under armour is still a small company.

Like a lot of the other guests were saying, they are naturally phenomenal innovator.

My team boat a piece about a week ago that talked about all of the innovation coming out of this company.

Right now they are doing just a phenomenal job bringing innovation to the sporting-goods category.

My only concern is the multiple on stock trade.

The way they are doing it is somewhat different as well.

Nike employs hundreds of engineers trying to innovate is products and under armour is doing it differently, going out to solicit ideas from the general public, saying we will partner with you and work with you.

One of the things he said to me -- that of nike had a program like that, that he might not be there, that he might have gone to them with his ideas.

He wants to give entrepreneurs some of those opportunities.

A big part of what is driving their innovation as well.

Scott bauer, looking at this company ahead of the big report, what do you see in the options market?

There is definitely called lying to the upside.

I love this company.

This is one of those few brands out there, when you look for that kind of thermal underwear thing, it you say you need to wear under armour, whether it is their brand or not.

Based on those brands coming out, i want to be bullish.

November 1, 8387 call spread.

The reason is because charts are saying technically 87 could provide resistance, so i want to take it vantage of a very good report, good outlook.

I pay $1.50 for that, i think the company is spot on.

Let's talk about the global footprint, julie.

They want to do more on the global front and there is an opportunity of course in brazil that nike is trying to capture as well.

What does this company really need to do to drive growth internationally?

It comes back to the size question.

They are going to have to push out into these other markets.

It speaks as to why they are going towards the female category, right?

You can only get so big just looking at men's apparel.

That is why they are looking at footwear as well.

It is a matter of getting into all the areas they can in order to keep up with the pace of growth, which is important as well.

Under armour, chipotle, any kind of quick growing company that is a certain size and try to get bigger, inevitably at some point the growth is going to slow.

Under armour is trying to fuel it for as long as they can.

As you mentioned, women are definitely part of that.

Brian, given the challenges and the difficulties that lulu lemon had, those notorious yoga pants, is there an opportunity for them to capture some you -- some market share away from lulu lemon?

I do not know if it comes from the result that people have with their pants, i think there just is a very large untapped yoga market out there right now.

We will be watching for it and have those numbers for you

This text has been automatically generated. It may not be 100% accurate.


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