Does Under Armour Smell?

Adrienne Carter

Marathon training season is upon me once again. For my poor friends, that means having to suffer through 18 weeks on non-stop chatter about the pain in my Achilles heel, my terrible training schedule (6:30 a.m. on a Saturday is never pleasant), and the inevitability of chaffing.

Now for those of you who have not had the pleasure of running 26.2 miles, let me just tell it's not pretty. Lucky I'm a pretty new runner, and in recent years the advances in running clothes have been pretty dramatic. Indeed, I swear by Under Armour gear (UARM)--which has a lovely wicking material that keeps me dry during a four hour run and the chaffing to a minimum. Looking around my training group (a group of 100 or so of us crazy enough to run the Chicago marathon this year), I am not alone in my dedication to the brand. I love their shorts.

Going by the Peter Lynch rule of buy what you know, Under Armour could be a great stock pick. And true enough the fundamentals of the company, which IPO'd in late 2005, have been Kenyan style--that is zooming ahead of the pack. Earnings are up from $9.9 million in 2003 to $36 billion at the end of last year. And investors have been happily rewarded; the stock is now around $39, up from as low as $21.

But I wonder: How far can this brand go? Some analysts have called it the next Nike. I'm not so sure. Despite my obsession with Under Armour clothes and willingness to pay a premium for the gear, I wonder how far they can extend the brand. I'm not about to buy my running shoes from them (I'm a New Balance girl), and there's only so much running gear I need (or at least that I can fit in my drawers). I'll be interested to see how well these guys can do; I'm rooting for them. But for now, I'm taking a wait-and-see approach when it comes to the stock.

Before it's here, it's on the Bloomberg Terminal.