Women's Sportswear Market May Overtake Men's in Sales (LULU, UA)
You don't have to be an athlete to wear athletic apparel – and you don't have to go to a gym to know that sportswear has been a runaway hit with consumers for years now. But you may be surprised to learn the often-neglected women's side of the industry could soon sprint by men's sportwear in terms of sales.
In a post-earnings conference call last week, Under Armour (NYSE: UA) CEO Kevin Plank told investors that sales of women's products currently make up 30 percent of the Baltimore-based company's business – up 18 percent from eight years ago. In its third-quarter earnings report, Under Armour said it expects 2013's net revenues to come in at around $2.26 billion, up 23 percent from 2012.
“Women’s (apparel) has the potential to be larger than men’s,” the Baltimore Business Journal quoted Plank as saying during the conference call.
According to the Journal, Plank hopes the women's segment of the company's business will reach $1 billion by 2016 – with total Under Armour revenue pushing past $4 billion that same year.
Plank says his company is getting beyond the industry's standard, “shrink it and pink it” approach to women's athletic apparel, and plans to launch a marketing campaign early next year that is specifically focused on women's products.“We’re much more than compression shorts and sports bras,” he said.
Indeed, female-specific athletic wear has been making huge strides in the retail sector, helped in part by a growing fitness trend and the ongoing yoga craze.
Last month lululemon athletica inc. (NASDAQ: LULU), which describes itself as a “yoga-inspired athletic apparel company.” reported $344.5 million net revenue in its second quarter of this year, up 22 oercent from the same time period in 2012. And that rise comes in spite of a mini-scandal, involving an unexpectedly see-through line of black yoga pants, that briefly set back the company's share prices.
"It's an underserved, under-represented market that's growing," Howard Tubin, a retail analyst at RBC Capital Markets, told the Los Angeles Times in 2011. "There is certainly competition, but there's room for retailers to pick off a little bit."
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