“Sell Less, Charge More, and Earn More” should be Under Armour’s (UAA, UA) new strategy which could lead to increased profits and improved margins and ultimately resulting in a healthier company with a higher share price, says BMO Capital’s Simeon Siegel.
“Our brand ubiquity analysis suggests that Under Armour is under-earning because it’s overselling,” Siegel says in Monday’s research note.
“Under Armour’s revenue show it remains one of the largest brands in history, yet its profits tell a different story,” Siegel says, adding that his math suggests that if UA were to raise like-for-like prices by 10%-20%, it would increase profit dollars as long as it lost fewer than 22% to 37% of units.
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