Shares Under Armour (NASDAQ:UAA) have surged more than 20% over the past month. This increase was helped along by very strong earnings posted a couple weeks ago. These results were buoyed by strong e-commerce sales growth of 25%, leading the company to report an overall direct to consumer sales increase of more than 10% this past quarter.
The company’s ability to grow in times like these, particularly in the e-commerce segment, bodes well for investors considering retail stocks at a time like this. Indeed, coming out of a global pandemic, expectations are that these sorts of stocks could outperform in the medium-term. Getting in now at these depressed levels appears to be the game value investors want to play.
Accordingly, I have this stock on my watch list right now. I want to see if this strong e-commerce sales growth is sustainable upon a return to normal (or even semi-normal) coming out of this pandemic. I’m not sure if this sales growth we’ve seen is indicative of what is on the horizon long-term, or if this is simply a short-term move related to pent-up consumer demand shifting over the near-term.
Indeed, Under Amour has a fantastic brand, which provides this stock with a small moat. I think this moat could grow over the long-term, if the company is able to retain its e-commerce base and keep customers coming back in its high-margin direct to consumer channel.
Invest wisely, my friends.
