Stephen Curry is also high scorer for Under Armour
For most of his life, pro basketball player Stephen Curry was a fan of Nike (NKE) and endorsed the company's products. That is, until 2013, when the largest producer of sports apparel botched its chance to re-sign Curry, paving the way for rival Under Armour (UA) to nab him -- and launch a wildly successful line of Curry footwear.
Beaverton, Oregon-based Nike made several blunders in courting Curry, including mispronouncing his name during a business meeting, according to ESPN. Now, Nike's loss is clearly Under Armour's gain.
The Baltimore-based company today reported quarterly profit that was twice as strong as Wall Street analysts had expected, thanks in part to a 64 percent increase in sales of athletic footwear, with Curry basketball and running shoes responsible for the gain.
The athletic apparel maker's other lines of business performed well during the quarter, and China was another bright spot. According to the company, it earned more revenue in 90 days in China this year than it did in the full year of 2014.
Under Armour's ties to Curry and other big-name athletes is getting much of the credit.
"A large part of these gains is tied to their ability to connect with and have relations with arguably with three of the most transcendent athletes that we have now in sports with Steph Curry, [pro golfer] Jordan Spieth and [NFL quarterback] Cam Newton," said Patrick Rishe, director of the sports business program at the Olin Business School at Washington University in St. Louis. "By turning on the young fans, that not only leads to current purchases but hopefully will build a brand loyalty with those customers as they become older teenagers and grow into their 20s."
Curry, 28, is considered by many sports writers to be a shoo-in to win the NBA's Most Valuable Player Award for the second straight year. Not only did Curry's Golden State Warriors start the season with a record of 24-0, but they ended it by breaking the league's single-season win record -- held by Michael Jordan's Chicago Bulls.
Curry remains a fan favorite, which should help Under Armour accelerate sales of his footwear, including the Curry 2.5 shoe, which debuts later this month, and the Curry 3 due to launch later this summer.
"It seems like the shoe business will help them open a lot of doors and drive brand awareness internationally," said Betty Chen, an analyst at Mizuho Securities, who rates Under Armour as a "buy." "We also think they are likely taking share from other brands."
The 22-year-old Spieth is a pro golfer with promising future, who gained notoriety recently after squandering a chance to win the Masters Tournament with poor play. His stumble, though, didn't hurt the performance of Under Armour's golf business, which helped fuel a 20 percent gain in apparel sales during the latest quarter.
Newton, 26, quarterbacks the Carolina Panthers and is one of the most popular players in the NFL. Other Under Armour athletes include New England Patriots quarterback Tom Brady and Bryce Harper, who plays for baseball's Washington Nationals.
During the most recent quarter, Under Armour revenue surged 30 percent to $1.05 billion, while net income jumped 63 percent to $19 million, or 4 cents per share.
"And to be clear, that 30 percent number was no accident," said Under Amour Chief Executive Kevin Plank today in a conference call with Wall Street analysts. "When Stephen Curry decided to average 30 points this season to take the scoring title while wearing the number 30, we thought that putting up 30 percent growth on our end was the best way for us to demonstrate our pride and support of Stephen and the Warriors."