Under Armour Executive Summary

In the first half of 2016, Group revenues increased 21% on a currency-neutral basis, due to strong double-digit growth at Adidas and mid-single-digit sales increases at Reebok. In euro terms, sales increased 15% to € 9.191 billion (2015: € 7.990 billion). All market segments posted currency-neutral sales increases, with double-digit growth across all regions except Russia/CIS, where revenues grew at a mid-single-digit rate. Despite significant pressure from negative currency effects, the Group’s gross margin improved 0.4 percentage points to 49.1%, driven by a more favorable pricing and product mix. Capitalising on the strong top-line development, the Group was able to generate significant operating leverage, with other operating expenses as

Nike continued its global dominance with $30.6 billion in revenue for its 2015 fiscal year, which ended last May. Under Armour leapfrogged Adidas in late 2014 to become the United States’ second best-selling sportswear brand and set an ambitious $7.5 billion financial target for 2018.Sagging sales in its Taylor Made-Adidas golf sector, coupled with currency losses amid financial unrest in the Adidas-dominated Russian market, forced the German brand to adjust its financial targets for 2014. Some investors called for the resignation of Herbert Heiner, Adidas’ longtime CEO. But analysts say Adidas’ biggest mistake in recent years was losing touch with consumers in North America – the key to the footwear market and the sports apparel industry at large. The biggest problem for them was that the brand became too Eurocentric and not enough U.S.-centric,” said Matt Powell, vice president of NPD Group’s sports industry analysis division. “The United States represents 45 percent or so of the worldwide sneaker market. In order to win, you’ve got to win here. And they were losing here.” Adidas’ apparent complacency in North America came as the worst possible time. Under Armour continued its 2014 surge with company-record revenues in 2015, buoyed by strong U.S. apparel sales and expanded efforts in the footwear sector. Adidas reported sales of

Success depended on the correct assessment of future trends and challenges. Adidas continuously gathered and analyzed business intelligence, including a qualitative assessment of the future business environment, in order to best identify strategies to avoid or lower risk.

Operations Risks Independent factories produced the vast majority of Adidas products. Inferior quality and/or delivery delays had an impact on the Group’s revenue and reputation. To mitigate this risk, Adidas employed more than 100 quality control officers who monitored factory performance Independent factories produced the vast majority of Adidas products. Inferior quality and/or delivery delays had an impact on the Group’s revenue and reputation. To mitigate this risk, Adidas employed more than 100 quality control officers who monitored factory performance

Social and environmental Risks Adidas’ Social and Environmental Affairs (SEA) team monitored the factories of Adidas suppliers to ensure compliance with social, environmental, health and safety standards, creating and implementing action plans to ensure improvements where