It’s only a small part of the business, but digital healthcare is Under Amour Inc.’s fastest-growing sales channel.
For the year ended Dec. 31, Under Armour posted sales of web-connected fitness products of $80.4 million, an increase of 51% from sales of $53.4 million in 2015. In comparison overall sales for Under Armour increased year over year 22% to $4.64 billion $3.82 billion, while apparel, its biggest category, increased revenue 15% to $3.22 billion in 2016 from $2.80 billion in 2015.
Overall connected fitness accounted for 1.7% of sales in 2016 compared with 1.4% in 2015. Under Amour sees a key business opportunity in digital healthcare primarily to build more digitally connected wearables and apparel that lets athletes and others track and compare performance, CEO Kevin Plank told Wall Street analysts on the company’s year-end earnings call according to a transcript on SeekingAlpha.com.
“We think that the amount of data that the 200 million users we have, telling us how much they exercise, what they ate and giving us data that will help us learn more about them to ultimately help us sell more shirts and shoes is something important,” Plank told analysts.
In the past three years Under Armour has invested almost $500 in launching new digitally connected apparel and shoes—and in acquiring companies to collect more data. In January 2016, Under Armour rolled out UA Health Box, a suite of wearable devices that includes a wrist monitor that tracks data on sleep and daily physical activity, a heart rate monitor and a Wi-Fi-equipped scale to measure weight and body fat percentage.
The company also rolled out a new line of running shoes embedded with a tracking chip linked to a mobile app for continually monitoring the distance consumers travel on foot. In February, Under Amour also spent $475 million to acquire MyFitnessPal.com, a developer of popular websites and fitness apps that track diet and exercise.
“We know what we do for our livelihoods, and frankly the reason that we got into Connected Fitness to begin with, with an investment like that, was to help us sell more shirts and shoes,” Plank told analysts. “I think we feel really good about the leadership we have with Connected Fitness. We’ll continue to of course forge on and build something bigger and better there.”