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Why I Prefer Crocs over Under Armour

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I bought some Crocs stocks (CROX) a while ago; actually I looked at Under Armour (UA) at the same time and I am glad I made the correct decision (so far). Besides the difference of PE ratio, CROX is 42, UA is 76 (supposedly the lower PE means the price is cheaper). I made this decision more based on the business prospects.

From my observation, Crocs are sold in a lot more stores than Under Armour, which are only sold in Sporting Good stores. In other words, Crocs have a wider distribution channel. This is very important for consumer goods. By the same token, I found Crocs have a wider appeal to consumers, especially kids. Under Armour has made efforts to reach women and kids but they are not there yet.

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Heelys and Under Armour

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I went to the West County Mall to check out Heelys: at the Nordstorm and Dick’s Sporting goods; I happened to see a grandma is buying a pair of Heelys for her grandson. Note Nordstorm is considered as high end department store. Dick’s Sportings also carries Heelys but I did not see anyone trying them.

For the second time, I saw a big display of Under Armour products at Dick’s (last time was couple weeks ago at Sports Authority): from its traditional sports underwear to outwear, accessories, caps…you name it; and what amazes me is they don’t have any discount. I did not visit Sports goods stores very often but I know even premier brands like Nike discount their products from time to time. I think Under Armour (UARM) will have a good holiday season: it seems to me they are eating market share away from Nike and other brands.

Under Armour Underwear

I also stopped by the Apple store, not surprisingly, that place is always full of people. I think this time iPod Nano is going to do well.