The share price of Under Armour (NYSE:UAA) (NYSE:UA) has retreated 68% from its record high established in the second half of 2015. Sure, the company has been plagued with disappointing earnings growth; however, by looking at the strong share price recovery in Lululemon Athletica, Inc. (NASDAQ:LULU) post its quarterly results announcement on September 1, perhaps the same could happen to Under Armour?

As has been demonstrated in the case of Apple’s (NASDAQ:AAPL) iPhones, where the Chinese are said to highly value exclusivity, the increasing prevalence of Nike (NYSE:NKE) and adidas (OTCQX:ADDYY) (OTCQX:ADDDF) could turn out to be working against the two companies. Clearly, Nike and adidas have performed well in China (see the chart below). Announcing its second-quarter results on August 3, adidas said sales grew 28 percent in China. For Nike, its first-quarter results released on September 26 showed that sales in China rose 9 percent year-on-year. This is impressive considering that North America sales actually dropped 3 percent. The coveted swoosh on the shirts, pants, bags, shoes, etc. has served Nike incredibly well as it feeds into the desire of the Chinese for ostentatious status symbols. However, Nike could be turning into a victim of its success. As its products become worn or used by an increasing segment of the population, the perceived exclusivity that those products accord to the wearer or user would diminish. This is when it becomes Under Armour’s turn to shine.

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