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SBD/February 17, 2014/Olympics
U.S. Speedskaters Fail To Medal Despite Switching To Old Under Armour Suits
Published February 17, 2014
STANDING BEHIND THE PRODUCT: UA indicated that it is "'confident' in its skating suits after reports they're slowing down athletes at the Sochi Games." BLOOMBERG NEWS' Rupp & Townsend reported some have "blamed a design flaw in the suits' rear ventilation panels." UA Senior VP/Innovation Kevin Haley said, "The bottom line here is we're confident in all three of the suits we've provided to the U.S. speedskating team, and we're rooting for our athletes" (BLOOMBERG NEWS, 2/14). UA Founder, Chair & CEO Kevin Plank on Friday said, "When you are not performing, you look at everything and it begins with the training, to the gear, to the skates, to the pillows that you slept on the night before. So it is all very fair and this is our business, and I think that we believe that we've got an incredible product that will help our athletes succeed and win." Plank added, "I don't want this to be perceived as anything other than I think everybody is just sort of trying to find out what we can do to help our athletes win. And we've tested it, and on this project in particular, we worked directly with Lockheed Martin and had everything from computational fluid dynamic modeling and wind tunnel testing to get these things built. And we've built, not just one suit, we've built multiple suits for the athletes out there" (Bloomberg TV, 2/14). The WALL STREET JOURNAL's Robinson & Germano wrote the uniform swap "puts Under Armour in a tough spot." SportsOneSource analyst Matt Powell said that if the team "wins medals in the old suits, 'it will be embarrassing for Under Armour.'" But Haley "contested the notion that changing to the previous suits would harm the company's reputation." Haley said, "They're all Under Armour suits" (WALL STREET JOURNAL, 2/17).
ALL PRESS IS GOOD PRESS? Morningstar analyst Paul Swinand said of the impact of the suit controversy on UA's stock, "I actually think it's a positive because they are the small player. If they weren't being talked about, that would be a big negative." Schaeffer's Investment Research Senior Technical Strategist Ryan Detrick said, "We could argue the suits maybe cost the US some gold medals potentially. But, at the same time, it doesn't mean you don't want to buy [the stock] here" (FINANCE.YAHOO.com, 2/14).