Under Armour is "counting on footwear to help fuel its next wave of growth," with Warriors G Stephen Curry being a central part of the plans, but the company "faces mounting competition" from Nike and adidas, according to Nick Turner of BLOOMBERG NEWS. UA shares on Friday fell more than 5% over concerns that the company’s latest Curry basketball sneaker, "part of an ambitious push into footwear, isn’t selling well." Foot Locker, the world’s "biggest sneaker chain, said that the new generation of the Curry shoe -- dubbed 3.0 -- hasn’t performed as well as earlier ones" (BLOOMBERG NEWS, 11/18). ESPN.com's Darren Rovell noted UA lost nearly $600M of its "value as a company Friday, as its stock plummeted." Foot Locker President & CEO Dick Johnson said the Curry 3.0 "started off a bit slower than the previous models," causing a sell-off in the stock market. Johnson on Foot Locker's earnings call said that the basketball shoe market was "softer than in the past, though he did say the Curry 2 and Curry 2.5 shoes, as well as Nike's Kyrie Irving line, were able to break through" (ESPN.com, 11/20).
COST OF LIVING: FOXBUSINESS.com's Bradley McNew noted UA's $280M, 15-year deal with UCLA is "just one of many massive deals the athletic gear maker has taken on lately." However, though getting its logo on such high-visibility teams is "certainly impressive, the company's stock is also dropping due to earnings declines that are largely driven by precisely these kinds of high-cost maneuvers." McNew: "Are these expensive sponsorship deals worth it?" UA also has deals with Wisconsin and Notre Dame. On UA's website, there are 50 athletes "featured, and there must be more who are not currently being promoted there, such as pro-wrestler and actor Dwayne 'The Rock' Johnson." UA has been "incredibly successful with some its sponsorships," but its "high costs are weighing on earnings" (FOXBUSINESS.com, 11/18).
