Under Armour Founder, Chair & CEO Kevin Plank yesterday said the company's stock has "not held to the standard that all of us as shareholders have come to expect after 12 years as a public company," according to Lorraine Mirabella of the Baltimore SUN. Addressing about 300 shareholders at UA's Baltimore HQ, Plank said, "We do not accept it. We are not happy about it." Plank said his vision of growing from $4.8B to $10B a year in sales on the way to building the world's biggest sports brand "has never been bolder, never been stronger." Mirabella notes UA's stock price, which started last year in the low-$40s, has "since fallen under $20," closing yesterday at $17.83 each. After "years of rapid growth, Under Armour has struggled with shifting consumer buying habits and a slowdown in sales in its core U.S. apparel business." In April, UA "announced its first quarterly loss since it became a public company" in '05. Plank "told shareholders he envisions the near future as a time to reset," which means "fine tuning products, merchandising and distribution through existing retail channels, meeting growing online shopping demand and focusing on areas with growth potential." UA's struggles "come after a year in which the company outfitted several hundred athletes" at the Rio Games and signed "major deals including a 15-year outfitting agreement with UCLA and another to make uniforms" for MLB starting in '19. Plank: "We have enough. We have plenty. We just need to activate to make it great" (Baltimore SUN, 6/1).
CAUSE & EFFECT: BARRON's Avi Salzman noted one reason UA has been "struggling this year is that hundreds of stores that used to sell its goods went out of business." One of the sporting goods companies that stuck around, Dick’s Sporting Goods, is also "selling its own workout gear in direct competition" with UA. The company is now "pivoting its strategy" by "selling its shoes and apparel at Kohl’s." In July, UA will also "start to sell shoes at DSW and Famous Footwear." SunTrust analyst Pamela Quintiliano said that one thing these chains "have in common is that they tend to appeal more to women." Quintiliano added that among the big sneaker and apparel brands, UA "remains the little guy, but the new partnerships will boost the number of outlets where its products are sold to about 13,000, versus 23,000 at Nike" (BARRONS.com, 5/31).
