UA Faces More Shareholder Questions As Company Grows
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Plank Says Launch Of Cross Trainer
Better Than Expected |
Under Armour (UA) yesterday held its annual meeting at the ESPN Zone in Baltimore, and as the company has “learned to deal with the scrutiny of Wall Street since becoming a public company in 2005, it’s also finding its shareholders are asking tougher questions,” according to Andrea Walker of the Baltimore SUN. UA Chair & CEO Kevin Plank: “We’re not a new company anymore and people are starting to know us.” Shareholders asked about the company's "practices at its overseas manufacturing plants and whether the company has been able to maintain pricing in a weak retail environment.” UA COO Wayne Marino: “Even with the current environment, we’re seeing our product at full price and we’re not discounting.” Walker reports most shareholders were “curious about what product launches were next” for UA, with biking and golfing apparel being possibilities. Plank said that the launch of UA’s New Prototype cross trainer “went better than expected,” as weekend sales “reached what they’d expected to make for the entire week." The company has prototypes for new running and basketball shoes, and Plank said that he "sees footwear eventually surpassing apparel sales.” Walker notes UA has “put in a plan to better control what some analysts consider high inventory levels.” It also has “learned to better communicate with Wall Street about fluctuations in its business that many affect revenue” (Baltimore SUN, 5/7).
GROWING COMPETITION: In this week’s SPORTSBUSINESS JOURNAL, Terry Lefton writes with the release of UA’s New Prototype, there is a “growing vibe across sports that if any competitor has a shot at eroding Nike’s 40[%] -- and growing -- domestic athletic footwear market share,” it is UA. A recent survey by Piper Jaffray & Co. of 700 U.S. students found UA to be the No. 2 athletic brand in the U.S., and AND1 Founder Seth Berger said UA is the “only company in the past 20 years that has a realistic chance at competing with Nike.” Plank: "Footwear should be a driver of growth for years and a pivotal point in where we are going and where we are going to be.… Footwear means we have competitors with enormous resources, which is why everyone here always talks about making one dollar spend like three.” More Plank: “Running and basketball are natural progressions for us. The fact is that our brand has the ability to go there; it’s just about when the (product) is ready for that” (SPORTSBUSINESS JOURNAL, 5/5 issue).
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