UA's Plank Likes Company's Trajectory Despite Building Pressure From Wall Street
UA Founder, Chair & CEO Kevin Plank sat down with CNBC's Jim Cramer at the company's new SoHo store in N.Y., which opened last Thursday. Cramer opened by saying UA stock has "been under a huge amount of pressure, a victim of Wall Street's sudden turn against expensive, fast-growing momentum names and their high-priced earnings ratios.” Cramer: “But Plank's a fighter, and you need to be thinking about buying stocks like this when they're going down, not when they're flying high." Plank said of the new SoHo store, "Eighteen years to get to this point, but you don’t walk into New York City in year one. We've earned it." Plank said he likes “the trajectory" UA is taking, as it cuts into market share from other companies and "we think we have the opportunity to be the No. 1 brand in the world." Cramer: "Is that 'Kevin Hubris' speaking? Because I know you're a competitor, but you're underestimating the competition. That's not like you." Plank: "I would never do that, but what we'd say is that this is not a zero-sum game, so one person doesn't have to lose for another one to win. There's lots of room for competitors. That doesn't make us like anybody any more, but we like the way that we're positioned” ("Mad Money," CNBC, 4/29).
WHERE’S THE GROWTH: Cramer said, "As of late in this quarter, you are getting beaten" UA's share price is down 20% from its 52-week high of $62.40. Plank said UA is a "long play" and the company "and its metrics are delivering on everything. We continue to see that type of hyper-accelerated growth for the year." Plank said, "We love the direction we're heading. … This is a $10 billion brand currently doing just under $3 billion in revenue. So how many companies can really think of that kind of outlook?" Plank: “These things take time. But the good news is our growth story, it's not coming from one particular place." Plank noted cracking Nike's domination of outfitting the top college football teams, "We've got some teams out there, (along with) our recent announcement with Notre Dame. We'll take assets as they come, but the assets we're looking for today are much more global assets. … Our goal is using our North American growth drivers and cash creation to help us fuel our global ambition as a company" ("Mad Money," CNBC, 4/29).