While Under Armour lowered its outlook for the year because of “a challenging retail environment,” company shares surged Thursday after the Baltimore-based brand “beat Wall Street’s expectations” for Q2 earnings, according to Lorraine Mirabella of the BALTIMORE SUN. Under Armour’s stock “jumped nearly 12%” Thursday. Under Armour founder & Exec Chair Kevin Plank said that UA intends to "connect more deeply with team-sport athletes" in the 16-20 age range as the target audience that would then “influence the broader market.” The brand also expects to expand apparel offerings in a new “live” category “designed to provide gear for a full day of a young athlete’s life.” Plank said that the brand has made strides in the past six months to “drive more love for the Under Armour brand.” UA interim President & CEO Colin Browne said that “significant changes in market dynamics and consumer behavior” over the past few years “prompted the company to narrow its focus” from the serious athletes it calls “targeted performers” to young athletes who play team sports from ages 1620. The brand “lowered its outlook for the full year” and now “expects revenue to grow at a low single-digit percentage rate compared with the previous expectation of 5% to 7% growth because of a challenging retail environment” (BALTIMORE SUN, 11/3).
SHIFTING WITH THE TIMES: Browne said that UA is “observing a changing market and needs to adjust its strategy” when it comes to consumers. He added that the company “wants to make sure they have a product line that is in touch with what that group wants.” This group is “interested in street culture,” so Browne said that UA “wants to be versatile and have products that will fill an athlete’s closet no matter if they are competing, working out or just relaxing” (BIZJOURNALS.com, 11/3).
TROUBLED WATERS: Browne said it’s a “little bumpy out there,” but “we’re still seeing $6B worth of demand, so we’re feeling pretty upbeat and confident about our ability to navigate through this.” Browne: “We’ve obviously been managing our inventory pretty closely and that seems to have put us in a pretty good place.” Plank: “For an organization 17 years public now, we’ve seen just about every chapter or machination that a company goes through, and … we’ve been restructuring and retooling the organization and now there’s just no more to do. It’s about a matter of our execution and growing.” Plank said UA has an “incredible pipeline of innovation right now that’s playing out in the marketplace and we’ve also got more to come” (“Closing Bell,” CNBC, 11/3).
