Under Armour’s stock showed no sign Wednesday of bouncing back from Tuesday’s dive that wiped out a quarter of its value.
After plunging $7.45 a share Tuesday, the Baltimore-based athletic apparel brand’s stock bounced a little below then a little above Tuesday’s closing price throughout Wednesday. The stock ended the day down a nickel at $21.44 a share.
The stock price fell after Under Armour announced sales and earnings for the fourth quarter that missed Wall Street expectations and a forecast for Supertotobet 2017 that showed slowing growth.
Analysts at CRFA Financial, Piper Jaffrey, Raymond James and SIG Susquehanna among others downgraded the stock, citing the weaker-than-expected forecast for sales this year and the departure of Chip Molloy, Under Armour’s chief financial officer, after just one year, among other issues.
During a conference call with analysts, Under Armour founder and CEO Kevin Plank acknowledged the company will be made “wiser” by the difficulties that humbled its once vaunted growth prospects.
Under Armour is selling its first U.S.-made collection of apparel, including women's sports bras and leggings made in Baltimore.
The apparel, dubbed "Arris Project," is being produced at UA Lighthouse, the brand's manufacturing and design center that opened last summer in Port Covington.
The sports...
Under Armour is selling its first U.S.-made collection of apparel, including women's sports bras and leggings made in Baltimore.
The apparel, dubbed "Arris Project," is being produced at UA Lighthouse, the brand's manufacturing and design center that opened last summer in Port Covington.
The sports...
"Someone asked me recently if this has been a humbling experience for me," Plank said. "I'd like to think that being humble or being made humble is never required, but who knows, we probably all get over our skis a little bit."
A Business Insider story suggested the company’s long run as a Wall Street darling has ended with the lede: “Under Armour's status as the golden child of athletic retail may be ending.”
It cited a report to clients by Hakon Helgesen, a retail analyst at the research firm GlobalData, who wrote that Under Armour’s "performance has deteriorated at a rate far in excess of a natural slowdown."
The White House today released a list of 28 business leaders -- including Under Armour CEO Kevin Plank -- it said will be part of President Trump's ongoing manufacturing jobs initiative.
The initiative is part of the president's overall job creation agenda.
"President Trump plans to continually...
The White House today released a list of 28 business leaders -- including Under Armour CEO Kevin Plank -- it said will be part of President Trump's ongoing manufacturing jobs initiative.
The initiative is part of the president's overall job creation agenda.
"President Trump plans to continually...
Helgesen said Nike, Adidas, and Lululemon cut into Under Armour's sales as those competitors innovated more successfully. In particular, he noted, Lululemon has been designing styles that some customers apparently prefer to Under Armour's sporty aesthetic and loud logos.
Reuters columnist Jennifer Saba laid the blame at Plank’s feet with a column titled: “Under Armour’s founder-led approach wears thin.”
Saba cited Plank’s 2015 move to shift the company’s capital structure so he could sell more of his stake, yet maintain control of the company. Once the change went through, creating a new class of non-voting common stock, Plank ownd 15 percent of the company but controlled 65 percent of the votes.
“Plank’s strategy of maintaining power is under-performing badly,” wrote Saba, citing the stock’s drop since the plan was implemented.
But some saw opportunity.
In a Seeking Alpha column, contributor Daniel Katz said Under Armour’s steep drop over the past year presents value.
Katz was more forgiving of the retail headwinds Under Armour faced. In fact, he called the brand’s 12 percent growth in revenue, driven by a 50 percent gain in international sales and a 23 percent gain in direct-to-consumer sales through websites and its own stores, “stellar.”
He also said the extent of Monday’s sell-off seemed “ludicrous.” He dismissed worries about the slowing sales growth, saying Under Armour will continue to see significant, if not “lightning-fast,” growth.
“Under Armour is investing in its brand heavily, seeing significantly strong results from its overseas market, and anticipates strong revenue for 2017,” Katz wrote. “The sell-off is overblown, and investors should take advantage.”
Few seemed to be doing so on Wednesday.
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