As a reckoning continues across much of the athletic footwear and apparel market, one of the key players has turned again to its founder in search of a new spark.
Under Armour has brought back founder Kevin Plank as president and CEO. Plank—who had been executive chair of Under Armour’s board—replaced Stephanie Linnartz, a former Marriott executive who had arrived with a three-year recovery plan for the brand but was on the job for only a year.
Company officials have not detailed the full reasoning behind the shift or its timing. But Under Armour’s stock has fallen more than 70% since late 2021, and the fiscal ’24 outlook has been lowered each of the last two quarters, now sitting at an expected 3% to 4% decline in revenue.
“As the company continues to navigate several post-pandemic consumer, industry, and brand-specific factors, we are working hard to reconstitute our strengths and make thoughtful, balanced decisions to drive enduring success,” Plank said.
Industry Downturn
Under Armour is hardly alone in facing such large-scale challenges, and a holiday-season malaise in the market has led to more grim news in early 2024. Adidas just posted its first annual loss since 1992, while Nike is in the midst of a $2 billion cost-cutting effort that involves layoffs.
The Maryland-based Under Armour, however, could be facing the greatest set of challenges. Formed by Plank as an upstart challenger to many of those established, historically steeped giants, the company has struggled mightily in recent years to maintain the strong brand affinity it enjoyed in its early years, and it has had other challenges, such as the end of an on-field licensing deal with the NFL, the payment of a $67.5 million settlement to UCLA following a bitter contract breach dispute, and a series of embarrassing revelations over a toxic work culture.
Investors have not conveyed initial confidence in the return to Plank, as Under Armour shares fell more than 10.7% on Thursday to $7.23 per share, sinking to a level not seen in more than 13 years.
“Mr. Plank’s return is a clear signal that Under Armour’s strategy isn’t working, and supports our field work that [the company’s] key performance indicators continue to deteriorate,” investment banking advisory firm Evercore said in an analyst’s note.
Big Exception to the Trend
Dick’s Sporting Goods on Thursday bucked the trend seen by many of the manufacturers, as well as its own stock slide seen during the second half of last year, and reported quarterly and full-year sales and earnings that beat analyst projections. The company’s shares soared more than 15% to $216.81 per share. A key element of the growth at Dick’s are the brand’s 12 House of Sport stores, with that experiential retail experience expected to expand to more than 75 locations by 2027.
“House of Sport is a significant part of our future growth story,” said Lauren Hobart, Dick’s president and CEO. “All of our core strategies are coming to life, in a dialed-up way, [whether it be] our differentiated product, the access we have there, the service model, or the experiences.”
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