Under Armour Feeling the Pressure

Business Correspondent

Under Armour. We all know the brand. At some point or another, we have all begged our moms and dads to buy us some of this (overpriced) apparel because of its sporty, technological, and high-class look. So what’s the deal with their stock price?

Under Armour has been around for about 20 years now, gaining extreme popularity in the mid 2000s.

However, it has definitely seen some better times in its last four quarters. Its share price has taken a nosedive and is

now down over 68 percent from last year. Even scarier than this, they are down over 80 percent from this time two years ago. This is not very common for a once popular brand who is listed on the New York Stock Exchange.

courtesy of wikimedia commons
JORDAN SPIETH, a professional golfer sponsored by Under Armour, has a 10-year contract he signed in 2015.

Many factors are pulling Under Armour to endless lows. Chiefly, Under Armour’s revenue growth has slowed rapidly. Compared to the 2014 fiscal year with 32 percent revenue growth, it currently is not sitting well with analyst expectations at 12 percent for the 2017 fiscal year. Specifically, their footwear sales grew a mere 2 percent for the first quarter of this year.

Ok, I know, too many numbers. What all this boils down to, though, is the sheer fact that Under Armour just isn’t as good as they used to be at reaching their market and hitting revenue goals. They recently put out a new line of Steph Curry signature edition sneakers, but were met with a lack of demand. Their sales are mainly here in North America, where they are experiencing a massive decline in demand for their sporty apparel, footwear, and accessories.

The sportswear industry itself is also experiencing a regression. There have been filings of bankruptcy by companies like Sports Authority and City Sports. These bankruptcies sent a massive shock to the industry, resulting in a $4 billion revenue decline for the industry as a whole. This affects Under Armour a little more than, say, Nike. Massive conglomerates like Nike and Adidas hold a much greater market share than Under Armour, hurting Under Armour stock even further.

Under Armour executive Kevin Plank has been trying to steer the company into calm waters. He has been looking to revitalize the company by signing deals with rappers like A$AP Rocky, putting out new shoe lines, and even defending its main endorsers in remarks against President Trump. However, Under Armour just isn’t making the cut. Shareholders seem to be losing faith in the company. Under Armour really needs to try and up their game in order to boost revenues and keep their share price out of the danger zone.

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