Having doubled its annual sales for the past three years running, it's fair to say Under Armour has been killing the game and then some. With an aggressive marketing campaign and sporting superstars like Stephen Curry, Andy Murray, Jordan Speith and Anthony Joshua all operating under the brand roster, the sports performance upstart was expected to go from strength to strength. That is, until now, as new figures suggest all may not be rosy in the garden.
In a new piece, BoF reports the Baltimore-based company's recent earnings fell below analyst estimates. Revenue rose 12 percent to $1.31 billion for the fourth quarter, which was short of the $1.41 billion forecast. Of course, while that's not exactly bad, it's still a big slowdown on its hitherto rapid growth, as reflected by the fact class A shares have now dropped by 18 percent. Explaining the sums, Under Armour claims "higher demand for lifestyle silhouettes caused us to be out of balance with our assortment."
The article then goes on to explore wider issues at the company, including Stephen Curry's "Chef" 2 Low sneakers, which were roundly mocked as "dad shoes" upon release. The piece states that:
Though Under Armour hit the jackpot with Curry's sneakers, analysts are concerned that they're not getting enough traction off the court. Sneakerheads have dismissed some Curry styles as ugly in the past, and some observers are worried about the newest iteration.In a note to clients issued earlier this month, analysts at Nomura Securities's Instinet wrote that the Autumn launch of the Curry 3 had been "muted."
In their checks on the sneaker's various releases over three months, they found little fanfare and no store sellouts. Foot Locker said the Curry 3 launch had "started off a bit slower" than its predecessors. (Under Armour did not share specific sales numbers for that shoe.)
Under Armour also recently unveiled its lifestyle sub-label, UAS. With garb priced as high as $1,500, the high-fashion range has been described by chief executive Kevin Plank as a "massive stride" in the brand's quest to become more "off-court friendly." "We need to become more fashion," said Plank. "The consumer wants it all. They want product that looks great, that wears great, that you can wear at night with a pair of jeans, but that also does perform for them."
We'll see how this pans out. For further reading, check out the article in full over at BoF right here.
In more positive news, UA recently unveiled these dope Under Armour Curry 3 “Chinese New Year” kicks.