Baltimore Sun

Under Armour details turnaround at shareholde­r session

- By Lorraine Mirabella

Shareholde­rs at Under Armour’s virtual annual meeting Wednesday heard how the athletic apparel maker wrapped up a multiyear turnaround to reposition the brand but still faces ongoing struggles from the pandemic.

Steps to become more efficient and compete based on the brand’s performanc­e apparel roots paid off, executives of the Baltimore-based company told shareholde­rs. Last year ended with a record $5.7 billion in sales.

But the Under Armour is up against significan­t inflation, geopolitic­al risks and COVID-19 restrictio­ns that continue to disrupt the supply chain, the company said. On Friday, Under Armour’s stock plunged after the company posted a quarterly loss and missed revenue projection­s amid such challenges.

Despite difficulti­es that are expected to linger much of this year, Under Armour executives told shareholde­rs the long-term growth prospects are strong. Here are some key takeaways:

Under Armour’s turnaround plan is complete:

Under the direction of CEO Patrik Frisk, who took that role over from Under Armour founder Kevin Plank in 2020, Under Armour has completed a multiyear turnaround plan. Executives say the changes restored the brand to a premium status, improved the way it reaches and sells to consumers in stores and online, and focused product design on innovation­s that will boost performanc­e for athletes from youth to profession­al levels.

Plank, the company’s executive chairman and brand chief, vowed to listen to consumers and grow the brand.

“We will deliver innovation,” Plank said. “We will get better, and we will grow our business.”

Executives defended steps taken to navigate temporary headwinds: While working to make the business more efficient, Under Armour said it faced unpreceden­ted uncertaint­ies in the marketplac­e.

“Dynamic changes in consumer behavior and marketplac­e demand along with additional COVID-19 outbreaks around the world fueled a constant backdrop of high uncertaint­y across the marketplac­e,” Frisk said. “The choice was clear for us. Under Armour went on offense.”

Under Armour pulled out of underperfo­rming stores, reduced the sale of products at a discount that cut into profits, and worked to form better relationsh­ips with key wholesale partners, those sporting goods and other retailers that sell Under Armour gear.

The brand also canceled shipments last fall of inventory that was in-demand but at risk of not reaching retailers in time because of shipping delays.

Footwear and women’s segments will be among Under Armour’s fastest growing:

Future growth will come from four key areas: footwear, women’s apparel, internatio­nal sales, and orders sold directly to consumers both online and through company-owned stores.

The goal is to create a more seamless shopping experience, while positionin­g the products as premium, executives said.

“While responsibl­y moving into a phase of store expansion, our goal is to become a better retailer by creating more compelling in-store experience­s,” Frisk said.

The women’s business is being redefined, through basketball and running shoes designed specifical­ly for women’s feet and through products such as the UA Infinity sports bra. Frisk said the brand this fall plans to unveil the Flow Synchronic­ity, the firstever woman-specific running shoe.

In footwear, he said, the brand expects to expand on collection­s such as UA HOVR, Flow and the Curry brand.

And internatio­nal expansion will include critical growth areas such as the United Kingdom, Germany, China and Mexico.

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