{"id":578299,"date":"2017-11-03T15:04:01","date_gmt":"2017-11-03T15:04:01","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=578299"},"modified":"2017-11-03T15:04:01","modified_gmt":"2017-11-03T15:04:01","slug":"memo-to-kevin-plank-fix-under-armour-not-baltimore-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=578299","title":{"rendered":"Memo to Kevin Plank: Fix Under Armour\u2026 Not Baltimore"},"content":{"rendered":"

By Alexander Green<\/a><\/span> What do you call a public company that isn’t a growth stock\u2026 or a value stock?<\/p>\n

How about \u201ca disaster\u201d?<\/p>\n

Let’s use Under Armour (NYSE: UA) as an example.<\/p>\n

The Baltimore-based company is a popular developer, manufacturer and seller of sports apparel and footwear.<\/p>\n

Kevin Plank, a former University of Maryland football player, founded the company in 1996 with performance apparel engineered to keep athletes cool, light and dry.<\/p>\n

Working out of his grandmother’s basement, he traveled up and down the East Coast selling the shirts out of the trunk of his car. They were an immediate hit and \u2013 with a bit of clever marketing \u2013 quickly became \u201cmust-have\u201d items for serious athletes.<\/p>\n

Under Armour clothing moved beyond the playing field and was soon seen in offices and other places of business.<\/p>\n

New technologies \u2013 that made its clothing softer, thinner or wick better \u2013 kept customers coming back for more. Annual sales topped $4.8 billion.<\/p>\n

The company aimed high, setting its sights on its two enormous \u2013 and enormously successful \u2013 global competitors: Nike (NYSE: NKE) and Adidas (OTC: ADDYY).<\/p>\n

And for a while, it looked like it might eventually overtake them. Through the end of 2016, Under Armour reported 26 straight quarters of 20%-plus sales growth.<\/p>\n

Yet that growth suddenly declined in the first two quarters of this year. And this past week, Under Armour dropped a real neutron bomb.<\/p>\n

Sales actually declined 4.5% in the September quarter. Earnings plunged 58%.<\/p>\n

The market’s reaction was instantaneous. Under Armour shares collapsed 22% in a single session.<\/p>\n

They are down 57% over the last 52 weeks vs. a 22% gain in the S&P 500.<\/p>\n

For shareholders, this is a disaster. Yet it appears to be far from over.<\/p>\n

[iu-adbox]<\/p>\n

Founder and CEO Plank conceded this week that he had been \u201ca little braggish\u201d about the company’s accomplishments in the past. Yet he blamed the company’s recent setback, in part, on the bankruptcy filings of distributors Sports Authority and Sports Chalet.<\/p>\n

Curious how this did not cause a sales decline at competitors Nike and Adidas.<\/p>\n

Under Armour’s bigger problem is that the brand \u2013 like a restaurant that is no longer \u201cthe place to go\u201d \u2013 has lost its cachet. Other apparel companies are offering similar quality merchandise \u2013 and brand loyalty is breaking down.<\/p>\n

This is largely because Under Armour is not price competitive. Its apparel \u2013 rarely on sale \u2013 often sells for twice as much as competitors’.<\/p>\n

Yet listen to this entirely tone-deaf remark by Plank this week:
\nWe invented the $25 T-shirt. We’ve pressed the bounds as to what consumers will pay for apparel. That will continue. No one is looking for Under Armour to have the $25 hooded fleece. They want Under Armour at the $75 and $100 price points.
\nGot that? Customers don’t want lower prices on Under Armour goods. They prefer to pay more.<\/p>\n

His comments were borderline delusional.<\/p>\n

There are only three types of companies that don’t need to be price competitive. The first is companies experiencing extraordinary product demand.<\/p>\n

As the recent sales decline suggests, that is not the case here.<\/p>\n

Or a company can maintain high \u2026read more<\/a> <\/p>\n

Source:: Investment You<\/a><\/p>\n

The post <\/a>Memo to Kevin Plank: Fix Under Armour\u2026 Not Baltimore<\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Alexander Green What do you call a public company that isn’t a growth stock\u2026 or a value stock? How about \u201ca disaster\u201d? Let’s use Under Armour (NYSE: UA) as an example. The Baltimore-based company is a popular developer, manufacturer and seller of sports apparel and footwear. Kevin Plank, a former University of Maryland football […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/578299"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=578299"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/578299\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=578299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=578299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=578299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}