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 first-ever 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.