Latest news with #KevinPlank
Business Insider
6 days ago
- Business
- Business Insider
Strategic Reset Fails to Resolve Under Armour's (UAA) Struggles with Profitability
In the early 2000s, Under Armour (UAA) seemingly emerged from nowhere to challenge leading athletic brands, capturing market share and becoming a household name in the process. Yet, after an extended slide in its share price, founder Kevin Plank returned as CEO with a commitment to returning the brand to its glory days. However, one year into the turnaround, the company continues to face revenue decline and negative profitability. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. While the stock trades at a relative discount following its decline, the path to sustainable growth remains uncertain. I prefer to maintain a Neutral stance on the stock until I see meaningful progress on revenue stabilization and margin improvement (perhaps at its earnings call on August 6th, which will hold some good news in that regard). Under Armour Struggling to Regain Its Swagger Since its founding in 1996, the Baltimore-based company has built its reputation as a leading manufacturer of performance athletic apparel on technical fabric innovations, particularly its moisture-wicking HeatGear and ColdGear products, which cater to athletes across various sports and climates. Last year, founder Kevin Plank returned to the CEO role to spearhead a 'strategic reset' focused on premium brand positioning and operational efficiency improvements. This has included shifting from the previous product-focused approach to a more consumer-centric, category-managed operating model, designed to better serve the needs of athletes. The company's recent Q4 FY2025 results suggest it has yet to get meaningful traction with its turnaround efforts. Revenue declined 11% year-over-year to $1.2 billion, with weakness evident across major markets, as U.S. sales fell 11%, international revenue dropped 13%, and the Asia-Pacific region declined 27%. Weak top-line performance and ongoing restructuring expenses have resulted in the company posting a net loss for the year of $201 million, with an earnings per share loss of $0.47. Evaluating UAA's Valuation and Momentum The stock currently trades near the midpoint of its 52-week range, $4.78 to $11.89. It reached its all-time high in 2015, trading above $50, then cascaded down over the following years, falling to under $5 earlier this year. However, over the past three months, the stock has experienced a notable rise, climbing 27% during that period. Despite the recent price run-up, the stock still trades at a relative discount, with a price-to-sales ratio of 0.61x, compared to 1x for the Consumer Discretionary sector, 2.42x for Nike (NKE), and 1.61x for Adidas (ADDYY). The shares exhibit positive price momentum, trading above most major moving averages (except for the 200-day moving average, though it is closing in on surpassing that level as well). Other technical indicators are neutral-to-bullish. Is UAA a Good Stock to Buy? On Wall Street, UAA stock carries a Hold consensus rating based on four Buy, 13 Hold, and three Sell ratings over the past three months. UAA's average stock price target of $6.84 implies approximately 4.5% downside potential over the next twelve months. Analysts following the company have taken a cautious stance, with many lowering their price targets for the shares. For instance, Goldman Sachs analyst Brooke Roach recently lowered the firm's price target on the shares to $6.50 (from $7) while maintaining a Neutral rating, noting the potential impact of elevated tariff rates. Similarly, Truist's Joseph Civello lowered the price target on Under Armour shares to $7 while reiterating a Hold rating, citing Q1 FY2026 guidance that came in well below expectations. In a research note, the analyst declared himself 'incrementally cautious' about the company's future outlook, with the impact of potential tariffs yet to be resolved. Conversely, Simeon Siegel at BMO Capital kept an Outperform rating on the shares while lowering his price target to $9 (from $12). He observed that Q4 results marked ongoing improvement in gross margins on lower revenue, as management works to turn the business around. He maintains that focusing on improving margins can act as a lever to enhance profitability and drive share growth over time. UAA Stock in Summary Under Armour is undergoing a turnaround effort aimed at regaining brand momentum and strengthening its market position. The company's strategic reset centers on leveraging its core strength in technical performance wear to deliver premium products and stand out in a highly competitive landscape. However, continued revenue declines across all major regions suggest deeper structural issues that won't be resolved quickly. Negative profitability further clouds the path to sustainable cash flow, especially as well-capitalized competitors like Nike and Adidas maintain pressure on market share. While the firm's bold reset has delivered some early signs of progress, reversing persistent revenue losses and restoring profitability remains a formidable challenge. Until Under Armour demonstrates measurable improvement in these key areas, the turnaround is likely to remain stalled. The stock trades at a relative discount, but this valuation appears to reflect market doubts about the company's ability to execute a successful transformation. Analyst price targets indicate limited upside in the near term, given the associated risks. I maintain a Neutral stance on the stock and will look for signs of margin improvement that could support a more constructive view going forward.
USA Today
19-07-2025
- Sport
- USA Today
Baltimore Ravens preseason dates to circle
It's not just football talking season anymore, as Baltimore Ravens training camp has opened. Rookies reported to camp this past week, and that means the preseason is here It's not just football talking season anymore, as the Baltimore Ravens training camp has opened. Rookies reported to camp this past week, and that means the preseason is here. The first public viewing practice, at the Under Armour Performance Center, is just a few days away. And Under Armour is about as Maryland as crab soup, Old Bay, and Babe Ruth (he's forever a New York Yankee, but has pure Baltimorean roots). The company is based in Baltimore and was founded by Kevin Plank, a Kensington, Maryland native and University of Maryland graduate. If you're heading to the Under Armour facility in Owings Mills, MD, or following along online and in other media, here are the dates to note. Wednesday, July 23 The first open practice of training camp commences this Wednesday. If you want to catch the action, then you've got to get in and grab a good seat on the bleachers by 2:15 p.m. August 3 (Stadium Practice): 3:00 p.m. ET Every NFL team does a special day/evening practice at their home stadium, with these events having various branding names. "Stadium Practice" is a fantastic opportunity for people who can't really afford the sky-high price of game tickets to get in and see the venue. It's also a very family-friendly event. Tuesday, August 5 (Joint Practice with Colts): 1:00 p.m. ET It's the first opportunity to learn something about the overall quality of this team. And then we may learn a little more when these two teams square off two days later. August 7: Ravens vs. Colts – 7 p.m. ET (NFL Network) It's the Ravens' only nationally televised preseason game, and it's their only home preseason game this summer. Tuesday, August 12 The final open practice of 2025 kicks off at 1:30 p.m. ET. And wraps. August 16: Ravens at Cowboys – 7 p.m. ET It's a rematch (sort of, because obviously, the lineups will be entirely different) of the Ravens' first win in 2024, which came in week three. Baltimore's 28-25 victory came mainly on the strength of Derrick Henry, who rushed for 151 yards and two touchdowns on 25 carries. August 23: Ravens at Commanders – noon ET The famous third preseason game, which conventional wisdom tells us is the closest to a real game (traditionally) of the whole preseason slate, is only 34 days away now. When it arrives, it'll be another edition of the Beltway rivalry, which the Ravens won 30-23 on October 13.
Yahoo
03-07-2025
- Business
- Yahoo
5 Must-Read Analyst Questions From Under Armour's Q1 Earnings Call
Under Armour's first quarter results reflected ongoing efforts to reposition the brand through tighter control of promotional activity and a sharper focus on premium product positioning. Although revenue declined year over year, management credited proactive inventory management, a disciplined reduction in discounting, and advances in direct-to-consumer (DTC) strategies as key drivers. CEO Kevin Plank noted, 'Our fourth quarter results allowed us to exceed our fiscal outlook, demonstrating some of the foundational traction we're gaining as we reposition the Under Armour brand.' The company's transformation plan emphasized higher-quality revenue and brand equity over short-term volume gains, setting the stage for a more sustainable business model. Is now the time to buy UAA? Find out in our full research report (it's free). Revenue: $1.18 billion vs analyst estimates of $1.17 billion (11.4% year-on-year decline, 1.3% beat) Adjusted EPS: -$0.08 vs analyst estimates of -$0.08 (in line) Adjusted EBITDA: $3.41 million vs analyst estimates of -$4.15 million (0.3% margin, significant beat) Revenue Guidance for Q2 CY2025 is $1.13 billion at the midpoint, below analyst estimates of $1.17 billion Adjusted EPS guidance for Q2 CY2025 is $0.02 at the midpoint, above analyst estimates of $0 Operating Margin: -6.1%, down from -0.3% in the same quarter last year Locations: 441 at quarter end, up from 440 in the same quarter last year Constant Currency Revenue fell 9.8% year on year (-4.9% in the same quarter last year) Market Capitalization: $2.95 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jay Sole (UBS) asked about the status of the North American reset and how it is progressing. CEO Kevin Plank detailed the leadership changes and emphasized a comprehensive approach involving product, storytelling, and targeted marketing as key to regaining brand affection. Simeon Siegel (BMO Capital Markets) inquired about the normalization of e-commerce and the timeline for revenue stabilization as promotions are reduced. Plank responded that the e-commerce shift is focused on building a healthier, brand-right foundation with loyalty and dynamic content, while Bergman highlighted the full-price sales mix and ongoing digital investments. Sam Poser (Williams Trading) questioned inventory trends and the relationship between unit and dollar inventory as the company moves toward a premium strategy. Plank explained that inventory is being tightly managed and that higher average unit retail is a key focus in elevating the brand. Laurent Vasilescu (BNP Paribas) asked about the order book and whether recent tariff news had changed partner behavior. Bergman said there were no significant cancellations and that partners were seeing improvements in product design and style, with stronger execution expected as new collections roll out. Peter McGoldrick (Stifel) requested insight into the evolving product pyramid and its impact on average selling prices and gross margin. Plank described the goal to increase the share of 'best' products as a driver of both pricing power and brand positioning, while Bergman noted that mix changes and reduced promotions should support margin improvement. Looking ahead, the StockStory team will be monitoring (1) the pace and effectiveness of Under Armour's North American brand reset, including e-commerce and promotional strategies, (2) the impact of new premium product launches like UA Halo and continued innovation in footwear and apparel, and (3) the company's ability to offset potential headwinds from tariffs and global supply chain adjustments. Progress in international market momentum and execution of cost control initiatives will also be key indicators. Under Armour currently trades at $7.10, up from $6.22 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
24-05-2025
- Business
- Miami Herald
Under Armour makes a drastic change to take on Lululemon
It may not seem like it, but if you squint hard enough, there are still glimmers of hope to be found in the retail industry. In some cases, entire brands are flying high. Related: Home Depot local rival closing permanently after 120 years This is certainly the case if you bought Lululemon (LULU) before the pandemic. Either the stock or the leggings. If you bought the leggings before the pandemic, the purchase likely set you back around $100. But the pants are meant to last, and you've probably spent quite a bit of time lounging or exercising in them over the past few years. It might even be safe to assume you're happy with your purchase. And if you bought Lululemon stock before the pandemic, it's probably safe to assume you're even happier. For years, analysts have been saying Lululemon is either the best buy in retail or too rich for value investors. It depends on how you look at it, but the truth probably lies somewhere in the middle. Lululemon is up over 17% since the onset of Covid. This is a decent return. But if you compare it to some of the other so-called darlings of the pandemic, like Moderna, Pfizer, Peloton, or Chewy, Lulu would've been the safest bet by a country mile. If Lululemon isn't your thing, there are plenty of other companies to consider, whether you're looking to bet on the future or bet on your closet. Under Armour (UAA) , the Maryland-based fitness apparel brand, has struggled for years under the heavy burden of excess inventory and never-ending promotions. More Retail: Home Depot makes drastic budget-friendly move to take on Lowe'sStruggling cosmetics brand sounds alarm, laying off thousandsPopular Trader Joe's wine brand has bad news, making harsh choiceStruggling retail chain sounds the alarm on growing problem As a result, the brand had something of an identity crisis in the late 2010s and early 2020s, while other high-flying brands like Lululemon, Nike, and newcomers such as Alo Yoga and Vuori ramped up competition. After consecutive quarters of declining sales (and negative e-commerce growth), Under Armour was no longer considered a premium brand. But neither did it offer customers a value proposition that others do, like the Target-owned brand Up & Up. So it's been quietly embarking on something of a turnaround plan. One of the central approaches Under Armour has been taking to revamp business is to reduce its SKU count. This means it's been painstakingly culling all of its inventory and getting rid of less-popular or repetitive items that no longer accelerate underlying brand value. Under CEO Kevin Plank, Under Armour has reduced its total SKU count by one quarter. Related: Bankrupt department store unexpectedly receives a savior And as it trims its offerings, it's replacing some products with pricier ones, which it hopes will give the brand a more premium feel. For example, it's now selling a new, streamlined-looking backpack for $140. Lululemon sells a similar-looking bag for $98. The new strategy comes at a cost; Under Armour has spent a massive $89 million trying to right the ship. "Our priorities are clear: win in men's apparel, unlock the full potential of footwear and strengthen our connection with women, starting with trusted essentials like bras and bottoms and then building from there to grow her affinity for Under Armour," CEO Kevin Plank said on the Q4 earnings call. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
14-05-2025
- Business
- Yahoo
Under Armour sees Q4 & FY25 revenue dip, shares tariff mitigation
Under Armour's downturn in FY25 was observed across all regions, with the company's North American revenues falling by 11%. The international segment also experienced a decrease, with revenues contracting by 6% to reach $2.1bn. Revenues generated from owned and operated stores saw a 2% dip, while e-commerce revenues plummeted by 23%, attributed to deliberate reductions in promotional activities. In terms of product categories, apparel revenues decreased by 9% to $3.5bn, footwear followed suit with a 13% decline to $1.2bn, whereas accessories bucked the trend with a modest 1% increase to $411m. Under Armour president and CEO Kevin Plank said: "One year into our strategic reset, we're laying the groundwork for a more focused Under Armour. By elevating products and storytelling, tightening distribution, and refining our operating model, we are in the process of reigniting brand relevance and positioning the business for sustainable, profitable growth. Our fourth quarter performance contributed to fiscal 2025 results that were better than the expectations we set a year ago and we are demonstrating traction in our efforts to reposition the brand." Looking at gross margins for FY25, Under Armour reported an improvement of 180 basis points to 47.9%. This was credited mainly to supply chain efficiencies that led to decreased freight and product costs, alongside reduced discounting in direct-to-consumer sales. However, these gains were partially negated by adverse effects from changes in regional and channel mix as well as foreign currency exchange rate fluctuations. Net loss for the year was recorded at $201.27m compared to a net income of $232.04m in the prior fiscal year. However, when adjusted for specific items, net income was at $135m. This translates to diluted loss per share of $0.47 in FY25 compared to earnings per share of $0.52 in fiscal 2024. Under Armour saw an 11% revenue decline with North American revenue decreasing by 11%, and international revenue falling by 13%. Revenue from owned and operated stores declined by 6%, while e-commerce revenue dropped significantly by 27% due to continued planned reductions in promotional activities. The gross margin for Q4 increased by 170 basis points to 46.7%, primarily driven by supply chain benefits such as lower product and freight costs and reduced discounting in direct-to-consumer sales. Net loss for Q4 was reported at $67.46m with an adjusted net loss of $35m. Diluted loss per share was at $0.16 while adjusted diluted loss per share was at $0.08. Under Armour recognised a total of $58m in restructuring and impairment charges alongside $31m in other related transformational expenses by the end of Q4 FY25. The plan, announced in May 2024, is expected to incur costs ranging from $140m to $160m with up to $90m anticipated as cash-related charges and up to $70m as non-cash charges. Under Armour has provided guidance only for the first quarter of fiscal 2026, amid uncertainties surrounding trade policies and macroeconomic conditions which include potential impacts from tariffs on demand and costs. In the first quarter, revenue is projected to decrease between 4-5% compared to Q1 FY25. Gross margin is expected to improve between 40-60 basis points over the previous year due to a more favourable product mix along with lower product and freight costs coupled with positive foreign exchange impacts. In the earnings call, Under Armour chief financial officer David Bergman indicated that the company is taking proactive measures in anticipation of significant impacts from shifts in trade policy. The strategies being considered include collaborative cost-sharing with key partners, diversifying the sourcing base to reduce reliance on regions that might be affected by these changes, and selectively adjusting prices to maintain profit margins in markets where they have the ability to do so. In terms of Under Armour's global sourcing distribution, Bergman clarified that Vietnam accounts for about 30% of their production volume, Jordan contributes 20%, and Indonesia makes up 15%. The remaining 35% is spread across various other countries, each contributing a smaller share in the low to mid-single-digit percentage range. Bergman said: 'This deliberate diversification creates a well-balanced portfolio, reducing reliance on any single market and enhancing our ability to navigate geopolitical costs and supply chain complexities from a position of strength.' 'It is important to highlight, however, that changes in tariff policy are not expected to significantly impact our first quarter,' he added. "Under Armour sees Q4 & FY25 revenue dip, shares tariff mitigation" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
