Under Armour's U.S. Sales Continue To Fall

Under Armour is reporting good news for investors, with fourth-quarter revenues climbing 4.6% to a better-than-hoped-for $1.4 billion, fueled by strong demand in Asia and Latin America. But the increase masks a continued decline here at home, with sales in North America dropping 4.5%. It posted a net loss of $88 million, and says it expects a mid-single digit decline in North American sales going forward.

The Baltimore, Md.-based sports brand says the results, which follow a decline of more than 12% in North American sales last quarter, reflect that “the tough decisions we're making are generating the stability necessary to create a more consistent and predictable path to deliver long-term value,” says chairman and CEO Kevin Plank in the announcement.

By category, apparel sales grew 2% to $952 million, with strengths in men's training and global football and declines in the outdoor category and team sports. Sales of footwear climbed 9% percent to $246 million, with running doing well and softness in team sports and basketball shoes.



While some of the struggles can be pinned on the industry, with rival Nike struggling with its own issues, Under Armour “seems to have lost power,” writes Neil Saunders, managing director of GlobalData Retail, in his comment on the results. “Under Armour has spent too much time trying to expand its footprint and product coverage, and too little time building connections with customers,” pointing out that $44 million in its operating loss stems from North America.

Besides weak customer service at its own stores, “expansion into retailers like Kohl's has weakened exclusivity and made the brand feel commoditized and ubiquitous.”

Meanwhile, Under Armour, which has struggled in its efforts to sell to women, has its Olympic hopes pinned on alpine skiing legend Lindsey Vonn, competing in what may well be her last Olympics. Besides a new Vonn spot in its ongoing #UnlikeAny campaign, Under Armour produced the inspiring Ice Blazers series, focusing on the upbeat story of the women’s Nigerian bobsled team. (The group represents the first bobsledders from Africa, and the first winter Olympians from Nigeria.)

Next story loading loading..