• by Sarah Mahoney , May 9, 2023

Short term, the news from Under Armour isn’t great. In posting fourth-quarter results that were mostly in line with expectations, it sees continuing weakness in the U.S. and the need to rely on more promotional pricing to win sales in the months ahead.

But in her first official outing as chief executive officer, newcomer Stephanie Linnartz laid out extensive plans for the company to begin delivering on its potential for customers and investors.

Her priorities? “Delivering elevated design and products, focusing on Sportstyle, footwear, and women; and positioning us to drive better sales growth in the U.S.”

In a webcast for investors, she said the coming year will be one of building, with many initiatives not paying off until 2025.

For the fiscal fourth quarter, sales rose 8% to $1.4 billion, with wholesale revenue climbing 10% to $909 million and direct-to-consumer adding 3% to $454 million. In North America, sales notched a gain of just 3%.

By category, apparel sales added 1% to $889 million, footwear jumped 27% to $378 million, and accessories sales slipped 1% to $96 million.

Profit margins declined, primarily due to higher promotions.

Net income rose to $170.5 million, compared with a net loss of $59.6 million, during the year-earlier period.

In the immediate future, the Baltimore-based company is building the Curry Brand, following last month’s announcement of a long-term extension with basketball great Stephan Curry. As part of the deal, Curry reportedly got $75 million in Under Armour stock, considerably more than his current $45 million paycheck from the Golden State Warriors.

And Linnartz, who joined Under Armour earlier this year from Marriott, says observers can also expect to see a radically stepped-up use of the “Protect this house” marketing platform.

The company recently rebooted the campaign, and this time, “it’s a new call to action, reaching people whose motivations differ from previous generations,” Linnartz says.

Company promos will be visible at more events and in digital, with an especially strong presence in the coming Women’s World Cup games. The ads will highlight “the grit, edge and swagger needed to perform on the world’s most elite stage.”

Linnartz says that with women’s products accounting for just 25% of sales, the growth potential is vast.

“We have yet to make our definitive 'must-have’ product for women, and footwear must be part of the equation. We will go after women harder than this company has ever seen.”

She adds she is searching for a new chief consumer officer and looking to add world-class marketing and design talent.

David Swartz, an analyst who covers the company for Morningstar, says that while the quarterly results were close to expectations, the outlook for next year’s revenues are disappointing. Morningstar now predicts sales will be flat or up slightly.

While sales growth and margin improvement under Linnartz may not be apparent until fiscal 2025, Swartz views the company as undervalued. “We believe it has competitive strengths, including its position as a premium athletic brand.”