FutureStarr

How Under Armour Lost Its Edge

How Under Armour Lost Its Edge

blog_img

how under armour lost its edge

Under Armour has achieved remarkable success since its founding in 1996, becoming one of the largest sports apparel brands globally.

However, the industry has also suffered. A variety of factors have contributed to this decline.

1. Undervaluation

Under Armour was once a leader in sports apparel, but its growth is slowing. With fierce competition and consumers shifting away from traditional athletic gear, the company is struggling to stay relevant.

Investors must take into account a variety of factors before deciding whether or not to purchase shares of Under Armour. These include valuation, growth prospects and quality.

Stock valuation is an essential aspect of investing, as it helps determine the worth of an investment. This process involves comparing a company's stock price with its earnings, cash flows and other metrics.

Under Armour has recently begun to experience undervaluation if its earnings aren't growing at an adequate pace or it has yet to reach its full potential. As a result, its stock price has decreased substantially from its 2015 highs.

Under Armour has been steadily losing market share to rivals such as Nike and Reebok, leading them to believe that these are signs of trouble ahead.

Due to these challenges, it is now experiencing slower sales growth and higher costs. Furthermore, it has had difficulty procuring inventory to meet consumer demand - leading to an increase in inventory levels that negatively impacted gross margins and profitability.

Good news for Under Armour fans, as the company recently unveiled a customization platform which should boost brand value and engagement. This initiative is significant as it allows customers to design their own customized shoes.

Additionally, this strategy could potentially attract new customers who require more customized shoes. Competing against larger competitors and increasing revenue are two potential benefits that the company could gain from this move.

Finally, Under Armour has announced plans to repurchase $300 million worth of shares, helping the company maintain its strong financial position. This could potentially drive the stock price up and enhance its intrinsic value.

Despite these encouraging trends, Under Armour remains a risky stock to invest in. While its stock is currently trading at a discount and analysts anticipate growth for the next two years, investors should not ignore its past performance.

2. Underinvestment

Kevin Plank's athletic apparel company, Under Armour, has struggled to regain its momentum after starting in her grandmother's basement. Recently, its stock has been falling and scrutiny of its CEO is growing. Investors are worried about Under Armour's accounting practices and some shareholders have even filed lawsuits against it.

Under Armour has struggled to sustain its rapid growth rate and is now struggling to remain profitable. Its latest quarterly report indicates the brand may soon return to losses as rising shipping costs and supply chain issues complicate matters.

One way to increase a company's profitability is by concentrating on its core business and investing more in it. This strategy can ultimately result in higher sales and profits over time.

Another area the company should examine is its R&D spending. Under Armour has been underinvesting in R&D for years, which has contributed to slower sales growth. Nike and Adidas are leading the pack when it comes to technology advancements.

However, Under Armour remains behind these other brands in terms of innovation. It hasn't even taken advantage of the "athleisure" trend that has driven sales for Nike and Adidas, suggesting it might be time for Under Armour to reevaluate its R&D priorities.

If the company wants to gain ground, it must focus on sneaker culture. Success will hinge on its ability to foster a "drop culture" that rejects mass availability and demands performance from customers.

It must also prioritize its consumer base and foster a loyal following. To do this, the business must invest in various digital marketing tools.

Furthermore, it must improve customer service and guarantee customers feel valued. This requires a lot of work but must be done correctly.

In 2015, the company purchased a collection of digital apps with the goal of becoming more "digital." However, it failed to consider how these assets would fit into its value chain and lacked data integration strategies that would enable it to gain insight into customer behavior.

3. Disruption

Under Armour made its mark as a tech-driven sports apparel company that didn't just make clothes for athletes; their products were designed to improve performance. Their first product was a T-shirt that wicked away sweat, followed by sleepwear designed to help athletes recover after workouts.

As the company rose to prominence, its commitment to innovation was widely praised. It launched Charged Cotton shirts that dry quickly and perform well, then expanded with Charged Cotton Storm: a quick-drying cotton shirt featuring water resistant technology.

Under Armour is well known for their running shoes and baseball gloves, as well as having some high-profile endorsers such as Golden State Warriors superstar Steph Curry.

Under Armour remains a major player in the sports industry, yet its popularity has suffered due to several issues. These include lawsuits against the company, inquiries into how Under Armour CEO Kevin Plank and his family have managed their private holdings, and media coverage of real estate deals being investigated by federal authorities.

Additionally, sales of their most sought-after item - the signature Curry 3 basketball shoe - have fallen precipitously. This has caused friction between company founder and CEO Kevin Plank and high-profile endorser Stephen Curry.

The disconnect between Plank and Under Armour's president/CEO, Patrik Frisk, caused a rift within their corporate culture. To attempt to repair things, Plank and Patrik Frisk traveled to the West Coast in July 2018 in an effort to patch things up.

They spent the day meeting with Curry and his wife, Desiree Jacqueline Guerzon (known as D.J.), to try to repair their relationship and convince Curry to remain with the brand.

Unfortunately, their efforts proved insufficient and caused Under Armour to lose its status as an iconic brand within sports apparel and undermine their business model.

Under Armour has thus far failed to capitalize on cultural branding strategies to reach consumers and build their brand image in an impactful way. They need to adopt the same principles used by other renowned brands in their category and proactively engage their audience through cultural branding tactics. Doing this will help them establish authenticity and cool, which are better suited for the current customer base that the company serves.

4. Instability

Under Armour is a leader in athletic gear manufacturing, including shoes, t-shirts, sports bras and other apparel and accessories. Recently they've expanded into new product categories like sleepwear designed to expedite natural recovery processes within the body.

Though the company is going through a major transformation, it still has a sound financial position and an established brand with plenty of cachet. Its high-profile athletes, from future NFL Hall of Famers to gold medal skiers and world champion MMA fighters, remain its biggest draw. Its marketing team has successfully combined data-driven initiatives with classic school marketing techniques for maximum effect.

One such app is MapMyFitness, which allows consumers to input running shoe purchases and track their miles. It has several useful features like automatic mileage calculation based on wear patterns and time of day. Although not a core business for the company, this expansion expands their presence in an extremely competitive industry and could potentially spur additional innovations down the line.

Though the company may have lost its edge, it still produces some of the most stylish sneakers on the market and may have something exciting in store for you soon. Meanwhile, there are plenty of companies out there doing a better job at captivating today's savvy shopper's attention. To stay competitive, one must identify potential opportunities and be prepared to seize them when they arise.

Related Articles

  • Related Blog Image

    Sabrina Elba Stuns on the Blue Carpet at The Little Mermaid Premiere

    Explore
    Author Profile Image
    May 17, 2023     |     Future Starr
  • Related Blog Image

    Understanding the #Hannahowo OnlyFans Leak: Consequences, Implications, and Lessons Learned

    Explore
    Author Profile Image
    August 14, 2023     |     Future Starr
  • Related Blog Image

    The Significance of Giving Your Baby Your Last Name

    Explore
    Author Profile Image
    June 16, 2023     |     Future Starr
  • Related Blog Image

    Charli XCX Totally Missed Harry Styles' Shout-Out to Her at the BRIT Awards

    Explore
    Author Profile Image
    March 03, 2023     |     Future Starr
  • Related Blog Image

    #Where the Crawdads Sing Showtimes: Movie Times, On Demand Streaming & FAQ

    Explore
    Author Profile Image
    September 26, 2023     |     Future Starr
  • Related Blog Image

    How Many Teaspoons Are in a Half a Cup?

    Explore
    Author Profile Image
    December 02, 2021     |     Future Starr
  • Related Blog Image

    Every Non-English-Language Song to Reach the Top 10 of the Billboard Hot 100

    Explore
    Author Profile Image
    February 28, 2023     |     Future Starr
  • Related Blog Image

    Why Kim Kardashian Refuses to Be Kanye's Cleanup Crew

    Explore
    Author Profile Image
    June 02, 2023     |     Future Starr
  • Related Blog Image

    Coffee Tables - $17000 For a Coffee Table

    Explore
    Author Profile Image
    February 18, 2023     |     Future Starr
  • Related Blog Image

    #Rangers win ALDS Game 1 thanks to Evan Carter's dream October, Bruce Bochy's steady hand 2023

    Explore
    Author Profile Image
    October 07, 2023     |     Future Starr
  • Related Blog Image

    #Why Every Fan Needs a Brock Bowers Jersey in Their Collection

    Explore
    Author Profile Image
    September 23, 2023     |     Future Starr
  • Related Blog Image

    Exploring the Impact of Damian Lillard's Trade Request on the Trail Blazers

    Explore
    Author Profile Image
    July 02, 2023     |     Future Starr
  • Related Blog Image

    The Powerball Jackpot Rolls Over to $73 Million

    Explore
    Author Profile Image
    February 16, 2023     |     Future Starr
  • Related Blog Image

    Jeswin Aldrin Breaks National Record in Men's Long Jump

    Explore
    Author Profile Image
    March 02, 2023     |     Future Starr
  • Related Blog Image

    Uber Puts a Ride Tracker on the iPhone Lock Screen

    Explore
    Author Profile Image
    January 25, 2022     |     Future Starr