Today (August 1, 2017) Under Armour once again reported disappointing earnings results. Earnings missed expectations and its revenue guidance of up 9-11 percent was lowered from previous guidance of up 11 to 12 percent. The company announced a restructure plan, which translates to 280 people being laid off at its Baltimore headquarters.
It’s been a very tough year for the once high-flying Under Armour. Under Armour shares are down 30 percent in 2017 so far, and 40 percent in the past 12 months.
While there have been rumors Under Armour has brought on A$AP Rocky to add some cool to the brand, no mention was made of the signing in the press release or on the earnings call.
Under Armour pointed at a very promotional North American environment as hurting its results. “A dynamic and promotional retail environment in North America continued to temper results with revenue in line with last year’s same period,” said Under Armour.
On the plus side the brand’s business is positive in Europe and China, though its international business in total only makes up about 11 percent of its sales.
Started as a performance apparel brand in 1996, Under Armour has struggled as the the market has become flooded with stretch activewear apparel and at the same time trends have shifted to lifestyle looks. As well, it’s facing unprecedented competition in North America from Adidas, a brand CEO Kevin Plank described as his “dumbest competitor” in February 2015.
And while footwear has been a positive for the brand overall, its design team is viewed as below average and behind the curve on trends and as a result it’s struggled to sell higher-priced footwear.
