Under Armour Is Killing Its Brand By Selling At Cheap Retailers
Shares of Under Armour fell 3.7 percent Tuesday after one Wall Street firm downgraded the athletic clothing maker to negative. Despite a 30 percent rally in the past eight weeks, Under Armour will reverse course and lose all of those gains in the next year, according to Susquehanna Financial Group. “Sell Under Armour. The Under Armour brand remains at risk,” analyst Sam Poser warned in a note to clients. “Given poor brand distribution decisions, we believe Under Armour risks are becoming more like Reebok than Nike. … There is no fundamental recovery in sight.” Highlighting “poor brand management,” Poser said the company could shed market cap if it continues to advertise with lesser retailers. In the analyst’s view, advertising with “moderate” retailers — an industry term to reflect prices — is causing “better” retailers like Dick’s and Hibbett to plan to reduce their Under Armour business. “Better sports retailers are the heart and soul of Under Armour’s heritage and long-term profitable growth opportunities,” wrote Poser. “The opening of distribution to Kohl’s, DSW, and Famous did change the perception of Under Armour, and not for the better.” Read more at CNBC.
