Under Armour shares fell 15% following the announcement of poor second-quarter earnings this week and announced it expects sales to decline in North America throughout 2019.
While similar sports retailers like Nike and Adidas are posting positive sales growth numbers relatively consistently in past years, Under Armour has sputtered. Under Armour wasn’t always the trouble-stricken brand that it is today – it once seemed poised to overtake the sportswear market. From its rise to a once-$15 billion athletic-apparel empire and its eventual slow decline, here is the complete story of Under Armour so far.
Kevin Plank, a team captain on the University of Maryland football team, wanted to design athletic-wear that could withstand sweat and intense activity. He founded Under Armour in 1996 and designed the first prototype that year. Plank sold his merchandise from his grandmother’s basement before it made major deals with Georgia Institute of Technology and North Carolina State University. Plank sent prototypes to contacts in the NFL to spread the word. NFL Stars eventually bought some shirts and it made the jump from college to professional.
Sales exceeded $200 million by 2004 and Plank took the company public in 2005, raising $157 million in the IPO. Endorsements and media attention were helping the brand solidify among the titans of sport and athletic wear. In 2010, the company signed an endorsement deal with legendary quarterback Tom Brady.
Under Armour began to include women in its advertisements and endorsements. In 2014, the company signed Gisele Bundchen, Tom Brady’s wife, and featured ballerina Misty Copeland in an advertisement that went viral.
Under Armour bought MapMyFitness in 2013 for $150 million, followed by Endomondo for $85 million and MyFitnessPal for $475 million in 2015. The acquisitions of fitness and health-focused apps and technology were an effort to expand its digital offerings.
Under Armour experienced a setback in 2014 when the suits it designed for the US speed skating team were blamed by some for slowing down Olympic skaters. That same year, Under Armour became the second best-selling sportswear brand in the US, surpassing Adidas but still trailing behind Nike by a wide margin.
In 2016, Under Armour introduced the UA SpeedForm Gemini 2 Record Equipped, its first smart shoe with a built-in sensor to store and track data. It also announced it would become the official supplier of uniforms for Major League Baseball.
In 2017, the company introduced sleepwear to help speed up the body’s recovery process. It was a turning point for Under Armour. The company’s stock fell more than 40%, it reported its first quarterly loss ever and five top executives left the company. Plank also upset many customers when he praised President Trump calling him “a real asset for the country.”
In 2018, another blow when athletes at UCLA refused to wear Under Armour’s shoes complaining that the bottoms were peeling off, a deal worth $280 million. Under Armour had $1.3 billion in leftover merchandise in 2018, shrinking popularity among teens, and a scandal involving executives going to strip clubs as a company expense. Under Armour also announced a round of layoffs and a turnaround plan to increase offerings for women and to focus more on the consumer.
In 2019 Under Armour backed out of its agreement with MLB to supply uniforms. Uncertainty quickly returned. Both sales and shares fell. In September Under Armour announced a new North American president.
Have you heard the one about the bad pole-vaulter? It never goes over very well