Under Armour Will Exit 2,000-3,000 North American Doors
Aiming to hone its marketing and product messages that will eventually result in a double-digit operating margin over the long-term, Under Armour is borrowing a page out of the Nike playbook. Over the next two to three years, starting in June, the Baltimore company intends to exit 2,000-3,000 undifferentiated wholesale accounts and to work building back a segmented, premium positioning within ongoing and new specialty retail accounts.
Under Armour President and CEO Patrik Frisk told analysts last week that the company’s 2021 mission is four-pronged—continuing to strengthen the brand through increased engagement, a strengthened operating model, an elevated Direct-To-Consumer approach and a stronger connection with the brand’s best customers.
From a product perspective, the latter will come from performance-focused rollouts in basketball (Curry subbrand), running (for shelf expansion withing run specialty and key wholesale accounts) and team (new cleated offerings in baseball, football and soccer) as more scholastic and collegiate players return to fields and pitches in a post-pandemic world. There is a new cushioning platform in UA Flow and new innovations will be introduced this year in both HeatGear and ColdGear apparel.
In FY2020, Under Armour’s North American revenues slipped 19 percent to $2.9 billion as its overall apparel business declined 17 percent to $2.9 billion and footwear sales slid 14 percent to $934 million. More positive numbers of note included a 40 percent increase in annual ecommerce sales amid the COVID-19 pandemic and a decline in sales into off-price channels to approximately 4 percent of annual sales.
Projected to complete restructuring charges in H1/21, the company is currently forecasting a high-single digit increase in full-year revenues that include a high-single digit increase in North America and a high-teens growth rate internationally. Retail sales are projected to outpace ecommerce growth this fiscal year due to digital’s strong FY2020 comps. Meanwhile in 2022, Under Amour’s fiscal year will shift to start April 1, leaving a three-month stump period between Jan. 1 and March 31, 2022.