@IBD_elow Breaks that Stores are ‘Canceling’ Under Armour Orders

New changes at Nike include a 2% cut to its global workforce. Meanwhile, one analyst says stores are “likely canceling” Under Armour product orders.

Source: Nike To Shrink Workforce As Stores Seen ‘Canceling’ Under Armour | Stock News & Stock Market Analysis – IBD

As information broke this morning on layoffs looming at Nike, Elaine Low reported that Under Armour is also seeing hits¬†in its stock price based on analysts reports. The brand is losing orders on its product from retail stores and analyst don’t see anything to fix the problem.

Meanwhile, Susquehanna reduced its Under Armour profit and sales estimates for fiscal 2017 and 2018 on expectations that stores such as Dick’s Sporting Goods (DKS), Hibbett (HIBB),¬†Academy, Modell’s and Scheel’s “will shrink their exposure to Under Armour in response to the poor product segmentation and the little progress in fixing the problem.”

I’ve been writing recently about the lack of action by Under Armour when analyzing the Steph Curry line as well as the speed of content creation and marketing when big events featuring Under Armour athletes take place.

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I’ve said on several occasions that UA could do a serious job of promotion utilizing its athletes after large events. Yet Under Armour hasn’t created any “real” marketing campaigns.

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The company has been stagnant after stating last year during Q3 2016 that they would ramp up marketing expenses which would hinder margins. They have yet to ramp up marketing and Wall Street is taking notice that the brand is basically relying on their past growth to convey that they will turn the corner again.

This quick report by Elaine Low is more about Nike, but it confirms that analysts are reading Under Armour in the same way that I have and that’s not a good thing.

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Chris Burns
Chris Burns
Founder, Writer and Webmaster at ARCH & CBP
Chris B. is the founder of ARCH.

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