Under Armour’s unofficial restructuring has claimed another executive and Wall Street isn’t exactly taking it in stride.
Shares of the athleticwear company fell 5.8 percent in after-hours trading to $11.36, a fresh low, after Under Armour said it’s parting ways with Peter Ruppe, its senior vice president of footwear. The move comes about three weeks after WWD reported that Ben Pruess, president of sports fashion, is leaving the brand.
A company spokeswoman declined to specify any reason for Ruppe’s departure, but said Ryan Drew is set to assume the role of head of footwear. Drew currently serves as vice president and general manager of Under Armour’s global basketball division.
Kevin Plank, Under Armour’s founder and chief executive officer, said in August the company was “pivoting” as once consistently double-digit growth has slowed in recent months and sales in North America have dwindled next to stiff competition from Nike and Adidas.
The de facto restructuring plan came within weeks of Patrik Frisk, a veteran of VF Corp. and Aldo, coming on as president and chief operating officer. Under Armour made a number of other management changes around that time, including naming a chief technology officer and a chief supply chain officer.
Although change has now been in the works for the better part of this year, Under Armour is still struggling and further executive and operational shifts seem likely.
During the third quarter, the company saw revenue fall by 5 percent to $1.4 billion, driven by an 8 percent decline in apparel sales and relatively flat footwear and accessories sales. Net income fell to $54.2 million from $128.2 million a year ago, partially impacted by $89 million in costs related to the ongoing restructuring plan.
Plank said at the time that “we understand the issues that put us in this position” and characterized 2017 as “a reset” for the company — which posted quarterly growth of more than 20 percent for more than six years starting in 2010. He alluded to “growing pains” and upcoming changes for Under Armour as “a brand, company and culture.”
Footwear, one of Under Armour’s biggest areas of focus for expansion and marketing led by a multimillion dollar and multiyear deal with basketball star Stephen Curry, has been called out repeatedly for lackluster performance. Footwear sales during the third quarter rose 2.2 percent to $285 million.
When discussing the results at the end of October, Frisk said the category “is falling short of our expectations,” citing lack of demand in North America. He added that Under Armour is “working diligently to proactively fine-tune our footwear playbook and ensure we deliver the right innovation, style and price-to-value equation at the right place and at the right time.”
Frisk alluded to a stronger focus going forward on running footwear, which he sees as Under Armour’s “biggest long-term growth category.”
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