Under Armour is sticking to its playbook as it celebrates its 25th anniversary in 2021.
At the company’s annual shareholders meeting Thursday, held virtually, Under Armour executives pointed to women’s wear, footwear, e-commerce and international as among the opportunities for growth in the future.
Over the past few years the Baltimore-based sports brand’s once-high-flying growth had stalled. It saw founder and chief executive officer Kevin Plank turn over the top post to former Aldo and VF Corp. executive Patrik Frisk, who was elevated to that position on Jan. 1, 2020. The company was also under investigation by the U.S. Securities and Exchange Commission and agreed earlier this month to pay $9 million to settle the dispute involving allegedly pulling forward sales of over $400 million to boost revenues in 2015.
But the tide started to turn in the first quarter. In the results released on May 4, the company returned to profitability and raised its full-year outlook.
In addressing shareholders, Plank, Frisk and chief financial officer David Bergman built on this, painting a rosy picture of the future. Plank opened the meeting and presented his signature upbeat, sports-analogy-skewed wrap of the year. Although he acknowledged that Under Armour had faced “challenges” in 2020 as a result of the pandemic, he said that the brand will continue to innovate and adapt as consumers seek performance solutions for their sporting lives. One example, he said, is the UA Sportsmask, which became a popular option for people working out during the health crisis.
As reported, Under Armour has doubled down on its sports roots rather than moving outside its lane to embrace more lifestyle offerings. And while Plank admitted that “it’s still tough out there,” the goal for Under Armour is to emerge from the COVID-19 pandemic as a stronger company.
He then turned the meeting over to Frisk, who said Under Armour began experiencing increased demand in the second half of last year and that momentum has continued into 2021. Among the bright spots, he said, was e-commerce, which has experienced “incredible growth” and now accounts for nearly 50 percent of the company’s direct-to-consumer sales. In addition, the Hovr footwear range has also managed to “break through,” he said, and the Velociti Wind model that launched in March has helped elevate the range into a more-premium position.
In addition, women’s wear, including tops, bottoms and footwear, has also been a strong performer, Frisk said.
Looking ahead to this year, Frisk said Under Armour remains “focused on what we can control and sticking to our playbook,” and will seek to obtain “more-profitable formats” in retail by continuing to reduce promotional levels, eliminating 2,500 or more “undifferentiated” wholesale accounts in North America and continuing to increase awareness — and sales — internationally, particularly in China and Germany.
Frisk said he expects the popularity of sports participation will continue this year, as will consumers’ propensity for online shopping and Under Armour will seek to address those demands.
“We know there’s a lot more work to do,” Frisk said, and despite the fact that the pandemic is still presenting “a high level of uncertainty,” he remains “appropriately cautious but confident of our future.”