Could Under Armour Be On the Upswing? Its Skyrocketing Stock Suggests So
We've been following Under Armour's fall from grace for some time now. The company's failure to innovate, the decline of its third party retailers and its own inventory issues contributed to its sales slump, but a recent development might be a sign Under Armour is getting back on track.
According to Market Realist, Under Armour went from the worst-performing S&P 500 apparel stock in 2017 to the best-performing S&P 500 apparel stock in 2018 so far. The company's stock as seen a 61 percent increase as of June 18.
Market Realist credited a few factors with Under Armour's epic comeback. First, Under Armour has made some major management changes in order to reduce lead time between product development and sale. The company has also taken steps to decrease product variety based on customer preferences, and make the right decisions on product locations.
The perfect example of Under Armour's new and improved product development can be seen in the launch of the Curry 5 series. Fans majorly approve of the product design, but the company also did a great job of putting its marketing efforts behind the launch. Under Armour's Project Rock 1 also saw massive success, including a 30-minute sell out.
— Under Armour (@UnderArmour) June 10, 2018
Under Armour had to deal with its inventory backlog issues. According to Market Realist, the company managed to grow its inventories 27 percent year over year, so now it can get wholesalers its products on time.
According to Business Insider, the company can thank President Patrik Frisk for the disciplined approach to the inventory backlog.
"Frisk has instituted a product calendar that mandates collaboration and assigns accountability across functions like design, marketing and sales, with an end result being fewer bottlenecks in the supply chain and shorter lead times," Randal Konik, Jeffries analyst, told Business Insider.
Is it possible that Under Armour is staging one of the greatest comebacks in athletic apparel history? If the company continues its upswing, Nike and Adidas may have to watch their backs.