Under Armour (NYSE:UA) was once a major name in the activewear space, but its fortunes have recently declined. Significantly. And things aren’t looking much better now. In fact, Under Armour shares are down modestly in Thursday afternoon’s trading as plans for layoffs and more are coming in the face of sales that are set to decline even more than they already were.
Sales for North America—Under Armour’s biggest market—were down a scathing 10%, and the future wasn’t looking any brighter. In fact, Under Armour projected that losses would not only continue but were likely to get worse through the fiscal year. Profits were down over 96% in the fiscal fourth quarter when compared to a year prior, and that is about as close to corporate death as you can get without actually hanging a big “closed” sign on the building.
That, in turn, prompted plans for layoffs, a program which will cost between $70 million and $80 million in severance costs and benefits costs.
Just a Temporary Setback
CEO and founder Kevin Plank believes this is just a temporary setback. Plank threw former CEO Stephanie Linnartz under the bus like it was an Olympic sport, detailing how she turned Under Armour’s focus to women’s apparel and fundamentally changed the brand, which effectively crippled it. Plank declared that Under Armour would pivot once more to focus on men’s apparel, making it a top priority, and planned to pare down the company’s overall line of offerings. Plank noted the company had “…too many products, too many initiatives, too much of too much.”
Is Under Armour Stock a Good Buy?
Turning to Wall Street, no analysts have a position on UA stock right now, so we turn to the last five days of trading. Under Armour fought back from a serious drop earlier in today’s trading but lost some of that momentum thereafter. As a result, UA stock is down just 1.57% during this timeframe.
