5 Things We Learned About Under Armour During Investor Day
Under Armour’s annual investor day kicked off in Baltimore on Wednesday, with CEO Kevin Plank taking the opportunity to address the company’s past, present and future outlook, and executives from throughout the company presenting their strategies.
In a year of breakneck volatility in the stock market, UA’s share price has swelled more than 70 percent in 2018, giving it a much-needed boost following the dramatic tumble it took in the year and a half prior. Still, investors and analysts remain cautious about the company’s prospects — particularly in terms of North American sales, which have only recently returned to growth after struggling in the face of competition from heavyweights like Adidas and Nike. After UA shared its revenue outlook — estimating growth in the low-single digits from 2020 to 2023 — the stock fell nearly 8 percent as of noon EST.
Here are five lessons we’ve learned from the presentations so far:
1. Meet Under Armour’s new key customer: “the focused performer.”
Executives at the event gave a clearer picture of their target audience, a group that’s young, diverse, active, self-motivated and ready to spend. This definition arose from conversations with 22,000 customers across the U.S., U.K, Germany and China, said Patrik Frisk, UA’s president and chief operating officer, and will inform UA’s strategies for the coming years. According to the company, the market represents a $92 billion opportunity globally and a $29 billion market in the U.S. and Canada.
2. Like many of its competitors, UA is looking beyond China to expand its supply chain.
In 2013, 46 percent of the company’s sourcing came from China, a number that has since been reduced to 18 percent. By 2023, it plans to shrink China’s share to just 7 percent. Countries and regions that are picking up the slack include Vietnam (6 percent in 2013 versus 23 percent now) and The Americas (12 percent in 2013 vs. 20 percent now).
3. It’s doubling down on digital and using data to guide the way.
Executives touted the brand’s digital offerings, including the UA app, premium subscription and UA.com, which will soon be relaunched with a redesign. UA video content has racked up 130 million organic views, said Jim Mollica, SVP, consumer engagement. And in terms of its Connected Fitness platform, like the brand’s MyFitnessPal app (which was hit with a data breach earlier this year), Chief Product Officer Kevin Eskridge says the company is gathering “tons and tons of insights… and really applying those to how we build products.”
4. Product is coming to market faster to meet customer demand.
UA’s lead times have dropped from 22 months to 17 months, said Chief Supply Chain Officer Colin Browne, and the company is streamlining the number of SKUs it produces in order to focus on the best-performing styles.
5. It’s sticking to a performance-first approach, but introducing more versatile sneakers.
“We want to continue to use sports-style footwear to continue to build that emotional connection around footwear,” said Kevin Eskridge, chief product officer. While the company is best known for its athletic styles, it acknowledges that it needs to make shoes that consumers want to wear outside the gym or off the court in order to really compete. Running, in particular, has been a successful growth category for the brand, and will be an area of focus going forward. “Part of that emotional connection is going to come from the great performance that they have,” he continued, “but we can amplify that connection and therefore that continued, repeat purchase with the consumer by putting a sports-style lens on some of those performance styles and allowing for more wearing occasions from them.”
Related stories
There Are 3 Ways to Buy the 'Purple Lobster' Concepts x Nike SB Dunk
Virgil Abloh Teases Yet Another Nike Air Force 1 Collab on Instagram
Columbia Taps Athletic Industry Veteran to Lead its Footwear Business
Get more from FootwearNews.com: Follow us on Twitter, Facebook, Instagram
