UA How Did This Situation Happen?

According to the world clothing and shoe net, the stock price plummeted and the chief financial officer left. Once, Stephen Currie became popular by signing "three points".

Under Armour (hereinafter referred to as UA) has been bogged down recently.

This once surpassed.

Become the only time

The US sports brand, the "second" brand, has created an industry myth of a sales increase of not less than 20% in 26 consecutive quarters.

Recently, however, it released its fourth quarter report and the 2016 annual report. At that time, the share price plummeted nearly 30%, and the market value evaporated nearly 3 billion dollars.

According to the world clothing and shoe net, the quarterly performance has become the worst performance since its IPO in 2005.

Despite UA's explanation, this slowdown is related to fierce market competition and slow growth in the North American market, but it still can not restrain market bearish sentiment.

Some analysts say that a sharp slowdown in UA growth may not be reversed in the short term as Adidas grows strongly.

Admittedly, the bankruptcy of sports retailers including Sports Authority and City Sports in the past year has been a great blow to UA, which relies on the US market. But how did this brand come into being? Some analysts say that its passenger flow is now eroding by Adidas.

In strategy, Adidas's combination of fashion is obviously more sought after by the market.

The picture is UA spokesman, Currie.

How can sports wind be fashionable?

Nowadays, sports giant ADI, Nike and Lululemon are crossing the border fashion, especially Adidas, UA's strong rival. The series of Sports Performance, clover, NEO and NMD have been returned to market share and return to the "second" market position.

UA, who built fast dry clothes for football players, has established a position in the market by virtue of science and technology and professionalism.

However, the fast pace of urban life and the increasing importance of modern people to sports health have blurred the boundaries between sports and fashion.

This also makes the UA that still emphasizes functionality has bottlenecks.

Looking back in the first three quarters of 2016, the growth rate of UA slowed down, and its income rose by 30.2%, 27.7% and 22.2% respectively.

By the year December 31, 2016, its fourth quarter sales volume was $1 billion 308 million, an increase of 11.7% over the same period of the previous year.

However, this figure is far below the $1 billion 410 million expected by Zacks, a well-known US rating agency.

In fact, UA has long been aware of its problems. In June of last year, it launched the UAS of high-end line, and invited the Tim Coppens operator design, who had been the creative director of Ralph Lauren, hoping to make a contribution to the way of life.

Many sports brands are aware of this trend and have made improvements in their products.

Lululemon, a sports brand that has entered the casual wear market, is also showing its pursuit of its brand in fashion.

AmandaCasgar, an Asia Pacific brand and community director, told the online business reporter that the brand is developing and innovating in terms of comfort and functionality, and has high pursuit of fashion.

"China's Yoga craze is on the rise. You can see that some yoga courses are hot, and people start wearing yoga clothes and Legging (bottompants) to go out for an early Chinese meal or meet with friends."

"We need to make our products more fashionable," CEO Kevin Plank was aware of and raised the direction of UA in 2017.

He said at an investor conference that consumers not only want to exercise like athletes, but also want to dress better to go to the gym.

The enemy, ADI, the war of the second

But at the same time of changing itself, UA is also facing the threat of Adidas's strong rebound.

The two brands have been fighting for a long time in the sports category "the second" position.

Adidas has gone through the past few years of plain performance, as well as the acquisition of Reebok spent huge sums of money, in 2014 was once overtaken by UA, lost the "second" position.

But Adidas's fashion strategy relies on a series of explosions to reverse its performance, launch a burst of money, and adopt the way of star sharing, hunger marketing and personalized customization in marketing, so as to maximize the market's popularity in the short term.

The rebound is ambitious for Adidas, which has raised its annual performance forecast for the four time in the past year.

Adidas NMD series is sought after

Leo Sun, an analyst at Motley Fool, a financial services analyst, points out that UA customers are losing to Adidas.

He said that in 2015, Adidas launched a 5 year plan to return, including increased investment in e-commerce and more radical local expansion strategy.

Data showed that it increased by 5% in the first 9 months of 2016.

Compared with Adidas's rising momentum, UA's recent situation is not ideal, analysts said that by the end of 2016, the UA brand's inventory increased by 17% over the past year, so discount sales promotion will be used as a means to digest inventory.

For the future, UA has chosen prudent expectations. The results show that revenue in fiscal year 2017 has increased by 11~12%, close to about $5 billion 400 million, but this is still below the $6 billion 60 million expected by analysts.

"Curie effect" weakened?

The layout of basketball shoes will be placed in the "three points" Curie of NBA's new signboard player.

In 2013, in the curry ankle injury, UA took advantage of the $550 a year contract to sign the most correct decision made by UA, the athlete in the industry.

As it wins the title of the regular season MVP and championship, the value of the company rises.

Morgan Stanley investment company expert Sol once said that in 2015, the sales volume of UA footwear sold by curi increased by 350% in the year, and its footwear business exceeded the brand endorsed by Lebron James and Kobe Bryant.

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According to UA's earnings report, clothing sales in 2016 were dominated by annual sales of $3 billion 229 million 100 thousand. However, the annual sales of footwear exceeded one billion mark, which was 1 billion 13 million 500 thousand dollars. It is worth mentioning that its growth rate is 3 times higher than that of clothing.

Among them, Curie's basketball shoes series of the same name has become the backbone of its sales.

However, media interface news analysis, with the Cavaliers last season at the end of the season, the warriors lost the title, plus Nike star Durant's join, the scene is now facing the impact of Durant, more like a "family", so the "curi effect" also weakened.

Compared with the first two models, the 3 models listed in October were pointed out by Foot Locker Inc., the world's largest sports shoe retailer, to start slowly.

In addition, Nomura has released relevant data showing that sales of the third generation of war boots are declining significantly.

At the same time, analysts pointed out that with the attention of runners, leisure and other categories of products, including basketball category NIKE ranked first, the entire basketball category products were challenged to enter the slow down cycle.

UA has a single product line on basketball shoes, but it is difficult to immunization.

Is it possible for UA to turn over the market again and give market confidence like it used to be? This may depend on its subsequent pformation in products and the performance of Curie on the field.

More interesting reports, please pay attention to the world clothing shoes and hats net.