CEO Kevin Plank's turnaround strategy at Under Armour is generating a revenue decline of 11%, but net income has surged by nearly 63% due to reduced promotions and focus on brand repositioning.
Neil Saunders commented on Under Armour's approach: "This playbook of sacrificing low-quality sales in exchange for a stronger brand position and higher prices is one... it can be extremely palatable to investors."
Plank emphasized the importance of relationship-building with wholesale partners, stating, "We don't have as much shelf space as we once had and it's our job to earn that, season by season."
The challenge for Under Armour lies in the balance between stepping back from promotions and successfully building its brand equity, as highlighted by Saunders' comments on the company's extensive work ahead.
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