Who’s Protecting Under Armour’s House?

Dear Rundown Reader,

Seven Figure Publishing’s home offices are a few miles from Under Armour’s headquarters here in Baltimore.

Many of our editors and employees have friends or family that work for the company.

Inherently, the company’s health is a topic that stays close to our thoughts.

As it stands, company leadership doesn’t appear to have a solid plan to fix their slumping domestic sales problem.

Numerous media outlets have noted Under Armour’s next quarter’s forecast looks bleak.

But we here at The Rundown have a suggestion for Kevin Plank and Co.

Do what Ford did.

Here’s what we mean by that.

Your Rundown for Thursday, May 3, 2018…

Under Armour Should Do What Ford Did

Under Armour (NYSE: UA) reported earnings this Tuesday.

Expectations were low ahead of UA’s report.

We’ve covered UA’s problems before.The company has significant domestic sales and inventory issues.

Numbers from their report however were decent.

UA reported break-even results for earnings per share, beating the consensus estimate of $0.05, as reported by The Wall Street Journal.

Revenue also topped estimates of $1.2 billion, coming in at $1.19 billion.

The company’s overseas sales and current restructuring plans were noted as key reasons for the beat.

But lingering issues with domestic sales and stagnant inventories are keeping shareholders skeptical.

Despite growing international sales, UA still trails rivals Nike and Adidas significantly here in the States.

According to Market Watch, Nike rakes in $21 billion in sales domestically. Adidas pulls in about $12 billion and UA takes in $1 billion comparatively.

It’s numbers like this that caused UA shares to fall over 6% after the beat.

Since Tuesday shares have recovered, now sitting at $16.36 pre-market this morning.

But the up and down action over the past few months says it all. Confidence in UA is weak.

UA

As such, we have a suggestion for UA.

Look to Ford Motor Co. for answers on how to fix their domestic sales problems.

Why?

Because Ford faced the same problems as UA.

Ford’s struggling car sales equates to UA’s inability to sell its own products, especially shoes.

When it comes to shoes, Nike and Adidas reign supreme. No amount of big name sponsors will change that.

UA needs to accept who they are and act accordingly.

There’s plenty of space for Nike, Adidas, and UA to co-exist. If they all stick to what they do best.

That means shoes for Nike, a little of both for Adidas, and performance wear for UA.

Ford was honest about their situation. They were self aware. They didn’t play games.

Cars weren’t selling so they decided to stop making them.

And UA needs to do the same.

It’s time for UA to get out of shoes and back to the core products that made them so successful.

Now, turning to the markets this morning…

Market Rundown for Thurs., May 3

S&P 500 futures are up 1.75 at 2,629.

Oil’s flat at $67.87.

Gold rises $7.70 to $1,313.

Bitcoin goes for $9,190 this morning, according CoinDesk.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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