The Armoury What's new with Baltimore sports apparel maker Under Armour

Analyst warns Under Armour won't make up for lost sales with Kohl's, DSW launches

Under Armour has been selling apparel and footwear at Kohl's since mid-March. And the Baltimore brand is poised to offer its athletic shoes through Designer Shoe Warehouse and Famous Footwear. 

But reaching customers that way won't offset business the brand has lost because of retail chain bankruptcies and declining sales at key retailers such as Dicks Sporting Goods, one analyst warned in a report today.

Sam Poser, an analyst at SIG Susquehanna Financial Group, placed a sell recommendation on the company's stock.

The Under Armour launch exceeded Kohl's expectations, Kohl's has said. Still, Poser said Wednesday, Under Armour's U.S. sales growth through its retail partners "is likely to remain challenged." 

Sales through new retail channels and back-to-school footwear offerings won't make up for a pile-up of store closings, the analyst said. The Sports Authority and Sports Chalet shut down last spring, and this year MC Sports and Gander Mountain are going out of business.

Meanwhile, Poser said Dicks has cut back on orders. He said the chain is "perturbed by [Under Armour's] decision to open up distribution to the moderate retail channel without an appropriate segmentation strategy"  -- a strategy to help customers differentiate between Under Armour products sold at the sporting goods store versus the discount department store chain. 

Poser estimates that sales through Kohl's, DSW and Famous Footwear will add $104 million in revenue this year. Lost revenue from bankruptcies and liquidations are expected to come to $140 million.

Last month, Under Armour announced its first quarterly loss since it became a public company in 2005.

Under Armour founder and CEO Kevin Plank told analysts that the brand is taking steps to address the abrupt slowdown, by focusing on better management and improving product offerings, including more fashionable, yet functional, clothing that can be worn outside the gym or off the field.

lorraine.mirabella@baltsun.com

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