Stock analyst with sell rating on Under Armour says he was shut out of investor meeting

An analyst who has criticized Under Armour’s turnaround plan said he was shut out of the brand’s annual investors meeting Wednesday at its Baltimore offices.

Sam Poser, an analyst with Susquehanna Financial Group, said he watched a webcast of the meeting from his New York office.


Under Armour hosted an invited group of analysts and investors at its Port Covington campus and broadcast the day-long meeting via the webcast, making it accessible to the news media and others. The webcast did not include an afternoon session where guests could examine new products and designs.

“We did not have the opportunity to spend [about] 90 minutes seeing the new product and product initiatives following lunch at Under Armour’s headquarters in Baltimore, because we were not invited to the Investor Day,” Poser said in a report he put out late Thursday. “Management said to us, and we believe a handful of other sell-side analysts, that they did not want any disruptive influence at the Investor Day.”


Under Armour did not respond to a request for comment Friday.

Poser has criticized decisions to expand the distribution of Under Armour footwear and apparel in a way he says has hurt the brand’s value. He has raised concerns about excess inventory and a lack of compelling new product offerings. He questioned Under Armour’s strategy of expanding to moderate retailers, after big customers such as The Sports Authority and Sport Chalet, filed for bankruptcy, saying the moves hurt the brand appeal and led to losses at retailers Dick’s Sporting Goods and Hibbett Sports.

In his latest report, Poser said the five-year plan Under Armour presented Wednesday is too aggressive and places too much attention on performance versus fashion.

“Remaining focused on performance and counting on sustainable double-digit footwear growth will likely prove to be folly,” he said in the report. “If a brand does not have a roster of footwear that one can build an outfit around, to wear to brunch for example, then it's not in the game, and Under Armour management continues to show that it believes that fashion and function are mutually exclusive.”

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During the investor event, Under Armour CEO Kevin Plank and other executives sought to assure analysts that the turnaround plan for the 23-year-old brand is working. The changes, they said, have positioned a leaner, more efficient company for growth both in the United States and internationally, in places such as China, India, Mexico and Argentina, in sports such as running and training and among female consumers.

Patrik Frisk, Under Armour’s president and chief operating officer, and other executives repeatedly said the brand intends to stay focused on footwear and apparel that helps athletic performance, rather than betting more heavily on trends such as “athleisure.” That strategy, going for a blend of style, performance and fit, has been viewed as a weakness but will prove a strength in the long run, executives said.

Poser said the brand has improved its supply chain and shortened the time it takes for launch new products and bring them to consumers. But his firm is not convinced the brand can re-establish its place as an aspirational brand in North America, where it garners three quarters of its sales, or retain its popularity internationally.

“The [Under Armour] management team is very competitive and wants to win,” Poser said. “Given their desire to win, we wonder why the unnecessarily aggressive five-year plan,” including a 40 percent growth rate for earnings per share and a 10 percent to 12 percent growth rate in footwear sales.


Under Armour is restructuring at a time when Nike has improved its apparel and footwear offerings, Adidas remains strong, New Balance is gaining momentum and Fila and Champion are gaining shelf space, he said.

Having a chance to visit the company’s headquarters could have offered more insight, he said.

“Given our nearly 20 years of retail experience, which included two years at Champs Sports and three years at The Sports Authority, we believe that our trained eye on the new apparel and footwear offering would provide useful insight to the investment community,” Poser said. “We want all the companies that we cover to perform well, and make the call when we see one going down the wrong path.”