Sports

Under Armour Bets on Superheroes and One-Handed Zippers


Golden State Warriors’ Curry in action against the Los Angeles Clippers

Photograph by John W. McDonough/Sports Illustrated via Getty Images

Golden State Warriors’ Curry in action against the Los Angeles Clippers

The controversy surrounding Under Armour’s (UA) speedskating suits, which were blamed for impeding U.S. Olympic competitors in Sochi two months ago, did nothing to slow the company. In fact, the only mention of the flap in Thursday’s earnings report came from an analyst cracking a joke.

Under Armour’s non-Olympic performance last quarter was nothing short of admirable. Profit soared 73 percent, to $13.5 million, while sales surged 36 percent, to $642 million. But the good news wasn’t enough for Wall Street analysts, who were expecting a rosier outlook, and Under Armour shares plummeted 10 percent early this morning, its biggest drop in more than two years.

Here’s how the company hopes to turn things around:

1. Superheroes. Under Armour has invested heavily in building up a line of footwear, an effort that culminated in the February launch of its SpeedForm Apollo running shoes. While Skechers (SKX) tapped famed marathoner Meb Keflezighi to hawk its new high-performance sneakers, Under Armour turned to Hollywood. It cut deals to have its new kicks featured in the recent Captain America sequel and even built a superhero Web store around the marketing ploy. The apparel company also has some “product integration” in the works for The Flash, slated for release in 2016.

2. Stephen Curry. Beating Nike (NKE) in the market for tight-fitting T-shirts is one thing—schooling them in basketball, however, is much more difficult. In October, just before the NBA season started, Under Armour agreed to a five-year sponsorship contract with Golden State Warriors point guard Stephen Curry, who went on to have a breakout year. He may not be Jordan or LeBron, but Curry is an All-Star who probably came a lot cheaper. Under Armour Chief Executive Officer Kevin Plank called the deal a “game changer” for the brand.

3. One-handed zippers. Under Armour has apparently developed a technique to attach a magnet to the bottom of a zipper in such a way that a garment can be closed with one hand. It must feel pretty confident about the devices, which it plans to stitch into 400,000 pieces of outerwear that will ship later this year. If these things actually work, a whole team of Nike engineers will be kicking themselves.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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Companies Mentioned

  • UA
    (Under Armour Inc)
    • $69.09 USD
    • -1.85
    • -2.68%
  • SKX
    (Skechers U.S.A. Inc)
    • $56.48 USD
    • -1.86
    • -3.29%
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