Under Armor founder Kevin Plank on what the brand’s next CEO should do

Under Armor founder Kevin Plank appeared on the retailer’s earnings call this week to highlight the company’s strategy and announce the search for a new CEO. Company waiting for the name of the new leader by the end of the year, Planck said in a transcript of Seeking Alpha.

After Patrick Frisco came out of first place in June, chief operating officer Colin Brown took over on an interim basis and is now in the running for a permanent position. While Brown is being considered for the role, Under Armor management also has an “excellent lineup of proven leaders” lined up in position– said Plank.

Analysts at JP Morgan said in May that Brown is largely responsible for following the Frisk strategy, so whether he’ll be a good fit for the new position may depend on what the brand is looking for next. Some observers suggested that Planck was looking for a leader who would facilitate more growth than Frisk.

For now, though, Plank praised Brown for “a great job” and noted that the company’s next CEO will need more than just the basics, but also the ability to inspire the brand.

“We believe this will lead to more robust revenue growth and improved profitability over the long term,” Plank said. “Take care of the brand, optimize the assets we already have… drive love for [Under Armour] brand and the rest will follow. This is a message for our next CEO.”

Frisco’s time at Under Armor has been marked by significant operational improvements, and Brown, for his part, said the company is “not going to back down” from the changes made under Frisco. He also hinted that expanding the brand’s reach could be in the cards. “When we talk to consumers, consumers want more from Under Armor than just wearing it during the sweaty part of the day,” Brown said.

While it sounds like an attempt to enter the athletics space occupied by Lululemon and other competitors, Under Armor has struggling to place correctly in the past and largely ignored the athleisure trend. Plank expressed interest in returning to Under Armour’s former status, but said the company is also focused on growing beyond its beginnings.

“Obviously, we’re focusing on rebuilding the parts of our business and strategy that made us successful, but we’re not trying to recreate the success we’ve had in the past,” Plank said. “We are a better business today with a stronger balance sheet, smarter management and have been audited. We have no delusions of “returning” to any previous chapter of our journey. We’re both looking and moving forward.”

However, Under Armour’s first-quarter sales didn’t budge much revenues for the year remained at the same level. Operating and net income fell significantly – by 71.5% and 87%, respectively. I like it many others in the industrythe brand lowered its forecast for the year.

“Overall, a big cut to [fiscal year 2023 earnings per share] the outlook is disappointing, but not surprising given similar actions by other consumer companies and retailers, given the deteriorating economic environment, leading to higher inventory-moving stocks,” analysts at Telsey Advisory Group said in an emailed comment.

The company is dealing with a challenging operating environment, including a “product glut” about to hit the market, thanks to supply chain delays and high levels of uncertainty due to inflation. According to CFO Dave Bergman, inventory should be in a better position in the second half of the year, leading to “consistent revenue growth” throughout the year.

https://www.retaildive.com/news/under-armour-founder-kevin-plank-what-new-ceo-should-do/628944/ Under Armor founder Kevin Plank on what the brand’s next CEO should do

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