Under Armour's dominance 'has come to an end' by Ashley Lutz on Jan 31, 2017, 9:59 AM Advertisement
 Under Armour's status as the golden child of athletic retail might be ending. The company's shares are crashing up to 20% after earnings showed global weakness — especially in North America. Profits also eroded, a sign that more shoppers are unwilling to pay full price for Under Armour. Revenues in North America were $1.3 billion — less than Wall Street's estimate of $1.4 billion. And the slowdown is expected to continue. "Under Armour’s long run of stellar performance has come to an end this quarter," Hakon Helgesen, retail analyst at research firm GlobalData, wrote in a note to clients, adding that "performance has deteriorated at a rate far in excess of a natural slowdown." Helgesen writes that competition from athletic brands like Nike, Adidas, and Lululemon hurt Under Armour's performance. Since it became acceptable to wear gym clothes essentially everywhere, Under Armour's competitors have ramped up innovation. Lululemon has been aggressively designing new styles of clothing which it seems some customers prefer to Under Armour's sporty aesthetic and loud logos. 
And Nike's investment in high-end footwear has challenged the success of Under Armour's Curry 3 shoe. Helgesen writes that it's possible Under Armour has saturated the North American market and needs to turn to global customers for growth. "With investments in global e-commerce and in the development of physical stores in key international locations, we believe that this engine will continue to spin rapidly over the next fiscal year," Helgesen writes. "However, the return on these investments will be somewhat lower than those made in Under Armour’s home market. This ultimately means that unless North American growth gets back on track, earnings will remain underpressure across the year ahead." SEE ALSO: An anti-Trump movement is calling for the boycott of these retailers Follow Us: On Facebook
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