After a Modest Q1, Under Armour’s Search for Its New CEO Continues

·2 min read

Under Armour Inc. is looking to the future, said executive chairman and brand chief Kevin Plank on a call today with investors — that includes engaging in an active search for a new chief executive and preparing to unveil a significant new footwear platform.

The Baltimore, Md.-based athletic company released its fiscal first-quarter earnings on Wednesday, reporting revenue of $1.3 billion, which was flat against last year’s results and matched expectations. On a currency neutral basis, revenue was up 2%.

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Net income totaled $8 million, or $0.02 of diluted earnings per share, in the quarter. Adjusted net income was $15 million, or $0.03.

Chief financial officer David Bergman noted that the company’s results included a “10-point headwind related to proactive order cancellations due to supply contraints.” Under Armour also was negatively impacted by the most recent COVID-19 lockdowns in China, causing its revenues in the Asia Pacific region to be down 8%.

Its North American business, meanwhile, was flat in Q1 (or up 1% on a currency-neutral basis), and sales in the EMEA region were down 1% in the period (or up 6% currency neutral).

After a series of sluggish quarters and the unexpected departure of former president and CEO Patrik Frisk in May, Plank acknowledged on the call that Under Armour is in a transitional phase, but he emphasized it is not seeking to re-create past successes. “We have no delusions of ‘getting back’ to any previous chapter in our past. We are both looking and moving forward,” he said.

To that end, he said the board is conducting a formal search for its new CEO, led by industry veteran Karen Katz. “The pool we have to choose from is thorough and robust, including [interim CEO] Colin [Browne]. And we’ll make a terrific choice for the next CEO of Under Armour before year’s end,” said Plank.

He added that the board’s marching orders for the next chief executive are to “take care of the brand, optimize the assets we already have — as there are so many, from partnerships to athlete relationships — be opportunistic when it makes sense, drive love for the UA brand, and the rest will follow.”

In the meantime, though, Plank said the company is not standing still. This fall, Under Armour is set to launch a new performance shoe technology that will bolster its already-$1.5 billion footwear business. The franchise will launch with a training shoe before expanding into other categories where Under Armour competes.

Plank said the technology was discovered through an insight from an athlete and has the potential to “change the athletic footwear landscape.”

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