Under Armour suffers another blow in heated retail contest

Under Armour suffers another blow in heated retail contest

SeattlePI.com

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NEW YORK (AP) — The contest for athletic wear customers has left once high-flying Under Armour dented and bruised as competitors pull ahead.

The company's stock recently took another hit in a years-long decline after it announced a costly restructuring and said the virus outbreak in China would hurt sales. Under Armour's market value has been cut in half since 2015 as competition heated up with companies including Lululemon and Nike and consumers demanded trendier workout attire.

Lululemon has been a key beneficiary of the shift to workout gear that can be worn straight from work to the yoga studio or gym, known as “athleisure wear.” Its stock has soared over the last several years as it notches solid sales gains in the key North American market.

Nike still remains the dominant company for athletic wear and gear and, like Lululemon, has built up sales in North America.

“Under Armour is failing to earn back shelf space at key full-price customers as quickly as hoped. We think this is partially due to strength at key competitors and partially due to Under Armour’s own missteps,” wrote Keybanc Capital Markets analyst Edward Yruma, in a note earlier this month.

Under Armour surprised investors by saying it expects to incur between $325 million and $425 million in restructuring costs in 2020. That’s on top of a sales hit of up to $60 million from the virus that has been spreading in China and globally.

Patrik Frist, in his first earnings conference call as CEO, said the company's supply chains could suffer because of factory closures in China. The impact could linger through the year.

“Looking at the greater marketplace and how consumption, consumer behavior and overall economic shifts could potentially play out, is where it gets even more unclear," he...

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