(MENAFN- Baystreet.ca)
Under Armour CEO Resigns As Stock Plunges
Under Armour (UAA) Chief Executive Officer Patrik Frisk is stepping down from the struggling
athletic-wear brand after its stock has plunged 50% so far this year.
The company's Chief Operating Officer Colin Browne, who has been at Under Armour since
2016, will become the interim CEO on June 1 as the board begins its search for a permanent
replacement. Frisk will stay on at Under Armour as an adviser through August this year.
Under Armour said that its board of directors decided it was time to shift from a restructuring
posture, which Frisk oversaw since joining the company in 2017, to one focused on growth.
Frisk will receive $7.1 million U.S. in severance pay when leaving Under Armour, the company
said.
With Under Armour struggling in 2017, Frisk was hired from shoemaker Aldo Group to oversee
daily operations and execute a restructuring of the company's finances.
The pandemic initially hit Under Armour hard, like a lot of other apparel brands, but sales
bounced back last year. Then supply-chain issues weighed on results and crushed the stock,
knocking it down by 50% this year.
Those declines continued a painful stretch for Under Armour's investors. In the middle of last
decade, the company looked likely to become a global brand that would challenge industry
leader Nike (NKE). Its market value topped $22 billion U.S., but it's now worth less than a
quarter of that amount.
The company pushed into basketball sneakers and debuted a men's fashion line. It also paid
hefty sums to get top U.S. colleges to outfit their teams in Under Armour gear.
But the business quickly turned as competition heated up and a major retail partner, Sports
Authority, went bankrupt and liquidated. The company started losing money heavily in 2017.
Earlier this month, Under Armour said it expected revenue to rise 5% to 7% in the current fiscal
year, including a 3-percentage point hit from order cancellations, shipping delays, and the
pandemic outbreak in China. Its earnings per share forecast of $0.63 to $0.68 for the year fell
short of Wall Street expectations.
Under Armour's stock finished trading yesterday (May 18) at $10.53 U.S. per share, down 61%
over the past six months.
MENAFN19052022000212011056ID1104242679
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.