Under Armour did not have the best Tuesday. The company’s shares plummeted more than 25 percent after the company reported its holiday sales and sales target for 2017, according to Fortune.
Under Armour’s disappointing earnings are leaving many wondering what happened? Could it be that athleisure is no longer in demand? Seemingly, it’s actually the opposite. Under Armour CEO Kevin Plank pointed to a few reasons for the company’s poor performance. For one, the athletic apparel market has become over-saturated by rivals, like Nike and Adidas. In addition, brick-and-mortar bankruptcies, like Sports Authority and City Sports, have cut into Under Armour’s wholesale business model.
Also, Under Armour has made some costly investments, including its 10-year uniform partnership with Major League Baseball and its connected fitness apparel. And while a lot of these investments have not paid out the way Under Armour hoped, some categories are still strong. Connected footwear, digital apps and trendy athleisure clothing have proven themselves valuable to Under Armour’s portfolio.
For those of you in the athletic apparel and athleisure industry, fear not. The market might be crowded, but it’s still a strong performer.
