Fourth Quarter UA Grew Year By Year, But Was Lower Than Expected.

"We absolutely have no excuse today."

Sports brand

The CEO Kevin Planck (Under Armour, short for UA) told analysts at the end of January in the United States.

Usually such tone does not mean good things.

UA announced its fourth quarter earnings in January 31st.

In the fourth quarter of 2016, UA grew by 11.7% compared to the same period last year, with sales of $1 billion 308 million 100 thousand, but it was lower than the US $1 billion 410 million expected by Zacks.

In the fourth quarter of 2016, UA

Sales grew by 36% compared with the same period last year, and revenue was 228 million dollars; clothing sales increased by 7% compared with the same period last year, and revenue was 929 million dollars; accessories sales increased 7%, earning 104 million US dollars.

In the first three quarters of 2016, UA's income rose by 30.2%, 27.7% and 22.2% respectively.

The fourth quarter's earnings report directly broke the record that UA's sales revenue increased by more than 20% in the 26 quarter.

In addition, the Group expects revenue growth in the 2017 fiscal year to grow from 11% to 12% to around $5 billion 400 million, which is also lower than analysts' expected $6 billion 60 million.

Another surprising news is a change in personnel: the group announces that chief financial officer Chip Molloy will leave because of "personal reasons".

Chip Molloy came to UA in early 2016 and worked for only one year in the group.

In February 3, 2017, David Bergman, senior vice president of the UA group, will temporarily replace CFO.

This series of bad news has also led to rapid and huge market reaction.

At the end of January 2017, UA's share price went through its biggest slump in 9 years.

As of February 3rd, Under Armour was priced at $18.12.

In 2016, UA's share price had fallen by 30%.

The growth of UA has long been considered "myth".

According to the world clothing and shoe net, UA sales will increase 1 times every 3 years after listing in 2005.

But after the fourth quarter 2016 earnings came out, people began to worry about whether UA's high growth myths would be shattered.

Wall Street has always thought that UA's share price is too high.

In the next 12 months, UA's price earnings ratio will reach 40 times, which is higher than its similar brands.

According to the world clothing and shoe net, UA's CEO Kevin Planck analyzed why the UA market was weak: in recent years, the bankruptcy of sporting goods retailers in the United States affected the sales revenue of UA.

In 2016, the bankruptcy of many sports retailers including Sports Authority, City Sports, and so on, had a great impact on the 85% revenue from UA in the US market.

UA is more sensitive to changes in the local market than Nike and Adidas, which are deeply global brands.

According to the world clothing and shoe net, Hakon Helgesen, a retail analyst at research firm GlobalData, said: "UA's long-standing stunning market performance ended this quarter," and said that "the deterioration of its performance is far faster than the normal decline of the brand."

Helgensen thinks it's from Nike.

Competition with lululemon has hurt UA's market competitiveness.

Sportswear is now in a state of rapid growth in all kinds of clothing industry around the world, and other products that combine style and sport are also popular.

Since the beginning of the sports and leisure season, UA's rivals have tried their best to capture the mountain top.

Lululemon's clothing has been taking into account the integration of fashion and functionality. Adidas has also focused on the cross border fashion trend in Sports Performance, clover and NEO series, and launched a number of sports shoes products in 2016.

UA is also aware of the need to enhance its fashion. After all, UA products are often evaluated by consumers as too specialized.

"We need to make our products more fashionable," CEO Planck put forward the direction of UA in 2017.

In general, UA is a professional sports brand.

Planck founded the company in 1996, the first to produce fast dry t-shirts for rugby players.

In the 20 years of development, UA has become a brand with an annual income of 4 billion 800 million dollars, and its products have been sold to more than 60 countries all over the world.

However, most of UA's products still focus on the functionality of products. Even the dummy models placed in shops are a tall and handsome image, hoping to attract consumers of the same shape and aesthetic pursuit.

In 2016, UA once designed a sneaker Curry 3 for spokesperson NBA star Stephen Currie. However, the evaluation of the harvest was mixed, and it was difficult to cross the boundary to attract consumers outside the sports circle.

UA is also exploring.

In June 2016, UA hired fashion designer Tim Coppens to act as creative director for the company's new series called UAS.

During the autumn of New York fashion week, the UAS series is officially released. The new products are integrated with more fashion elements while adhering to the consistent technology style.

However, the gains gained from UA's attempts in fashion are still not worth mentioning compared with the impact of their core products.

After the release of the earnings report, Planck said that the company was fully aware of what to focus on in the coming year.

In 2016, UA's sports shoes revenue increased by 50%, and its first revenue exceeded 1 billion dollars.

In the Chinese and European markets, UA also showed strong growth momentum.

Footwear and the international market will be the focus of UA's next investment.

In addition, with the dramatic changes in the retail structure, UA will learn more from Nike, the industry leader, and develop more in the direct business channel, especially in the field of e-commerce.

But at the moment, the most important thing to do in UA is to dress up as soon as possible.

"We need to become more fashionable," Planck said. "Because consumers want everything."

More interesting reports, please pay attention to the world clothing shoes and hats net.