UA'S Deteriorating Financial Situation Will Force Companies To Raise Funds.

According to the world clothing shoes and hats net, last Tuesday, the United States

brand

The share price plunged 8.7% to 12.39 dollars, because some analysts worried that the company's cash flow or dried up.

This week, Under Armour shares rebounded slightly.

As of Friday's close, Under Armour's share price was $12.85, and has fallen by 5.55% since 2018.

By the end of 2017, the stock price of the two class stock of Under Armour has dropped by more than 45%, while the standard & Poor's 500 index (S&P 500) rose 22% during the same period.

The past 2017 was particularly difficult for Under Armour.

In addition to personnel changes and layoffs, the company's 26 quarter sales growth of over 20% miracles stopped, and has suffered losses for the two consecutive quarter.

In the 2017 quarter of fiscal year third, Under Armour sales fell 5% to $1 billion 400 million, and sales declined for the first time since listing in 2005. Net profit fell to 54 million 200 thousand US dollars and diluted 12 cents per share (128 million 200 thousand and 29 cents respectively last year).

The company had to cut its sales forecast for 2017, down from its expected 9-11% growth to low single digit growth.

Analysts fear that if sales continue to fall, Under Armour will soon be in trouble.

Macquarie Capital analyst Laurent Vasilescu believes that the deteriorating financial situation will soon force the company to raise funds.

Wall Street expects Under Armour sales to grow by 4.6% over the same period in 2018, but Laurent Vasilescu expects sales will fall by 1% this year, because the company's sales growth is mainly due to the new wholesale and retail partners rather than the original partners.

Vasilescu downgraded Under Armour's stock rating to "reduction".

Expand overseas market

and

Unlike Adidas and other competitors, Under Armour has not expanded overseas market in recent years.

So for Under Armour, opening up new markets such as China and India is more important than ever.

North America is the largest market for Under Armour, accounting for 77% of the total market share, but in the past four quarters, sales in the North American market were sluggish, compared with 12% in the third quarter.

Under Armour's biggest competitor, Nike, was also unsatisfactory in North America. Sales in the region fell by 5% in the latest quarter.

However, the situation of rival Adidas is different.

In the latest quarter, Adidas sales in North America increased by 31% over the same period last year.

Improving consumer awareness

Improving consumer awareness will be the top priority of this year's Under Armour.

Under Armour acknowledged that one of their problems is that under the aggressive expansion strategy, there is no truly convincing shoe.

In 2017, the products of Under Armour began to be sold at retailers such as Kohl s and so on. Although the company said its cooperation with the new wholesale partners brought sales growth, it still attracted a lot of negative voices.

Kohl "s" is known as the "famous warehouse". It is famous for its continuous sales promotion and large discount, which will definitely impact the profits of Under Armour.

By contrast, Nike announced a revival plan at the end of last year, which will withdraw from thirty thousand retailers and focus on working with better retailers to provide better quality customer services.

At the CES 2018 (International Consumer Electronics Products Exhibition) earlier this month, Under Armour released a new midsole technology HOVR and two running shoes equipped with this technology.

This is the third generation of intelligent running shoes released by Under Armour in the past year, which shows that "performance innovation" is still the main driving force for Under Armour to drive growth.

In addition, Under Armour announced in October last year that it will enter the monthly subscription service market and launch a custom box called ArmourBox (see related reports: Under Armour enters the monthly subscription service market and introduces the ArmourBox custom box).

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