With President and COO Patrik Frisk set to assume Kevin Plank’s CEO role in January, Frisk says Under Armour’s expectations for its footwear business are unchanged despite a 12 percent drop in Q3 revenues to $251 million.
“The work we’ve done to recalibrate the (footwear) business, reduce inefficient vole and improve segmentation across price points are enabling us to drive greater focus on prioritization into the categories where we believe we can win,” Frisk told analysts last week.
In Q3, Under Armour’s North American revenue dipped 4 percent, in line with expectations, largely due to lower sales in the off-price channel and some softness in its Direct-To-Consumer business due to “traffic and conversion challenges” in its outlet and ecommerce businesses. The company is moving to a new ecommerce platform and site in 2020 that it believes will enhance its ability to service customers.
Global wholesale revenues were down 2 percent in Q3 to $892 million . Under Armour’s current FY19 outlook calls for 2 percent sales expansion versus a prior forecast of 3-4 percent growth, partly due to lower-than-planned excess inventory to service the off-price channel.
“Ultimately, for our footwear this year, we’re expecting to grow,” says Frisk. “…And we’re very encouraged by what’s happening in our performance run and also in our women’s training footwear.”
Already utilizing four midsole technologies, including its recently launched Liquify, Under Armour will rollout additional ones in 2020.
“We believe there is an opportunity for us to add some additional cushioning technology at the very high end of the spectrum,” Frisk suggested. “So, we’re going to be focused on doing that in the very near future, but we believe that the unlock for footwear for any company is to be able to drive franchises on these platforms.”