How Under Armour Lost Its Edge
Once heralded as the next Nike, the sportswear giant has been hurt by slumping sales and unflattering revelations about its corporate culture.

By Julie Creswell and Kevin Draper
Jan. 26, 2020

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Once heralded as the next Nike, Under Armour has faltered, hurt by slumping sales and unflattering revelations about its corporate culture. It is grasping for a hold in the fiercely competitive sports apparel market even as it undergoes the biggest management shift in its history. Investors, analysts, and competitors are wondering if Under Armour can successfully redefine itself and once again win over consumers, or whether the company’s best days are behind it.

Not long ago, Under Armour was a darling of investors. But it has since faced tough scrutiny, resulting in lawsuits from shareholders, who accuse the company of misleading investors, and media coverage around real estate deals involving the company and Mr. Plank’s private holdings. Questions have also arisen about a culture that allowed strip club visits to be expensed on corporate credit cards and, more recently, a disclosure by The Wall Street Journal that federal authorities are conducting investigations into accounting practices.

It is a far cry from 2015, when Under Armour, founded in 1996 as a maker of high-tech athletic gear, had overtaken Adidas to become the second-largest sports apparel company in the United States by sales, behind only Nike. It posted 26 consecutive quarters of 20 percent or greater year-over-year revenue growth, and its stock more than doubled in two years’ time.

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Now, revenue growth has slumped, increasing less than 1 percent in the first nine months of last year. The company’s stock price has collapsed to around $21 a share from a high of $51 in 2015. Worse, the brand finds itself out of step with consumer taste.

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This month, [Kevin Plank, the sports apparel company’s founder and chief executive], 47, officially stepped down as chief executive and was replaced by Mr. Frisk, 57. Mr. Plank now holds the titles of executive chairman and brand chief, and Mr. Frisk reports directly to him.

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Julie Creswell is a New York-based reporter. She has covered banks, private equity, retail and health care. She previously worked for Fortune Magazine and also wrote about debt, monetary policy and mutual funds at Dow Jones. @julie_creswell

Kevin Draper is a sports business reporter, covering the leagues, owners, unions, stadiums and media companies behind the games. Prior to joining The Times, he was an editor at Deadspin. @kevinmdraper

A version of this article appears in print on Jan. 29, 2020, Section B, Page 1 of the New York edition with the headline: How Under Armour Lost Its Way. Order Reprints | Today’s Paper | Subscribe