The latest financial report shows that Under Armour's sales in the first quarter increased 7% to 1 billion 120 million dollars, slightly higher than analysts' expectations of 1 billion 110 million dollars, which is the first time that the company has fallen below two figures since 2009. More embarrassing is that in the first quarter of this season, Under Armour has been in a loss for the first time since it was launched in January 2006, and its loss amounted to 2 million 300 thousand dollars, or 1 cents per share.

The most noteworthy thing in the earnings report is that the sales of footwear in the first quarter increased by 2% compared to the same period last year, and the growth rate reached 64% in the same period last year, and the sales in the North American market decreased by 1% compared with the same period last year. At the close of Thursday local time, Under Armour's share price has dropped by about 51% in the past 12 months, and has fallen by about 25% so far this year. "Under Armour has become very worrying from a very popular stock," analysts say.

Under ArmourStock prices have fallen by more than 50% in the past 12 months

Global sales rose by nearly $7% to $1 billion 120 million, mainly due to the increase in wholesale income and direct consumer income. The results showed that the company's wholesale revenue rose 4% to $773 million in the quarter, and direct sales rose by 13% to $302 million.

From the regional perspective, the quarterly revenue of the US brand based on the domestic market is 871 million 300 thousand USD, which is lower than the 880 million 600 thousand US dollars in the same period last year, down 1% from the same period last year. The smaller share of overseas markets rose by 11% over the same period, keeping its global revenue growth.

For the weakness of the North American market, Under Armour still blamed it on the environmental recession of the local retailers. "North American revenue has dropped by 1%. The important factor is that some retailers declared bankruptcy in 2016 and blocked the distribution business. Recently, a number of main sports retailers including Sports Authority and City Sports have declared bankruptcy. Among them, Sports Authority has had more than 450 outlets to help sell the brand products, and channel damage has affected the sale of Under Armour.

From the perspective of category, Under Armour's accessories sales increased by 12% over the first quarter, thanks to strong growth in male training, running, soccer and youth business. The income of sports clothing category increased by 7%, and the clothing sales of training, golf and team sports were good.

What worries the US brand is that fewer and fewer consumers are buying their sports shoes. According to the earnings report, the income of footwear has increased by 2%, up from 64% in the same period last year. In the face of footwear sales decline, CEO Kevin Plank acknowledged that the three generation products and Curitiba boots of poor sales, the market "signature shoe sales less than expected, causing inventory imbalance." The report showed that the company's product inventory at the end of the season increased by 8% to $902 million year-on-year.
Analysts believe that the third generation of curry product technology and shape design did not break through too much innovation, and the way of life style and retro style shoes is currently the most popular shoes, these factors led to the decline in interest of consumers for curry boots. However, Kevin Plank said, "this year's plan has not changed, we will learn lessons, continue to launch the four generation of shoes in the reservoir."

The three generation of Curitiba boots

Footwear sales data are considered to be the key to future growth in the sports brand, in order to reverse the unfavorable situation, Under Armour not only focus on the boots library. CNBC, a well-known financial media, reported that the US brand is interested in launching personalized customized shoes platform, and consumers can design and order sports shoes online. This is not new. Before that, personalized customization service is the strength of Nike.

In addition, in 2015, the company had bought a building in Portland, Oregon, and planned to open second headquarters here, which is the site of Nike's headquarters. Under Armour hopes to be aided by designers and engineers from Portland in the development and design of shoe track. At the same time, CNBC says Portland's headquarters is not only based on footwear development, but its focus is on sports shoes that sell for more than $100.

It's worth noting that, from March this year, department store operator Kohl 's began selling Under Armour products over 1000 stores. "This shopping mall attracts more female consumers. We think this is a great opportunity," CEO Kevin Planck announced when the two sides cooperate. However, the outside world is also concerned that Kohl 's is currently selling its clothing products at a discount of 25%, which will weaken its brand image for a long time.

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