On Wednesday, May 4th, 2016 the Under Armour stock is under heavy pressure. Just two days ago we asked the question will Steph Curry’s injury hurt Under Armour? It looks like injuries have nothing to do with this stock. Rather, the departure of Chief Marketing Officer Henry Stafford and Chief Digital Officer Robin Thurston seem to be weighing on investor’s minds.
Another interesting theory is the excess inventory in Sports Authority stores is causing major problems with this retailer. That’s funny, because Nike has just as much apparel in Sports Authority stores yet their stock is performing quite well today. It doesn’t make sense that Sports Authority stores closing would hurt Under Armour but would not affect Nike.
Overall, this is an over reaction and a stock that has been down five consecutive days is taking a beating on day number six. The Google Trends for “Under Armour” is very strong. In fact, in the month of April 2016 searches for this company’s products were up over 22% when compared to April of 2015.
Maybe the departure of the Chief Marketing Officer and Chief Digital Officer will hurt the company but one would expect there are able bodies ready, willing and able to replace the execs. We have also learned that both executives left for personal reasons and it had nothing to do with the overall management or direction of the company.
Remember that high flying stocks are going to pull back. If you believe when more people search, they buy Under Armour is still a very good stock. You will have the opportunity to purchase it at a discount with the stock price now under $40 a share. That said, some investors do not want to catch a falling knife. Do not put all your money in one stock as anything can happen to change a product or company.
In other news, Under Armour signed Washington Nationals’ Bryce Harper to a 10 year deal. The compensation was not disclosed. This means Under Armour now has Tom Brady, Steph Curry, Jordan Spieth and Bryce Harper. The “Harper One” baseball cleats will be available on July 15th, 2016. Note that sales will be very low after the release because the high school and middle school baseball season runs from February to May.