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Why Barron’s is Wrong About Curry’s Success Cracking Under Armour 

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Under Armour’s endorsement costs are growing some 40% a year, one analyst says, and it’s not clear the company can keep up.

Source: Why Steph Curry’s Success Could Crack Under Armour – Barron’s

This article is going to be full of backlinks and information that discusses how I’ve been analyzing Under Armour and discussing how this current downgrading of stock is based on analyst who appear to have no understanding of how the footwear market works.

Under Armour has dropped from a must buy stock to a hold. All of this happened based on a Q3 conference call where Kevin Plank stated that they would not be showing the same profits in the next few years as the brand began to expand overseas and increase marketing to continue to grow the brand. The downgrade in stock and panic was reinforced when FootLocker’s president stated that the Curry 3 isn’t performing very well out of the gate.

In response to the initial drop I wrote this article: In this post I stated that I think the stock would drop because people are misunderstanding what’s happening as the brand moves forward. I also said that Under Armour is a buy because they have so many opportunities for growth that why wouldn’t it continue to grow? I wrote this with a source link to explain a bit more my position: I followed this article up with an analysis of UA’s marketing upon the release of the Curry 3:

Basically I’ve been writing constantly about how UA can fix their problems. If you click this link it will give you so much source material for analyzing the issues that you might be overwhelmed. To tidy it all up and explain why this analyst is wrong about the continued downgrade of UA and why the panic of shareholders is based on faulty and uninformed logic, here are my three reasons why Barron’s is wrong.

  1. I always use my online shop as a microcosm of the bigger market. FootLocker’s suggestion that the Curry 3 isn’t selling was based on Q3. The NBA season hadn’t started. UA did a very shitty job of marketing the shoes and promoting Curry and the brand. They failed to utilize Curry in the UAS launch, the marketing wasn’t very strong. I mean FootLocker was probably making the statement to call attention to the lack of storytelling Under Armour supplied the stores with. Right now FootLocker has Puma Lab, an Adidas Classics section, an Asics wall and a Fila classic wall. In their House of Hoops and Kid’s Flyzone their isn’t any real marketing narrative around the shoes. #Makethatold never took off and there hasn’t been another commercial for the shoes although there have been 4 releases with the 2.5 still sitting on the shelves. I write all of this to say that even with all of these issues, I’ve been selling UA Curry 3’s above retail on my Amazon shop. ABOVE RETAIL. Now it took a moment for this to happen because those stores with accounts listed the shoes at retail, but the point is those stores sold out which led to my listings winning the Buy Box. Here are my sales totals, this is a microcosm. From September 1st to November 28th I’ve sold 12 pair of mens’ and kids’ combined. I know this is not a large number, but I have only had the buy box for 1 week. I’m selling the Kids at 170/pair and the mens’ at 200/pair. The market is buying the shoes, but Under Armour has to do a much better job of marketing. One of the craziest things about this is that the shoes are still in stock on the UA website, but the online design of the site and lack of marketing leaves a lot of opportunity for UA to capitalize on DTC. I shouldn’t be selling the shoes at all, but I am.
  2. The NBA is finally in motion, but the MLB and NFL have dominated the sports landscape. College Football is also dominating. The NBA won’t really have the focus until late December. At this point UA can pull out all of the stops and make a strong push on the Curry 3. My excitement over the brand derives from the ability of UA to begin capitalizing on it’s NBA athletes. Will Barton may not want to wear UA, but if he had a Will Barton Player Exclusive then maybe, just maybe he and other UA athletes could help Curry 3 turn the corner. Does this undercut the other models, not really. It’s like Nike athletes wearing LeBron’s model. I mean Nike actually put Ohio State Football in LeBron Soldier cleats. I mean consider if UA took the time to create a Curry cleat for one of their NFL players! The opportunities in UA are endless and they haven’t begun to flex their muscle.
  3. If re-signing Curry or opening up their wallet to sign more endorsers cracks the Armour, then the Armour was never strong to begin with. The company has grown 20%+ annually; what doesn’t make sense is with so many markets to engage, why wouldn’t growth continue?

Barron’s is wrong. I don’t want to be long winded, but if these guys are still downgrading the stock, and you are a buyer I suggest you get to it and grab both Class A and Class C.

Note: I’m not an analyst and I have no stock in Under Armour. These are my opinions.