Under Armor stock fell by 12 percent on Thursday after a Wednesday announcement. Late Wednesday, the apparel and footwear maker said founder Kevin Plank would return as CEO from April 1. Current CEO Stephanie Linnartz would step down effective April 1 but would remain as an advisor in the company till the end of April. Dr. Mohamed A. El-Erian will be the board’s non-executive Chairman.
Wall Street reacted sharply to the change in leadership as the company’s shares plunged by 12 percent. Some analysts believe that Under Armor is facing its problems, while others attribute them to the general pressure that retail has faced in recent years.
The carousel of leadership at Under Armor does not strengthen its market value, as Stephanie Linnartz is the second CEO to step down since founder Kevin Plank’s resignation in January 2020.
Former Aldo Group CEO Patrik Frisk became CEO in January 2020 but suddenly announced his plan to resign in May 2022. Stephanie Linnartz, an executive at Marriott International, became CEO in February 2023 but will leave in less than two years.
Under Armor saw a slowdown in sales during the holiday quarter. There was sluggish demand in North America. Consumers have been spending cautiously on discretionary purchases and prefer to spend their dollars on travel, dining out, and other activities.
Wholesalers have pared down their inventory after being left with huge stockpiles, which has also been a factor in the general slowdown in retail and Under Armor.
Baltimore-based clothing and footwear firm Under Armor has worked to decrease its excessive inventory in the past few quarters. However, it has been posting declining revenues without a rebound.
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