Wall Street’s Discontent with Kevin Plank’s Return: Exploring Market Sentiment and Impact

Wall Street’s

Wall Street’s is not pleased that Under Armour founder Kevin Plank is returning as its CEO.
Shares of the athletic apparel company plunged about 12% on Thursday after the retailer announced late Wednesday that CEO Stephanie Linnartz would be stepping down after barely a year on the job and Plank would replace her on April 1.
After Under Armour announced that news, both Williams Trading and Evercore ISI downgraded the company and lowered their price targets for the company. Williams Trading now rates it a hold from buy and lowered its price target from $11 to $8. Evercore downgraded the company to underperform from in line, lowering the price target from $8 to $7.
Wall Street’s :Linnartz, a former Marriott International executive who took the helm in February, is the second CEO to cycle through the company in less than two years.
In Jan. 2020, Patrik Frisk, the former head of Aldo Group, replaced Plank as the company’s chief executive officer, only to announce his resignation in May 2022, more than two years later.
In December, Under Armour announced plans to hire Linnartz, betting that her experience building out Marriott’s renowned Bonvoy loyalty program and driving digital revenue for the hotel giant would offset her lack of experience in the retail category—but at the time of her death, she had been hard at work on overhauling the apparel company’s C-suite, building out its loyalty program, UA Rewards, and shifting the brand’s assortment to a more athleisure-oriented offering that included more stylish options for women.
About it reduction, Evercore ISI reported that return of Planck to the company “is a clear signal”, that is strategy does not work, the main indicators of the company became worse. “The likely scenario we think Mr Plank will pursue will include: efforts to accelerate a return to N. America revenue growth. In our view, that adds significant risk to the long-term brand” — wrote the analyst Michael Binetti.
Under Armour ‘s sales decelerated over the holiday quarter as the sports clothing retailer struggled with tender demand in North America and sour wholesale orders . But those dynamics have weighed on rivals, too, and serve as a microcosm of the broader forces pressuring the retailing business. Higher inflation, interest rates, and dwindling savings accounts meant that North American consumers were more selective than usual with their discretionary dollars, and as buying clothes or shoes fell out of fashion and as eating out and travelling were rekindled again.
Wall Street’s :In contrast, wholesalers have choked back on orders of late following an inventory glut that more than one merchant described as their worst ever. Wholesalers accumulated large inventories during the early months of the pandemic when the supply chain was severely disrupted. Since then, inventory levels in the industry have returned to normal, but wholesalers have continued to order cautiously to maintain these levels as they face pressure from the current uncertain demand picture.
According to the analysts at William Blair, there is a moderate possibility that Plank would concentrate on revenue growth at Under Armour, thus undermining the firm’s thesis that fiscal 2025 would be a year of cost efficiencies. The weekly research note said:
“Moreover, with about two-thirds of leadership new to Under Armour in the past year, the departure of Linnartz poses some risk that Under Armour could undergo more changes in key roles, which could push out our hope for rebounding domestic revenue growth in fiscal 2026 given inherent product lead times if key leadership changes. That said, Plank has been heavily involved over the past year as brand chief and executive chair, which bolsters our optimism somewhat that key hires will remain in place.
Quoting retail analyst and managing director of Global Data, Neil Saunders, “Linnartz’s departure is emblematic of a brand that can’t quite decide which direction it wants to go in and where it wants to stand in the market”. “Before, the company had already witnessed several rounds of changes in an attempt to restore its declining sales and to resolve issues with the brand. However, as the latest results of one more set of poor quarterly earnings show, the company has not yet managed to find a successful route to reinstate the business”, Saunders shares in the emailed note .
Wall Street’s : And all of the twists and turns have created a brand that has become increasingly confusing to consumers and to wholesale partners. This in turn, has made Under Armour easier to overlook. These problems are not easy to fix, no matter who sits in the CEO peplos.