Will people pay more for Under Armour?
Article excerpt
Flouting signs of soft demand, CEO Kevin Plank on Friday said that “consumers are going to choose Under Armour at a premium.” Under Armour’s turnaround will require not just halving the size of its assortment, but also improving product and storytelling, CEO Kevin Plank said during a conference call Friday. He pointed to the recently released Bouncy Tee, a cotton-blend performance T-shirt that is commanding full price and exceeding sales expectations, and a few longtime best-sellers as proof “that we know how to create products with a clear reason to command value.” Other items, including the brand’s Tech T-shirt, are discounted too often. Plus, customers have made a habit of turning to its DTC channel for promotions, and the company is testing more full-price offers there, he said. Plank promised that, following merchandise and marketing changes, “consumers are going to choose Under Armour at a premium.” “We will sell so much more of so many less products at a much higher full retail price, and this mission is well underway,” he said, adding, “What we know is that when the product is differentiated and the value proposition is clear, the sell-through follows.” To make all this plain to the customer, Plank emphasized the need for more effective storytelling, but said the company has rethought its marketing expenditure for the year. Recently, Under Armour said marketing would...
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The company said Q1 gross margin expanded by 590 basis points to 54.1%, “primarily due to refunds” from tariffs, and that net income reached $1 million.
