Baird's Jonathan Komp initially highlighted back in November a "soft initial reception" for Under Armour Inc (NYSE: UAA)'s Curry 3 launch. However, his initial thesis has not only been confirmed, but there are new worrisome signs.
In a research reported dated Tuesday, the analyst stated Under Armour's Curry 3 launch has been poor based on web scraping data from shoe retailers and other third-party data sources. In fact, SSI Data suggested Under Armour's basketball shoe sales have fallen more than 50 percent over the past 13 weeks.
The fact that Under Armour slashed the price of the Curry 3 on UA.com and other retailers from $139.99 to $99.99 is another sign of the company's ongoing woes.
Curry Partly To Blame
The analyst suggested Under Armour's troubles are in some ways attributable directly to Steph Curry himself. The NBA superstar now has to share the spotlight with Kevin Durant after the ex-Oklahoma City Thunder signed with Golden State as a free agent. Granted, the Warriors are having a great year and could win the NBA championship, but last year's theme was dominated by the team's record-setting 73-win total.
Curry's jersey is still the No. 1 ticket item on NBAstore.com, which may imply Under Armour's declining sales has more to do with a fashion shift among shoe consumers rather than Curry's marketability.
Bottom line, the analyst argued a strong playoff for Curry could "support some buzz" for the launch of the Curry 3Xero in May, but it may also take a "broader re-setting of the Curry styling" to change the negative trajectory for the shoe line.
Shares of Under Armour remain Outperform rated (with an unchanged $25 price target) given the company's lowered expectations.
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Image credit: Matthew Addie, Flickr
Latest Ratings for UAA
|Apr 2017||Wedbush||Initiates Coverage On||Neutral|
|Apr 2017||FBR Capital||Downgrades||Market Perform||Underperform|
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