Under Armour shares dropped 5 percent Tuesday afternoon after Dick’s Sporting Goods, a major partner for the company, announced disappointing second quarter results amid rumors of a sports apparel price war.
According to a Barron’s report, Dick’s Sporting Goods CEO Edward Stack said competitors, “seem to be in panic mode with how they’re pricing product, and we think it’s going to continue to be promotional and at times, irrational going forward.”
Dick’s attributed the company’s disappointing second quarter to competitor markdowns and an ever-changing apparel climate. The company sells Under Armour merchandise as well as its own competing lines, and has seen how brands are vying for sales—and often cutting prices to keep up. Under Armour has been having a bit of a tough time, especially in an over-saturated sportswear market and when demand for athleisure is high. Dick’s started its own private label apparel line called Second Skin, which put some items in direct competition with Under Armour’s.
Dick’s saw shares drop 21 percent during midday trading Tuesday, which the company attributed, at least in part, to its unfavorable financials and rampant discounts cutting into revenue.
Under Armour has been feeling the heat of the price war, having recently announced plans to cut 280 jobs in a restructuring designed to help the company boost its competitiveness.
Under Armour’s shares were down just 0.11% to $18.02 as of publication time, while Dick’s Sporting Goods shares ticked up 3 percent to $27.69.