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Does Under Armour Have a Brand Problem?

According to Canaccord Genuity’s latest athletic apparel survey, Under Armour may have a bit of a brand problem on its hands.

Based on responses from 721 men and 695 women who made an athletic apparel purchase in the last 6 months, researchers at the firm determined that what were once Under Armour’s (UAA) strengths (full-price, innovative athleisure that appeals to young men) have turned to weaknesses in recent months.

This, naturally, led to questions about the future of the brand and its appeal.

“We believe UAA’s once premium, full price positioning is showing signs of waning, which in our view bodes poorly for the health of the brand,” analysts at Canaccord Genuity said. “Exacerbating these issues is a weak product assortment that is losing out to strong innovation by competitors. What once was a product issue appears to be turning into a brand issue.”

Throughout the survey, evidence of Under Armour’s weakness abounds. When it came to innovation, Under Armour lost ground to Nike and Adidas. Only 18 percent of survey respondents selected it as the most innovative apparel brand compared to 42 percent for Nike and 35 percent for Adidas.

Crucially, Nike is making inroads in its reputation for innovation among the mid-to-upper income male demographic (incomes between $60k and $150k), while Under Armour is simultaneously ceding its position, according to survey results. Nike led all brands in innovation among the demographic, increasing its share to 44 percent from 38 percent in December, while Under Armour fell to 12 percent from 17 percent.

“Conversely, UAA gained traction in the sub-$60k income range among men,” Canaccord Genuity noted. “We saw similar diverging trends
 by income for UAA on the question of most fashionable brand. By age, UAA gained the most ground among 50-64-year-old men as 23% view the brand as most fashionable vs. 16% in our last survey.”

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One of the few areas in which Under Armour increased its mindshare as “most innovative” was among men in the low-income range of $60k and under, rising to 28 percent from 25 percent previously. This indicates, according to Canaccord Genuity, that the brand had “faltered among high earners” and no longer offers a product range that appeals to men in that status, its long-time customer base.

“While Under Armour’s perception improved modestly among men, with 18% perceiving it as the most innovative vs. 16% in December, the difference is within the margin of error,” analysts said. “Importantly, UAA continues to lag meaningfully behind NKE and Adidas, which is concerning as men represent its key demographic and account for roughly ~75% of sales.”

When it came to other metrics, Under Armour didn’t fare much better. Among earners in the $60k to $75k range, the brand’s reputation as the most fashionable athletic brand fell 26 points, from 36 percent to 10 percent—the most dramatic change across the survey.

As a result, researchers believe Under Armour’s ability to connect with above-average consumers will become a major hurdle if it has any hope of maintaining its premium reputation.