Under Armour gets top billing—as the brand teens say they’re not wearing anymore.
In Fall 2016, 7 percent of wealthy male teens—with household income topping $100,000—surveyed by Piper Jaffray in its Taking Stock With Teens research cited Under Armour (UA) as the brand they’re dropping from their wardrobes, a figure that swelled to 12 percent in the company’s latest Spring 2018 results. Just 2 percent of both this cohort and their average-income peers claim UA as a favorite apparel brand, far behind Nike (38 percent) and Adidas (9 percent). Among affluent male teens, just 4 percent said they’re starting to wear UA.
It’s certainly not good news for Under Armour, whose stratospheric year-over-year growth has come screeching to a halt, putting an end to a remarkable decade that saw annual sales explode from $87 million to more than $1.4 billion.
Even Steph Curry—among the biggest stars in global sports right now whose Nike-logoed jersey remains the NBA’s bestseller for a third straight year—can’t seem to right the ship for the Baltimore-based athletic wear company. However, initial sales of his Curry 5 “Pi Day” sneaker—which sold out after a limited March 14 release and were restocked a month later—have shown encouraging signs compared with the collaboration’s previous shoe drops.
Former footwear business head Peter Ruppe left Under Armour in November after three years with the company.
Though UA’s Q3 2017 sales contracted 4.5% and profits plummeted 68.8%, it rebounded over a strong holiday season during which quarterly revenue jumped 5 percent to $1.37 billion, ahead of analysts’ expectations. Sales in international markets—which account for 23 percent of total sales—were up 47 percent.
Which means that an Under Armour turnaround that saw 300 employees laid off in August might be gaining momentum overseas, but the brand has yet to gain traction with American teens whose spending power will only increase in the years ahead.
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When it comes to average-income male teens’ favorite footwear brand, Under Armour gets just 1 percent of the vote for eighth place in the Piper Jaffray survey—a number that has held steady since Fall 2016. The brand’s apparel also is falling out of favor with affluent male teens, 7 percent of whom cite it as a “preferred” brand down from 10 percent a year prior. Even among male teens with household incomes of $56,000, UA is seen as less aspirational and desirable; just 8 percent told Piper Jaffray it’s their favorite for clothing, down from 11 percent in Fall 2016.
Insights on social
Given that digitally native teens spend the majority of their time glued to their smartphones and social accounts, brands should be focusing their efforts on reaching teens where they live and breathe. But according to influencer marketing platform Traackr, just 21 out of 200 top sneaker influencers mentioned Under Armour in Q1 2018, while Nike and Adidas captured the attention of 134 and 135, respectively.
That breaks down to influencer-generated content’s potential reach of 52 million for Under Armour, compared to 7 billion and 3 billion for Nike and Adidas respectively in the first quarter.
“When you look at the top influencers, it’s painfully clear that Under Armour fails to command their attention,” Evy Wilkins, vice president of account based marketing at Traackr, told Sourcing Journal. “This lack of engagement is very acute when you look at sneakers, which are a core business for athletic brands.”
Piper Jaffray’s data seems to back up that “lack of engagement.” The 2 percent of affluent male teens who cite UA as their preferred footwear brand has remained consistent since Fall 2016. Over the same period, Adidas has held the No. 2 spot, rising from 8 percent to 17 percent and grabbing share from Nike, whose “preferred” status shrank from 80 percent to 70 percent.
Note that 55 percent of teens say ads on social media compelled them to purchase, and 57 percent bought something because a favorite influencer posted about it.
“What’s interesting is that Under Armour’s average engagement is relatively on par with Nike and Adidas, despite the low number of mentions,” Wilkins added. “The launch of Under Armour’s new HOVR ‘smart shoes’ represents an opportunity to better drive more mentions and engagement in the long-term.”