Under Armour Stock Got Pounded. The Comeback Will Be Slow.

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There were a lot of reasons to be optimistic about

Under Armour

in April. Then May happened.

The stock (ticker: UAA) has fallen 37% since we recommended its shares on April 24, though not all of it was Under Armour’s fault. Consumer-discretionary stocks have gotten crushed lately, following downbeat reports from a number of retailers that detailed shoppers’ shifting preferences and continued supply-side pressures.

Still, much of the decline is due to Under Armour’s own missteps. The company delivered a surprise loss at the start of the month, hurt by supply-chain woes and pandemic-related lockdowns in China. Then last week, it announced the departure of CEO Patrik Frisk, who had led the company’s turnaround efforts over the past two years.

Under Armour had made progress on that front under Frisk’s management, but given that recent results have thrown into question the company’s ongoing momentum, investors may be eager for fresh leadership. The search for a new CEO, however, will probably mean an ongoing delay for the company’s comeback.

That doesn’t mean that Under Armour’s transformation is out of the question. As we noted in our original take on the stock, the company has made great strides in repairing its balance sheet and significantly improved its product lineup. Asia remains a strong potential market for growth.

Yet it inevitably looks as if that will now take much longer to play out than we originally thought, at a time when the market has little in the way of patience for retailers that miss the mark.

Write to Teresa Rivas at [email protected]