Spread Too Thin: Under Armour's Marketing Dilemma

The problem of being too many things to too many people may be tripping up Under Armour. Though the sportswear brand reported a 9% increase in second-quarter revenue to $1.1 billion on Tuesday, it lost $12.3 million during the quarter, its second quarterly loss, and cut its forecast for the rest of the year. The company has opened 56 outlets and stores in the year ending June 30, but is also eliminating around 280 jobs as part of a restructuring. Chief Executive Kevin Plank, who founded Baltimore-based Under Armour 21 years ago, noted that the company is in the process of pivoting to become more nimble and also appeal to consumers on a wider variety of playing fields, including lifestyle. He noted focus areas including lifestyle, connected shoes and product customization. While Under Armour, the third-largest athletic brand after Nike and Adidas, has made gains in attracting new shoppers to the brand, it's now having trouble defining its brand identity, according to one analyst. "While the overall brand remains visible, there is evidence to suggest that it does not have the clarity or a sense of purpose in the way that Lululemon or even Nike does," wrote Anthony Riva, analyst at GlobalData Retail in a research note. "Our consumer data indicate that many people are increasingly uncertain of what Under Armour stands for, or which parts of the sports market it specializes in." He added that the issue partly stems from Under Armour's presence in several categories within sportswear, and could be particularly harmful at a time when consumers are pulling back from spending on apparel. Under Armour executives said to expect a more laser-like focus for the brand's marketing for the remainder of the year. "Within marketing, our focus and approach is sharper and our frequency is increasing," said David Bergman, chief financial officer, on a conference call, noting the brand will spend more and have more "consistent brand voice" in the second half of the year. Plank echoed such statements, adding that "great product must be backed by terrific storytelling," on the call. He said Under Armour will be investing in more social and digital marketing initiatives, some of which will promote moments in time such as a career Grand Slam from golfer Jordan Spieth. Last month, Under Armour worked with Droga5 to debut a new womenswear campaign, "Unlike Any," with athletes including Misty Copeland and Natasha Hastings. The effort produced more than 300 pieces of digital content, which will roll out through the remainder of the year. Plank said the campaign has already resulted in millions of online views and spikes in relevancy and engagement rates. ~ ~ ~CORRECTION: An earlier version of this article

Spread Too Thin: Under Armour's Marketing Dilemma

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