Under Armour deeply discounting products as outlook appears murky

2 months ago by Andrew Thompson in Facts, Trends

In September, Under Armour ($NYSE:UA) announced it would lay off 400 employees as part of a long-term restructuring forced upon it after a long bout of misfortune.

Its competitor, Adidas ($XETRA:ADS), is “resurgent” as Bloomberg put it; products languish in inventory; and all its lavish endorsement deals haven’t much helped matters. In response, the company has been trying to offload goods; according to underarmour.com store discount data, the average discount marked on its products for the past year has been a rather high 30%.

As Of Date

Percent Discount

2017-11

31.08%

2017-12

30.77%

2018-01

30.13%

2018-02

28.46%

2018-03

31.05%

2018-04

28.47%

2018-05

30.22%

2018-06

30.04%

2018-07

28.40%

2018-08

31.61%

2018-09

32.77%

2018-10

28.51%

Recently, its average discount on marked down items has spiked as much as 35.44% when looking at day-by-day average discount rates, albeit the rate has dropped significantly in early October.

Plenty of Under Armour items are getting discounted, too. Over the past month, an average of over 2,000 individual products were discounted online as it cuts down on inventory.

Under Armour employee sentiment also experiencing lows

Although early October data shows a small change towards the better, things have been a bit dismal for the company’s workers. The six-month outlook employees have given the company has slumped on Glassdoor...

...and fewer have recommended it to prospective job-seekers.

At the same time, Adidas’s prognosis by its employers has remained mostly steady; its workforce not wincing as much from negative press coverage.

Essentially, Under Armour's restructuring will have to turn around this growing worried attitude and discounted inventory concerns, or it may have some trouble protecting its house.

Andrew Thompson

Andrew Thompson is a freelance journalist. You can find him on Twitter at @asthompson.

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