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On Thursday, Williams Trading adjusted its stance on Under Armor (NYSE:), Inc. (NYSE:UAA), downgrading the stock from buy to hold and lowering its price target from $11 to $8. The move follows the announcement of unexpected leadership changes at the sportswear company.
Under Armor announced that President and CEO Stephanie Linnertz will retire on April 1, 2024. Kevin Plank, the company's founder and former CEO, will return to his role as president and CEO on the same day.
The company's leadership changes include Dr. Mohamed A. El-Erian assuming the role of Non-Executive Chairman of the Board. As a result, Mr. Plank will step down as executive chairman, but will continue to serve as a director.
Mr. Linnertz, who was appointed president and CEO on February 27, 2023, will step down after serving for just over a year. The departure was not initiated by Plank, but was described as a mutual decision between her and the Under Armor board of directors.
Under Linnertz's leadership, the company embarked on a strategic repositioning of the Under Armor brand in the U.S. market with the aim of strengthening its growing international presence. It was expected that North American revenue could decline in fiscal 2025 as the brand's repositioning strategy, including new product offerings and improved allocation and segmentation, began to take effect.
Analysts have previously said the gradual approach would ultimately benefit Under Armour, allowing it to move forward steadily. The analyst expressed optimism that Planck's return could breathe new life into the brand, given his historical influence and energy.
However, further details regarding Plank's Under Armor strategy are expected to be revealed during the company's fourth quarter 2024 earnings call, scheduled for May 9, 2024. Until then, the market is expected to remain focused on the company's next steps.
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