Mar 14, 2024 - Business

Under Armour's shares tumble after founder Plank returns to the CEO role

Photo of returning Under Armour CEO Plank

Under Armour founder Kevin Plank in 2023. Photo: Don Emmert/AFP via Getty Images

Under Armour's shares plummeted over 10% Thursday morning, a day after the company said founder Kevin Plank was returning, and CEO Stephanie Linnartz was leaving, effective April 1.

Why it matters: The company has played a game of "musical chairs" with CEOs in the past few years.

Catch up quick: Linnartz held the role for just over a year and worked to push through a turnaround plan.

  • Under Linnartz, UA launched a rewards program and made some key hires across several divisions, including product and branding.

What they're saying: Wedbush analyst Tom Nikic believes Plank could bring consistency, which is much needed to steer the company forward.

  • "Mr. Plank is not "keeping the seat warm" until the right successor is found, he is coming back for the long haul," Nikic says in a note to investors, citing conversations he had with the company.
  • The change this time around is that lead director Mohamed El-Erian will become non-executive chairman, giving Plank "somebody to answer to," which was something he didn't have in his previous tenure, Nikic notes.

The other side: Oppenheimer analyst Brian Nagel says that Plank re-assuming the role could be a positive in the mid to long term for the company, but "we also tend to believe that the timing and abruptness of management transition at the company suggests ongoing, and likely intensifying nearer-term challenges for Under Armour."

  • "Product innovation and improved marketing have represented key weak spots in repositioning efforts at UAA over the past several years," he adds.
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