On Thursday, Williams Trading adjusted its stance on Under Armour (NYSE:UA), Inc. (NYSE:UAA), downgrading the stock from Buy to Hold and reducing the price target to $8 from the previous $11. This move follows the unexpected announcement of a leadership change at the sportswear company.
Under Armour revealed that President & CEO Stephanie Linnartz would step down on April 1, 2024. Kevin Plank, the company's founder and former CEO, is set to resume the role of President & CEO on the same date.
The company's leadership transition includes Dr. Mohamed A. El-Erian taking on the role of non-Executive Chairman of the Board. Consequently, Plank will relinquish his position as Executive Chairman but will continue to serve as a director.
Linnartz, who took the helm as President & CEO on February 27, 2023, is leaving after a little over a year in the role. The departure was described as a mutual decision between her and the Under Armour board, not initiated by Plank.
Under Linnartz's leadership, the firm was undertaking a strategic repositioning of the Under Armour brand in the U.S. market and aiming to strengthen its growing international presence. The expectation was that the fiscal year 2025 North American revenue might decline as the brand's repositioning strategies, including new product offerings and improved allocation and segmentation, began to take effect.
Analysts had previously held a view that a gradual approach would ultimately benefit Under Armour, allowing the company the latitude to progress steadily. The analyst expressed optimism that Plank's return could inject renewed vigor into the brand, given his historical influence and energy.
However, further details on Plank's strategies for Under Armour are anticipated to be disclosed during the company's fourth-quarter 2024 earnings call, scheduled for May 9, 2024. Until then, the market is expected to remain watchful of the company's next steps.
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