Saturday, February 4, 2023
HomeMarketUnder Armour Stock Slips After Naming New CEO. She Has a Tough...

Under Armour Stock Slips After Naming New CEO. She Has a Tough Job.

Under Armour named Stephanie Linnartz as its new chief executive from Feb.27.

- Advertisement -


Patrick T. Fallon/AFP via Getty Images

Under Armour
stock was falling early Thursday, after the athletic brand named a new CEO. She has her work cut out for her.

After the bell Wednesday,
Under Armour
(ticker: UAA) named Stephanie Linnartz as its new chief executive, effective February 27. Interim CEO Colin Browne, who has headed the company since the departure of Patrik Frisk in May, will once again become chief operating officer.

Under Armour
is down 2.5% to $9.65 in early trading following the news. While the anticipated announcement removes some uncertainty about the company’s strategic direction, the move likely reflects the challenges ahead.

Linnartz hasn’t been CEO of a public company before and doesn’t come from a retail background, most recently serving as president of
Marriott International
(MAR), as readers of Barron’s will remember from our past coverage. Still her track record isn’t lacking: She was integral in the digitization of Marriott’s diverse portfolio of brands and has worked in corporate roles from finance to sales and marketing. She also spearheaded Marriott partnerships with organizations like NFL, which could prove beneficial in her new role.

Moreover investors will likely welcome outside leadership, given the numerous problems that have plagued Under Armour in recent years.

Not surprisingly analysts are cautiously optimistic about the move. Telsey Advisory Group’s Cristina Fernández kept a Market Perform rating on the shares but raised her price target by $2 to $11, writing “a permanent CEO,  especially  one with the ability to manage brand experiences, should help regain investor confidence in the  strategy and business model.”

Likewise Baird’s Jonathan Komp bumped up his price target by $1 to $10 while keeping his Neutral rating. He praises Linnartz but thinks “Under Armour face questions about the reasons for hiring outside of the global footwear/apparel industry and the ongoing influence of Founder Kevin Plank (will remain in ‘partnership’).”

Ultimately the announcement removes one overhang for the stock, and could mark a long-awaited turning point for the company. Yet as we noted before, with the beaten down shares trading so cheaply, investors won’t pay much for the privilege of waiting on the sidelines a little longer for greater evidence that change is truly underway.

Write to Teresa Rivas at teresa.rivas@barrons.com

Credit: marketwatch.com

RELATED ARTICLES
- Advertisment -

Most Popular