since the early 2000s, elite athletes like Steph Curry, Tom Brady and

Lindsey Vonn have sported the same brand in preparation for game day:

Under Armour. The company says its state-of-the-art products have been

engineered to help athletes solve problems, and up their game.

If it's Under Armour, then what's to do?

So like that idea of innovation, everything we do, that's the DNA of the

brand. That's what the consumer knows when they buy Under Armour, that

it's something that's actually making them better.

So that is...that's what and who we are and that's what drives through.

With a roster of sports celebrities in less than two decades, Under Armour

grew to become one of the biggest sports apparel brands in the world,

alongside Nike and Adidas.

But the company that urged athletes to fight on together has fallen on

tough times. As of 2020, sales growth at under armor has slowed on its

home turf of North America, and its stock has fallen from its all-time

highs. The coronavirus pandemic has only added to the company's woes.

In October 2020, the company announced third quarter revenue was flat.

And overall 2020 revenue is expected to decline compared to 2019 results.

One bright spot—footwear revenue in the third quarter of 2020 increased 19

percent from the year prior.

But with COVUD-19 wary consumers spending more time at home, ditching work

clothes and suits for yoga pants and sweats, analysts say the latest

athleisure boom and a newfound interest in health and wellness could

propel Under Armour and its rivals for years to come.

What we're going to see in the post COVUD world is people wearing their

athleisure and their comfortable dress, whatever they deem that to be,

everywhere. The beauty of the space with athleisure is there's not a lot

of competitors. It's a growing category and it shows no signs of stopping.

So the question is, can Under Armour rebuild its momentum and catch the

athleisure wave before it's too late?

Or will rivals Lululemon, Nike and Adidas take over?

Under Armor got its start in Washington, D.C.

in 1996.

Former University of Maryland football player, Kevin Plank, wanted a

solution to the sweat that built up in his cotton T-shirts during

practice. In his grandmother's basement, using a stretchy synthetic

material, Plank's fledgling company engineered a shirt to wick away sweat

from the body, keeping athletes cool, dry and light.

I would say this: Under Armour was a very important brand

for paving the way for a huge change in how we dress, for playing sports

and for how we're working out.

If you go back before the IPO, and you go back to the 90s and the 80s,

effectively what people were doing to work out in, they were working out

in a cotton T-shirt which absorbs sweat.

And if it absorbs sweat, it becomes heavy.

And if it becomes heavy, it impacts negatively your performance, either in

the gym or especially on the field.

The company got its big break in 1999 when it was signed on to supply

athletic apparel in Oliver Stone's gridiron film, 'Any Given Sunday.' The

company only made about $40,000, but athletes everywhere took notice.

Within five years, Under Armour had revenue of $5 million.

Under Armour went public in 2005 at $13 a share.

And by September 2015, shares had risen to a peak closing price of $53.

And it was rolling out new products beyond T-shirts as well, including a

line of HeatGear apparel designed to be worn in hot temperatures and

ColdGear products engineered to maintain a body's core temperature.

I'd say in a year, about 2006 or so, Under Armour went public.

That gave, you know, renewed force to the athletic apparel craze, if you

will, followed thereafter by Lululemon.

And you know, ever since we've seen the demand for suits go down

and rise for casual wear go up.

In 2006, Under Armour went head-to-head with sneaker giant Nike, jumping in

to the footwear space.

But instead of moving directly into the competitive gym shoe market, the

company launched a line of football cleats, capturing 23 percent share of

the market in the first year and becoming the official footwear supplier

of the NFL. When they came out with cleats back in 2006, they came out

with that great ad with the 'Click Clack,' and if you were a football

player, you said, "Oh, that's, that's cool.

That's what it sounds like when I go on the field.

They really understand what it's like to play.

I'm going to go try their cleats."

In 2009, the brand launch a line of running shoes as well as soccer cleats.

By 2010, overall revenue soared to a billion dollars.

And in addition to selling products, the company also made a big push into

acquiring athletes training data.

In 2013, Under Armour acquired MapMyFitness for $150 million.

And two years later, purchased fitness tracking apps, MyFitnessPal and

Endomondo for a combined $560 million.

At the time, the company was signing contracts with some of the biggest

names in sports, including New England Patriots quarterback Tom Brady, and

Golden State Warriors Steph Curry.

In 2016, Under Armour and UCLA announced the biggest college sponsorship

deal ever: a fifteen-year, $280 million contract for footwear and apparel.

Though it's worth noting that amid falling sales, Under Armour announced

in the summer of 2020 that it wanted to end the deal just a few years into

the 15-year agreement.

By 2015, the company had a peak market cap of $22 billion.

But

even as its share price peaked, in the mid 2010s, the company was starting

to lose its luster and net profit was taking a hit.

Critics said the brand was losing its unique appeal. One of the big

problems with the Under Armour garments is that they're visually very

specific and you instantly associate them with exercise, and that doesn't

really engender itself to a versatility that American consumers want.

So that's probably...the design issue is the number one problem.

The downturn in retail also weighed on the brand.

In March 2016, big box retailer Sports Authority filed for Chapter 11

bankruptcy. Under Armour, reported net income in the second quarter of

2016 of $6.3 million, 57 percent lower than a year earlier.

According to a Q2 2016 earnings call, the decline was likely caused by

sports authorities bankruptcy filing.

And the company was struggling with sales more broadly on its home turf

too. North American revenue in 2019, was $3.6 billion dollars, down two

percent from 2018.

And keep in mind, sales in North America are a huge part of how Under

Armour makes money.

In 2019, 69 percent of the company's overall revenue came from North

America. On June 1st, 2020, Under Armour's Chief Operating Officer,

Patrick Frisk, replaced Kevin Plank as CEO.

Plank moved to the company's Eexecutive Chairman and Chief of Brand slot

and remain involved in the larger direction of the company.

But the coronavirus pandemic may have impacted the company even further.

In May 2020, Under Armour said it was delaying payments to some of its

athletes as a cost-cutting measure, after first quarter sales plummeted 23

percent due to the coronavirus pandemic.

And in September 2020, Under Armour announced it would lay off about 600

employees globally. And the following month, the company agreed to sell

MyFitnessPal to a private equity firm.

Athleisure, the fashion trend, known for sporty gym clothes worn around the

home office or at the grocery store, is a roughly $80 billion business in

the U.S.. You know, looking into the future, you're going to see a lot of

athletic wear, a lot of athleisure, a lot of synthetic fibers, sorry

cotton industry, but that's the truth.

And this is the future of American fashion.

And people need to get on board or remember the good times they had in the

early 2000s. The category is dominated by a few big players, including

Nike, Adidas, Lululemon and of course, Under Armour.

According to analysts, brands offering products with a healthy dose of

performance and fashion are well, well-positioned in the athleisure market

for future growth. I'd say two things, actually.

It's the words function and fashion, but brands start off doing very well

if they show that they have functional prowess or they're much better than

other items of that same category that we saw it with Nike in footwear.

We saw it with running footwear back in the day.

We saw it with Lululemon, with their yoga pants.

We saw with under armor, with their compression shirt.

So it's about function first.

That gets you started with a great brand.

However, fashion is also what matters.

And frankly, you know, that's something that under armor has had trouble

with in the past. Is that fashion quotient something that Nike, Lululemon

and Adidas have gotten right function plus fashion.

Lululemon, known for its trendy yoga pants and pricey leggings, said

despite store closures due to the coronavirus pandemic revenue in the

second quarter, fiscal year 2020 increased two percent from a year earlier

as consumers shifted from office wear to comfier clothes, the stock closed

at an all time high of $398 on September 2nd, 2020, more than double than

what it was a year earlier.

And to capitalize on the country's newfound home fitness craze, the

retailer announced in June 2020 plans to purchase at home workout company

Mirror for $500 million dollars.

Mirror sells a $1500 high-tech mirror that streams live workout classes.

And while legacy athletic apparel companies like Nike and Adidas have been

hit hard by COVID-19, these two brands have seen a big spike in the sale

of apparel in the years leading up to 2019.

And even with the pandemic as a backdrop, Nike's stock is still on a tear.

One of the strongest global brands in retail, the company saw its stock

close at an all time high of $130 in October 2020.

Sales of apparel for Nike brand clothing were $11 billion dollars for the

fiscal year ended May 31st, 2020, almost 27 percent more than in 2015.

Part of the reason? Teens love Nike clothes.

A 2019 study found Nike to be not only teens favorite athletic apparel

brand in the U.S., but also the group's favorite apparel brand in general,

ahead of both Adidas and Lululemon.

And the company sees a big opportunity in women's clothing as well.

As of 2019, Nike's women's line represented less than 25 percent of Nike's

total sales. But with women flocking to comfier clothes and accessories,

the company thinks it can grab a larger share of the market.

Well, as long as there's been athletic wear, there's been this weird, and

sort of hard to define line between what you're wearing on the court, and

what you're wearing to look like you're somebody who likes to go on to the

court. Nike was able to successfully do it because a lot of times they

involved and brought on board really creative people who understood the

market, who understood what it was that the next generation wanted.

It's a similar story for Adidas.

The German based company had apparel net sales of around $10.5 billion in

2019, 28 percent more than 2015.

Well, Adidas is a really interesting company because they have always been

very on the forefront of pushing design elements, right?

They are cool. They're a cool brand.

And, you know, that takes us back into the late 70s and 80s when you have,

you know, you have bands such as Run DMC adopting these, taking this

garment. And when you get somebody as powerful as Run DMC singing a song

about your clothes, like you're on the path.

But while Nike, Adidas and Lululemon are embracing the fashion leisure

trend, Under Armour said the company's focus would remain firmly on

athletic performance.

Listen. We've heard all the reads on athleisure, what that means, are you

in it or not? Let's be crystal clear.

We've identified our consumer, something we call the focus performer, and

that is a mindset that the consumer has.

And it means that when they're, when they're thinking about what they

wear, and what they do with Under Armour is that there's no, 'here's

performance and then here's athleisure.' It is all performance.

We say that with without beauty, there is no performance.

As of September 2020, Under Armour reported a net loss for nine out of the

last 15 quarters.

While Under Armour's hesitancy to fully embrace athleisure may have hurt

the brand's sales, recent controversies may have done even more to damage

the company's image long term.

In 2017, the company came under fire from sponsored stars after Plank

referred to President Donald Trump as a real asset for the country.

I think he's highly passionate.

He definitely it's you know, to have such a pro-business president is

something that's a real asset for this country.

I think people should really grab that opportunity.

He loves to build. I don't think there's any surprises here.

You know, when you look at the president, so he wants to build things.

We want to make bold decisions.

He wants to be decisive. And I'm a big fan of people that operate the