Under Armour Kevin Plank returns as CEO in leadership shakeup

Summary

Under Armour's stock faces pressure after Kevin Plank, the company's founder, retakes the CEO role from Stephanie Linnartz, who held the position for just over a year. The leadership change has surprised analysts and insiders, as Linnartz was rebuilding the company’s culture and leadership team. Plank’s return, amid past controversies and underwhelming financial performance, raises questions about the future of Under Armour. Despite Plank’s past success, analysts remain cautious, noting that the company’s aggressive expansion and operational issues under his prior leadership could hinder a successful comeback.

Takeaways

• 😀 Kevin Plank has retaken the CEO role at Under Armour, replacing Stephanie Lenard, who had served for just over a year.
• 😀 The leadership change at Under Armour was a surprise to many analysts and Stephanie Lenard herself, indicating a lack of prior warning.
• 😀 Kevin Plank, who owns 65% voting control of Under Armour, is seen as trying to reclaim control of the company before a new headquarters opens.
• 😀 Stephanie Lenard focused on rebuilding Under Armour's culture, emphasizing servant leadership and fostering a culture of grit, determination, and belief.
• 😀 Despite efforts to reset the company’s culture, the leadership change signals a disruption in those initiatives, with analysts questioning whether the cultural reset will continue.
• 😀 Under Armour has struggled with cultural and operational issues under Plank’s previous tenure, including controversial decisions and slow business performance.
• 😀 Notable missteps during Plank’s leadership include the acquisition and sale of MyFitnessPal at a loss, as well as controversial political statements and inappropriate company expenses.
• 😀 Analysts and industry observers suggest that Under Armour has been losing market share to competitors like Nike and Lululemon over the past decade.
• 😀 While Plank's return is viewed as an attempt to regain control, many doubt whether he can lead Under Armour effectively given the company’s challenges and past mismanagement.
• 😀 Stock market reactions to the leadership change have been negative, with concerns over a lack of strategic clarity and a history of leadership mistakes.
• 😀 Despite Kevin Plank’s claim of being a 'changed' leader, investors remain wary, and the future of Under Armour depends on whether Plank can prove his effectiveness in the role.

Q & A

What prompted Kevin Plank to retake the CEO role at Under Armour?

Kevin Plank retook the CEO role from Stephanie Linnartz after a leadership shake-up at Under Armour. Plank, who owns 65% voting control of the company, wanted to reassert his leadership, especially ahead of the company’s new headquarters opening in about a year. His decision was unexpected by many, including Linnartz and analysts.

What was Stephanie Linnartz's leadership approach at Under Armour?

Stephanie Linnartz focused on rebuilding Under Armour's culture through servant leadership, emphasizing values like grit, determination, and belief. She aimed to reset the company's corporate culture and improve its operational efficiency, though her efforts were seen as needing more time to fully take effect.

How did Under Armour's stock react to the leadership change?

Under Armour's stock experienced pressure following the surprise leadership change. Analysts were skeptical of Plank’s ability to turn the company around, given past controversies and operational struggles. The market was concerned about the company's unclear strategic direction under Plank’s leadership.

What challenges did Under Armour face under Kevin Plank's prior tenure as CEO?

Under Kevin Plank’s previous leadership, Under Armour faced several challenges, including poor financial decisions like the acquisition and subsequent sale of MyFitnessPal at a loss. Plank also made controversial public comments that alienated key athletes like Steph Curry, as well as a series of cultural missteps, leading to diminished investor confidence and market share losses.

Why did analysts express skepticism about Kevin Plank’s return as CEO?

Analysts were skeptical because Plank’s prior leadership led to underperformance, with slowing sales, reduced margins, and loss of market share to competitors like Nike and Lululemon. Plank’s leadership style had also been controversial, and there was uncertainty about whether he could effectively steer Under Armour back on track.

What is the significance of Under Armour’s new headquarters for the company’s future?

Under Armour’s new headquarters, set to open in a year, is seen as a pivotal moment for the company’s future. The move symbolizes a fresh chapter, but the leadership change raises questions about whether Plank can lead the company successfully through this transition, especially after the strategic changes introduced by Linnartz.

How did the leadership shake-up impact the company’s cultural reset efforts?

The leadership shake-up interrupted the cultural reset that Stephanie Linnartz had initiated. Linnartz had focused on rebuilding the company's culture, and her new management team had started implementing changes. The abrupt departure left many questioning whether Plank would continue those efforts or return to his previous, more aggressive leadership style.

What role did Under Armour's founder, Kevin Plank, play in the company’s early success?

Kevin Plank is credited with founding Under Armour and growing it from a small business into a global brand. Starting by selling T-shirts out of his car in the late 1990s, Plank’s vision and entrepreneurial drive were instrumental in Under Armour’s early success as a leading sports apparel company.

What were some of the key controversies during Kevin Plank’s previous CEO tenure?

Key controversies during Kevin Plank’s previous tenure included a failed acquisition of MyFitnessPal, his public support for President Trump which alienated athletes like Steph Curry, and reports of inappropriate expense claims involving strip club visits. These issues contributed to a tarnished company image and reduced trust in his leadership.

How do analysts view the potential for Under Armour’s future success under Kevin Plank?

Analysts view Kevin Plank's potential to lead Under Armour back to success with caution. While they acknowledge his role in founding the company and his entrepreneurial success, they highlight the challenges of regaining investor confidence, addressing past mistakes, and navigating a highly competitive market against giants like Nike and Lululemon.