With revenue down 10% in its recent earnings report, sportswear brand manufacturer Under Armour discusses fewer promotions, fewer SKUs, more loyalty and more influencers.
Every two in three emails Under Armour sent to consumers in 2023 included a discount or promotion. Likewise, 65% of Under Armour’s sales last year were on promotion and only 35% were full price.
This year, the apparel brand is flipping its promotional email ratio to only one in three emails in an effort to restore the brand to a full-price business.
“We’re a company that’s been left more to just selling on the logo and a price tag next to it versus articulating the actual depth of story that we have available about each incredible product that we build,” CEO Kevin Plank told investors on a recent earnings call according to a Seeking Alpha transcript.
Although only one quarter into its fiscal 2025, this tactic is showing positive results with higher average order values, Plank said.
“It’s encouraging to imagine how a year’s impact might improve our brand affinity,” he said.
But in the short term, fewer promotions means declining sales for the brand. Overall, for its fiscal Q1 2025 ended June 30 Under Armour reported:
- Revenue decreased 10% year over year to $1.18 billion
- Ecommerce revenue decreased 25% year over year
- Online sales drove 34% of total direct-to-consumer sales
- A net loss of $305.43 million
For the rest of its fiscal 2025, Under Armour expects revenue to decrease a low double-digit percent and to continue to operate at a loss.
Focusing its marketing message more on its products and brand instead of on discounts is one tactic Under Armour is using to elevate its brand, Plank said.
Under Armour also is going to lean on its loyalty program UA Rewards, which it launched in August 2023, for profitability and higher brand engagement. The program has 5 million members, who spend 50% more revenue compared with an average shopper and are three-times more likely to have a repeat purchase in 90 days compared with nonmembers, according to the brand.
The apparel brand also plans to double the number of its paid social media influencers over the next few years to help it create fresh content and increase its reach of customers.
Also within its quarter, Under Armour laid off an undisclosed portion of its employees and is working to reduce its SKU count by 25% over the next year and a half.
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