Under Armour stock fell by almost 11% on Thursday after the announcement that its ex-CEO and founder Kevin Plank is returning as the head of the American sportswear company. Its current CEO, Stephanie Linnartz, is stepping down after 13 months, and Plank will take charge effective April 1.
In a statement, Plank thanked Stephanie for her leadership and appreciated her hard work.
“During her tenure, she strengthened the leadership team with executive hires in critical areas, including product, design, supply chain, consumer connectivity, and regional management. Her prior experience leading major brands was instrumental in focusing our consumer strategy,” he said.
Under Armour stock is down almost 17% so far this year.
Another sporting goods company, Dick’s Sporting Goods, saw its stock hit a record high Thursday after layoffs led to big profits.
Struggles and scandals
Once hyped as the next Nike, Under Armour has struggled to maintain its position in a highly competitive market. As per its third quarter financial report released last month, its revenue decreased 6% year over year to $1.5 billion.
Plank’s first term as CEO was challenging and full of controversy. In 2021, the company paid $9 million to settle Securities and Exchange Commission (SEC) charges that it misled investors about its revenue growth. Moreover, his close relationship with television anchor Stephanie Ruhle raised questions in court.
Leadership shake-up
This will mark Under Armour’s third CEO transition since Plank first stepped down in 2019. Plank’s successor, Patrik Frisk, served for just over two years before being replaced by Linnartz, who lasted just over a year.
Linnartz will continue to serve as an advisor through the end of April. Mohamed El-Erian, the economist and former chief executive of the investment management giant Pimco, will now be the board chair.