Jefferies investment bank analyst Randal Konik is predicting the newly released Steph Curry 4 “will become the #1 sneaker in basketball this year”, leading to a rebound of the Under Armour (UAA) brand (down 44% YTD). After years of rapid growth, the UAA reported its second straight losing quarter in August; pointing to a sluggish signature market and weak consumer reception to the Curry 3 as reasons for the decline. UAA is taking a different marketing approach with the Curry 4; releasing the shoe in phases, while limiting distribution and colorways to create consumer demand.
Howie Long-Short: Konik points to the Curry 4 “championship pack” selling for 80-100% above retail, as evidence of a pending turnaround. I’m not so sure. Just a handful of stores received them and those that did had just a couple hundred for sale. You can create buzz selling in limited quantities like that, but you won’t generate meaningful revenues that way (see: Adidas/Yeezy); and unlike ADDYY, UAA doesn’t have a Stan Smith, NMD or Superstar to drive their resurgence. Konik’s most valid argument for UAA upside? LULU having a higher market cap than UAA “makes no sense”.
Fan Marino: The “championship pack” included: 2 pairs of Curry shoes, 2 pairs of Stance socks, a golf divot tool and a signed letter from Curry. The pack retailed for $400. The Curry 4 is selling for $130. Steiner Sports sells Steph Curry autographed photos for $299. Fans lucky enough to land a pack would seem to have gotten their money’s worth.
For the balance of today’s free newsletter, sign-up here.