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UA Earnings Suck: Blame Marketing
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 Under Armour announced their earnings last night and they were not to impressive. Plus they lowered guidance for the rest of the year. For this quarter, they beat on revenues but were down on net income "due to increased marketing expenses". I think it is so funny that they blame their earnings miss on marketing, one of the few aspects of business that the company has complete and absolute control over. This made me chuckle so I mentioned it to Seth, and he got a kick out of it too. Here are a couple things I have noticed as to why they are spending too much on marketing.
1)They are signing a ton of teams and associations and supplying them with gear. They dont seem like the most lucrative deals either. This one is a great example:
Under Armour Partners with Intercollegiate Women's Lacrosse Coaches Association, Inc.
Who sends out a press release for that!? Do you think investors care? I wonder if the teams pay anything for all the gear they get??
2)They sponsored the hell out of MTV's Real World Road World Challenge: Gauntlet III. Every reality tv loser on that show was rockn' Under Armour. Then every commercial break there was some badass Under Armour commercials. I'm sorry, but couch potatoes who have nothing better to do than watch Real World Road Rules Challenge (ya thats me) don't seem like the best target demographic for Under Armour's gear.
Keep up the good work marketing department. The more you spend, the less UA investors make and the better my short position gets. UA finished the day at $34.62 down 10.26% for the day.
Related Post:
UA Meets My Profile: Short Time
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