Under Armour Inc (NYSE:UAA) Q1 2019 Earnings Conference Call Transcript

May 02, 2019 • 08:30 am ET

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Under Armour Inc (NYSE:UAA) Q1 2019 Earnings Conference Call Transcript

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Presentation
Executive
Kevin Plank

stories for the year, Rush, Recover and HOVR, are in the market delivering on our promise to make athletes better. Rush and Recover use mineral-infused fabrics to enhance performance by recycling the body's natural heat to promote blood flow, thereby, improving endurance, strength and repair.

Turning to UA HOVR. With more than 12 styles across run, sports style, basketball and golf now available, we're driving positive results and reception. In fact, the HOVR Infinite running shoe was featured as a top pick by both Outside and Women's Running magazines. And Runner's World featured this shoe on the cover of its spring 2019 shoe guide with a coveted recommended award.

We're also continuing to build momentum in our digital business, as we move to more aggressively integrate our Connected Fitness community at the intersection of train, compete and recover to connect even more deeply with our consumers.

From an operational perspective, in order to deliver on our brand promise in this highly competitive landscape and, most importantly, to be able to do it again and again, our investments must be optimized, targeted and return driven. With a clear focus on athletic performance supported by an improved go-to-market process and the alignment of our category and regional structure now firmly in place, the integration into our long-term strategic planning process is considerably strengthening our ability to be consistent. By operating more effectively across innovation, design, supply chain, marketing and sales, we're making the best decisions collectively for our brand. This cohesive effort further empowers our ability to reinvest back into our largest, long-term growth opportunities, including footwear, women's, direct-to-consumer and our international businesses.

Two highlights supporting the strategic objective in the quarter included opening our new EMEA headquarters in Amsterdam, which, during this period of transformation and stabilization in this region, meaningfully amplifies our culture and brand energy, giving us great confidence in this team's ability to tackle its next chapter of growth.

We also announced the opening of the first UA Brand House in India, where Michael Phelps joined Patrik and myself, along with others, to help celebrate our entrance into market that is immensely passionate for sport and represents a solid opportunity for Under Armour over the long term.

Next up is building stronger, brand-right relationships with key customers, relationships that protect our premium positioning and allow us to mutually manage the marketplace with sustainable, profitable growth. At the core of this effort has been a reset predicated on better segmented product, managed inventories and, ultimately, improved service levels, all of which we've made excellent progress with.

With respect to differentiation, throughout much of 2019, we're still in a bit of a hybrid period in between our previous go-to-market, the short-term things we were able to impact, like SKU rationalizations and channel optimization, and our new go-to-market, which commercializes more meaningfully toward the end of 2019 and in the spring/summer of 2020. Of course, this is difficult if there's too much inventory in the marketplace, and in this respect, our