Under Armour stock tanked on Friday over concerns that their newest Steph Curry basketball shoes may not be doing so well.
Under Armour shares fell over 5%, one of Friday’s worst stock declines on the S&P 500 index, after Foot Locker announced that the debut of the latest Steph Curry shoe wasn’t as hot as previous Curry signature shoes. Under Armour has invested heavily to build the Curry brand and previous shoes and apparel around his name have done well.
“I think Under Armour is doing a great job investing in their footwear business,” Foot Locker Chairman and CEO Dick Johnson said on Friday in a presentation with analysts. “The 2.0 and 2.5 Curry shoes in the third quarter performed well. The 3.0 is fairly new into the business. It started off a bit slower than the two previous models.”
Wall Street investors took the news to heart, apparently concerned that the lackluster launch could spell trouble for Under Armour plans to be more competitive in the basketball footwear game.
The signing of unashamed Christian Curry to a shoe deal was seen as a major marketing coup for Under Armour. Footwear has been increasingly lucrative business for the company generating $786 million in revenue for the first nine months of 2016 with sales increases for footwear up 54% compared to just 19% for it’s apparel business.
The lukewarm Curry shoe sales news, coming from a key retail partner such as Foot Locker, has definitely given investors the jitters. It is still relatively early in the launch of the Curry 3.0 to predict the final sales outcome, but it’s always possibly that the shoe, like its namesake, will pull out the win in the end. Time will tell.