After surveying more than 550 young male shoppers, Wells Fargo lowered Under Armour’s price target to $13 from $17 amid expectations for the brand to “underperform” in sales in the coming year. A shareholders note revealed that only 27 percent of the surveyed male shoppers had a positive opinion of the athletic footwear brand — compared with 70 percent for Adidas and 81 percent for Nike.
Further, only 17 percent of the survey respondents said that they were likely to buy Under Armour sneakers this year. On the heels of the report, Under Armour shares sank about 1.5 percent.
That said, the sales picture is getting increasingly grim for athletic clothing and footwear overall. Along with Under Armour, Wells Fargo said that it expects Nike, Lululemon and Finish Line to also underperform in sales this year due to declining interest in sporty clothes.
Even though athleticwear still grew and accounted for 30 percent of all footwear sales in 2016, the last year was still the slowest for the market since 2010.
“Big-picture, the industry has had a remarkable track record of success over the long term, but with consumers having filled their closets with athleticwear over the past six to seven years, meaningful distribution issues (bankruptcies, store closures, etc.) and a current ‘lull’ in product innovation, the category appears poised to take a breather for now,” Wells Fargo analyst Tom Nikic said in the shareholder note.