Under Armour CEO Kevin Plank told shareholders Tuesday morning that he wasn't going to give them a lecture about how bad the economy is for business.
Instead, he chose to focus on the future of the company and how it could succeed despite the financial situation. He said the 13-year-old company will focus on launching new products, such as a bodysuit that helps athletes recover from injuries quicker, and controlling costs with measures such as slowing down its international expansion and implementing a global tax restructure.
"Everybody is pontificating on the economy," he said at the company's annual meeting attended by about 70 shareholders at ESPN Zone in downtown Baltimore. "That is not going to do us any good. We will control what we can control and that's the way we will grow. We're looking at how we're going to improve and move forward."
Like most businesses, Under Armour is feeling the pressure from slowed consumer spending. While first-quarter earnings beat analyst expectations thanks to sales of a new running shoe, the company is approaching the rest of the year with caution.
The company will continue developing new products as it sets itself up for a future where it is known for more than compression wear.
"This brand has not yet built its defining product," Plank said.
Under Armour has developed a shirt that works in both cold and hot weather. Before, customers had to buy separate shirts for each season. It is also introducing a product called "recharge," a skintight suit that it says helps athletes recover from muscle strains, injuries and other workout ailments more quickly.
During the meeting, shareholders peppered executives with questions about the company, including whether it would start a swimwear line, pay shareholders a dividend and if Nike has tried to buy the company.
The company doesn't plan on a dividend any time soon because it wants to preserve cash, Chief Financial Officer Brad Dickerson said. Plank didn't rule out a swim line but said the company enters new categories slowly.
Plank never really said if Nike has offered to buy them. He said the company would do what is best for the shareholders and that he sees a strong future for the company.
"We have a strong belief in the upside of this company and where we can take this company in the future," he said.
Shareholders said after the meeting that they also believe in the long-term prospects of the company, despite the economy.
Joseph W. Garner, who works for Emerald Advisers Inc., said his company bought shares in Under Armour because they think the company has long-term growth potential. Garner, 40, pointed to his son, Peter 11, and said that is the generation that is Under Armour's biggest fan.
"When kids like him reach their peak spending potential, that is when this company will really reach its potential," he said.
Blake Shinn, a 26-year-old account manager for Aerotek, said he believes Under Armour is doing the right things to weather the economy. "This company is going to be around for awhile," he said. "They just started. They're just scratching the surface."
