Under Armour CEO Patrik Frisk to step down in June

Yahoo Finance Live anchors discuss shares for Under Armour amid news that the company's CEO Patrik Frisk will be stepping down in June.

Video transcript

BRAD SMITH: Let's talk about Under Armour. I didn't really have a good pivot for that one. But anyway, let's talk about Under Armour because the shares are moving lower right now. Under Armour shares moving down by about 5 and 1/2%, 5.6%, after the company announced that president and CEO Patrik Frisk will be stepping down this June. He's going to remain with the brand as an advisor through the summer.

First joined the company, you'll remember, in 2017 and did not give an exact reason for his soon to be departure. The company did announce that their ongoing search involves both internal and external candidates. It seems like Frisk is going to stick around for that transition process as well.

And naturally, you wonder if they're going to do like Nike did when they were going through their own transition, and Mark Parker was on his way out, and they ultimately brought in John Donahoe. John was already on the board of directors. We'll see if Under Armour takes a similar route, picks somebody from the board of directors. I think more broadly, across the landscape right now, they could really use a revitalization in their strategy and their go to market demographics right now. Looking across all of the competition-- Adidas, Lululemon, Nike-- they're prioritizing the women's segment.

And for Under Armour, what they need to do as well, I think, in looking across and reading through the tea leaves here, is really understanding where some of those competitors are doing that successfully and ultimately engaging with the segment across both apparel and footwear here.

But Under Armour, I mean, it's been a terrible story year to date that we've been tracking. And we were talking about their earnings just last week, highly disappointing in terms of the movement forward from here. We'll see exactly who they select and what they decide to lean into, especially as DTC is a major player in any type of footwear and apparel brand right now.

BRIAN SOZZI: Well, here's why he's leaving-- probably now that the stock has been circling the toilet bowl. And with that happening, you have to remember, Kevin Plank, the founder of Under Armour, his wealth has been absolutely hammered.

Now I was talking to a couple of folks with knowledge of Under Armour's happenings, let's just say, and Plank is not happy with how the stock has performed, how the business is performing. It is no surprise. He had a huge presence on that press release last night. The sense is that Patrik Frisk has always been, quote, "a hard ass." That was what one insider told me as well. Didn't really fit in with the culture at Under Armour.

Now Plank, in effect, maybe pulling a minor Howard Schultz here at Starbucks, coming back to save his investment in the company. Unclear if he's going to take on the full-time job as CEO, but make no mistake, he is, in fact, running this company right now. I know they put an interim CEO in, but Kevin Plank, for all intents and purposes, is back atop Under Armour.

JULIE HYMAN: Here's a quick reminder for folks-- Kevin Plank wasn't doing so great when Patrick Frisk took over, folks. So it's not like he's going to come in and save this company. If you look at the full term chart of Under Armour and you see its peak market cap, which I think was about $22 billion, something like that, if you go all the way back-- I don't know if we have the chart going all the way back, folks. But you can see the peak. That's the max? That's-- or anyway, that's not-- is that the max?

BRAD SMITH: No.

JULIE HYMAN: No, that's not right. Anyway, the point is, is that the stock was going down quite a bit when Plank stepped back from the company, and Patrik first took over two years ago. So it's quite interesting to-- you know.

BRIAN SOZZI: You know who the next CEO, Julie? The Rock. The Rock is endorsed by Under Armour.

JULIE HYMAN: You think the Rock should run everything, dude.

BRIAN SOZZI: He should run everything, but his clothing line is really the only thing that's selling well with any consistency at the company. I want the Rock, CEO of Under Armour. It's his time.

BRAD SMITH: You don't like Steph Curry's-- his former dad shoes, as they were called? The basketball shoes that they were--

BRIAN SOZZI: Whatever the Rock is selling, I'm on board. I want the Rock new CEO of Under Armour. Kevin Plank, you need to get it done.

BRAD SMITH: But Sozz, here's the thing. It's not like the culture was great under Kevin Plank either. You had all the allegations of the toxic workplace environment. Why would they bring him back?

BRIAN SOZZI: Well, I think they could use a little bit of a-- just from talking to folks, Brad, I think they could use a little inspirational force. Now, he is coming back to a different company. If you want to give Frisk any credit, it is that, one, he got the operations right, the structure of the business right, cut a lot of expenses. And I think they do need just a shot in the arm of inspiration and creativity. And you do get that from Planck. For all his faults as a leader, you do get that from him.

JULIE HYMAN: Yeah, and I also, as I look at the Under Armour trajectory, I look at some of the other shoe startups, right, although Under Armour didn't come at it from shoes, right? They came at it from apparel to shoes. But nonetheless, I look at an On Running. I look at an Allbirds, for example, with some of the ups on the one hand. You've seen maybe a little bit of downs on the other. I don't know. I'm curious how all of this is going to play out for these various contenders.

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