Under Armour (NYSE:UAA) CEO and Chairman Kevin Plank, a former special teams captain when he played football at the University of Maryland, is trying to stop an onslaught of criticism directed at him and his company after he praised President Donald Trump’s “pro-business” policies aimed at spurring economic growth, boosting U.S. manufacturing and creating jobs.
Not only has Plank incurred negative reaction but so has the stock price of his company, which took a hit when three of its celebrity endorsers publicly second-guessed the CEO’s response to a question during a Feb. 7 CNBC interview in which he said having “such a pro-business president is something that is a real asset to this country.” With voters split almost evenly in the last election between the recently inaugurated president and Democratic nominee Hillary Clinton, a statement that may have seemed respectful for a corporate CEO to give in previous times sparked a backlash on the heels of a polarizing political campaign and subsequent public protests.
A review of the performance of U.S. stock exchanges since President Trump’s election on Nov. 8 shows investors are encouraged enough to lift U.S. equity indices to record highs.
Plank responded to the recent verbal shots against him by initiating damage control. The CEO spoke to National Basketball Association star Steph Curry, a two-time league most valuable player and an Under Armour endorser, who earlier responded to a media query by saying he would agree with Plank about the U.S. president if the letters “et” were removed from the word “asset.” Under Armour’s CEO also talked at length to another of the company’s key endorsers, ballerina Misty Copeland, who indicated she was assessing whether her values align with those of Under Armour sufficiently to maintain their business relationship.
The CEO further issued an open letter to the people of Baltimore, where he moved Under Armour in 1998 when it had just two employees before growing into a company with 14,000 workers worldwide. The company’s arrival and rapid rise came during an era when Baltimore was losing corporate headquarters as insurer USF&G and financial services companies Maryland National Bank, First Maryland Bancorp and Baltimore Bancorp were acquired by out-of-state buyers.
Plank is trying to guide his company through a challenging business climate in which Sports Authority, once the nation’s largest sporting goods chain, filed for bankruptcy during March 2016 and ultimately closed its 450 stores.
Under Armour’s competitors also have engaged in price cutting that has put downward pressure on the company’s sales and earnings growth. As a result, Under Armour reported lower-than-expected fourth-quarter 2016 results, as well as scaled-back guidance for 2017. The Jan. 31 announcement contributed to a 25% one-day drop in the company’s share price.