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UNDER ARMOUR BANKING ON CURRY 4 TO LEAD COMPANY REBOUND
Jefferies investment bank analyst Randal Konik is predicting the newly released Steph Curry 4 “will become the #1 sneaker in basketball this year”, leading to a rebound of the Under Armour (UAA) brand (down 44% YTD). After years of rapid growth, the UAA reported its second straight losing quarter in August; pointing to a sluggish signature market and weak consumer reception to the Curry 3 as reasons for the decline. UAA is taking a different marketing approach with the Curry 4; releasing the shoe in phases, while limiting distribution and colorways to create consumer demand.
Howie Long-Short: Konik points to the Curry 4 “championship pack” selling for 80-100% above retail, as evidence of a pending turnaround. I’m not so sure. Just a handful of stores received them and those that did had just a couple hundred for sale. You can create buzz selling in limited quantities like that, but you won’t generate meaningful revenues that way (see: Adidas/Yeezy); and unlike ADDYY, UAA doesn’t have a Stan Smith, NMD or Superstar to drive their resurgence. Konik’s most valid argument for UAA upside? LULU having a higher market cap than UAA “makes no sense”.
Fan Marino: The “championship pack” included: 2 pairs of Curry shoes, 2 pairs of Stance socks, a golf divot tool and a signed letter from Curry. The pack retailed for $400. The Curry 4 is selling for $130. Steiner Sports sells Steph Curry autographed photos for $299. Fans lucky enough to land a pack would seem to have gotten their money’s worth.
EUROSPORT TO LAUNCH SNAP CHANNEL FOR ’18 OLYMPIC GAMES
Eurosport, the Discovery Communications (DISCA) owned sports network, has signed a strategic advertising and content partnership with SNAP Inc. (SNAP) for the ’18 South Korean Winter Olympics. Announcement of the agreement marks the first-time SNAP has publicly committed to a European, multi-language Olympics deal; though the company is experienced putting out content for the Olympics, having partnered with NBC (in the U.S.) for the ’16 Games (will again in ’18). The partnership will bring Snapchat users across Europe professionally curated (i.e. Our Stories, Publisher Stories) mobile video content; including behind-the-scenes action from Olympic events and user-generated video from the athletes and influencers.
Howie Long-Short: DISCA paid $1.44 billion for European rights to the games, across all platforms, through ’24; just a fraction of the $7.65 billion NBC (CMCSA) is paying for television and online rights to the games through ’32. Partnering with SNAP gives DISCA an opportunity to sell potential advertisers on a different demographic; one that is younger and more digitally minded. It also brings the games to viewers who may not otherwise watch on linear television; with 25% of U.K. smartphone users now using Snapchat daily. Eurosport should turn a healthy profit on the ’18 Winter Games.
Fan Marino: Softball, karate, skateboarding, sport climbing and baseball are sports that will be debuting at/returning to the Olympics in 2020. While one can certainly debate the merits of sport climbing; it’s talk of poker, foosball and pole dancing coming to the Olympic games, that have me all worked up. Can we all agree that “sports” using a casino, bar or strip club as a primary venue, are not worthy of competing in the Olympic Games?
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ASICS TO REBRAND ITSELF AS A HEALTH AND WELLNESS COMPANY
Asics (OTC: ASCCF) is working to rebrand itself from a niche footwear manufacturer to a mainstream health and wellness company. DJ Steve Aoki is the lead spokesman for the new campaign, “I move me”, that uses music and the power of movement to promote a diverse range of activewear products; not necessarily designed for athletes. The campaign’s marketing strategy will be all digital as the brand looks to broaden its appeal with younger Americans.
Howie Long-Short: Running shoes sales are flat to slightly declining so the company needs to find other avenues for growth. An athleisure market with room to grow is a good place to start. The company also generates just 1/3 of their revenue from the U.S. If you’re going to build a brand targeting “fitness minded consumers”, it makes sense to design campaigns that appeal to consumers within the world’s largest sportswear market.
Fan Marino: Asics has their work cut out for them. They’re looking to play in a crowded space, that’s only getting more crowded with Amazon’s entry. They also haven’t connected with American millennials. Just 2% of upper income teens and just 1% of average-income teens listed the brand, as their favorite (Piper Jaffray’s Taking Stock of Teens survey). Fun Fact: DJ Steve Aoki is the son of Rocky Aoki, founder of the hibachi chain Benihana.
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JohnWallStreet is not a person or location, but a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related finance news, in easily digestible bites, with commentary from both the equities analyst and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums, television networks, apparel & footwear companies, equipment companies, ticketing companies, content and facilities providers. If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Security & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.
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