Under Armour on Hot Seat for Olympic Speed-Skating Suits
After blowing away earnings expectations and recording its best-ever one-day share gain two weeks ago, Under Armour (NYSE:UA) is now fending off accusations by the U.S. speed-skating team that its new high-tech suits are at fault for the skaters’ disappointing performance in Sochi.
Shares of the athletic apparel company fell 2.2% to $106 in recent trade.
The suits may have a design flaw that could be slowing down skaters, according to a report by The Wall Street Journal, citing three people familiar with the U.S. team.
The U.S. Speed Skating Federation said late Friday it would drop the controversial new suit and switch back to previous uniforms for the remainder of the Olympics, saying some athletes "lack confidence" in the uniforms. Both of the suits, new and old, are made by Under Armour.
The vents on the back of the suits, which are designed to allow heat to escape, are also allowing air to enter and creating drag, these people said. Some team members told the Journal they felt they had to fight their suit to maintain the low position needed to achieve maximum speed, though the team is reportedly 50-50 over whether the suits are the problem.
Under Armour didn’t offer a comment to FOX Business specially about the accusations in the report, though a spokesperson said the company, which has had a working relationship with the U.S. team since 2011, is trying to figure out how to produce better results for the team.
"We're working with our athletes, coaches, trainers and equipment partners to figure out what we can do to produce better results for Team USA through the completion of the Winter Olympic Games," she said.
As of Thursday night, no American had finished better than seventh place in any of the six long-track speed skating events held in Sochi despite at least two athletes being pegged as favorites. Six races remain.
In the 2010 Vancouver Games, the U.S. won four speed skating medals.
The Journal does note there could be other factors at fault, such as the fact that the team trained at higher altitudes and on an outdoor track in Italy where conditions were different than that in Sochi.
The drama comes about two weeks after Under Armour's shares raced to an all-time high – rising a record 22% in one day – after the Baltimore-based sports apparel company reported stronger-than-expected fourth-quarter earnings.
Revenue soared 35% to $682.8 million, while net income jumped 28%.
Despite the slide on Friday, the shares remain up close to 110% over the last 12 months.