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I've been making a list of “worst CEOs of all time” for a long time.
I actually write it down on paper and keep it in my kitchen drawer. It's a high bar to get on the list and I'm a happy person 99.99% of the time, so I haven't added anything in a while. Who wants to spend their time labeling people the worst?
There is no set formula for what goes into my list. But if there are any ties that bind his 10 participants, it's that they're inconsistently achieving financial numbers, significantly underperforming compared to their competitors, and simply Just being incompetent in the role.
Some people don't seem like good people. I like nice things.
Number one on my list, and it will never change as long as I'm on this earth, is former Sears CEO Eddie Lampert. A trip down memory lane for you. Pushed one of the worst jobs ever, Sears, out of his luxurious mansion and into the ground. Most investors didn't even know what he looked like.
I won't say the names of the remaining nine.
But I'm going to unwillingly Add the 11th name to the list.
Kevin Plank, founder of Under Armor (UAA) and CEO of Boomerang.
I say unwillingly Because I have a lot of respect for Plank as a founder. It's admirable that he went from selling T-shirts out of his trunk to building a global retail brand.
Heck, I got to interview President Joe Biden this week, which basically took 21 years of work, but I didn't start a company from scratch.
But what's happening at Under Armor is a complete disaster, and Plank has to bear the brunt of it.
Although he only recently returned as CEO after a year with the company and appointed a hand-picked successor, he has been on the board since day one. He's always been a presence at Under Armor, interfering where he didn't need to interfere. He gets his company into a news cycle that it shouldn't be in.
Collectively, they just don't deliver as leaders, from execution to innovation to culture.
And this week, shock hit his face again in the form of shocking financial results and forecasts.
Sales in the fourth fiscal quarter were down 5% year over year. Sales in North America decreased 10%. International sales decreased by 7%. Wholesale sales (also known as sales to department stores and other partners) fell 7%. E-commerce decreased by 8%. Apparel sales decreased 1%. Shoe sales fell 11%. Accessories sales decreased by 7%.
A little perspective:
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Walmart's (WMT) U.S. e-commerce sales increased 22% in the most recent quarter. Sure, Under Armor doesn't sell ground beef or bicycles, but e-commerce continues to be a major growth driver for most retailers. Unless your name is Under Armor.
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Lululemon (LULU)'s sales rose 16% in its most recent quarter. Sales in the Americas increased by 9%.
“Over the past five years, North America has seen multiple CEO and product marketing leadership changes, and continued changes in key leadership have prevented us from remaining agile and decisive,” Plank said. '' he told analysts at his first financial results conference since returning as CEO.
Reminder: Planks have been in constant use for the past five years during this internal turmoil. The losses always stay with him and he remains the controlling shareholder.
The company led sales declines in the low double digits in the new fiscal year, including an astonishing 15-17% decline in North America.
Plank says he's resetting his business.
This includes cutting the company's stock-keeping units (SKUs) by 25%, further cutting costs (another that has remained constant in recent years), and refocusing on innovation. Under Armor promises brighter days in 18 months.
But Wall Street is understandably skeptical.
“Some of the early inputs into the turnaround strategy provide some reassurance (a new $500 million share buyback, 25% SKU reductions, new cost-cutting initiatives). “Many factors appear to depend on UAA achieving some level of success with product innovation not seen in years,” Evercore ISI analyst Michael Binetti wrote in a client note. ing.
Now let's get back to Planck.
Under Armor stock is down 87% from its 2015 record. The current stock price is $6.71. The company's market capitalization is a meager $2.9 billion, compared to Lululemon's $42.3 billion and Nike (NKE)'s $138 billion.
Deckers Outdoor (DECK), once known only for its Uggs boots, has ballooned to a $22.7 billion market cap on the back of hot demand for its Hoka running shoes.
Once consistently growing revenue at more than 20% annually, Under Armor's sales are in complete decline, and that decline is expected to accelerate over the next 12 months.
This analysis has several possibilities:
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The company is in such dire straits that one wonders how long major brand sponsors like Stephen Curry, The Rock and Jordan Spieth will stick around.
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The company completely missed the supershoe movement.
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The company let Hoka and On fully run the sneaker business, which never really gained traction due to a lack of design and technical elements.
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Adidas is gaining popularity again and could have a big fall even as Under Armor slumps.
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The quality has dropped significantly. Try wearing Lululemon leggings, then Under Armor leggings.
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The company hasn't even talked about its products for the upcoming Summer Olympics.
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Malls are filled with new Under Armor competitors like TYR.
I would like to remove Plank from the list. But he earned his spot.
The next 18 months will be the most testing period of his career. At some point, he will need to consider his legacy, which could mean stabilizing his business and selling it to private equity by the end of the year.
Looking for an example of a great CEO? Check out the latest Opening Bid Podcast with former Cisco (CSCO) CEO John Chambers below.
Brian Sozzi I'm the executive editor of Yahoo Finance. He is also the host of “.starting bid” Podcast. Follow Sozzi on Twitter/X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com. Are you a CEO and would you like to appear on Yahoo Finance Live? Email Brian Sozzi.
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