---
title: "Why Under Armour failed"
url: https://modern-mba.com/case/under-armour
sector: "Retail & brands"
sector_url: https://modern-mba.com/sector/retail-and-brands
aired: 2023-08-20
published: 2026-08-26
updated: 2026-08-28
reading_time_minutes: 14
charts: 17
video: https://www.youtube.com/watch?v=HeWdxezd_CU
author: "Yishan Lin"
author_url: https://www.linkedin.com/in/yishanlin/
publisher: Modern MBA
license: "© Modern MBA, all rights reserved. Quote and cite with credit and a link; republishing needs written permission."
---

# Why Under Armour failed

Under Armour's problem in 2015 was that its products were ugly. Fixing that would have meant hiring designers — boring, slow, and no fun to announce. So Kevin Plank spent $700 million on three money-losing fitness apps, called himself a tech company, and went looking for insights in user data instead. Six years later the apps had 220 million users and had taught the company nothing, the SEC had found half a billion dollars of revenue pulled forward to keep the growth streak alive, and the share price was back where it started.

## Key figures

- **$700M+** — Spent on apps that never cleared 3% of revenue
- **~$500M** — Revenue pulled forward in 2015–16, per the SEC
- **27% → 1%** — Average annual growth, then 2019

## The argument

By 2015 Under Armour had a single, unglamorous problem: nobody wanted to wear its clothes. Performance had become table stakes — Adidas shipped UltraBoost and Yeezy that year and proved the market now bought style. The fix was obvious and Kevin Plank refused it. Investing in design was, in his own framing, too boring, too straightforward, and too slow to be a growth story.

So he went to Silicon Valley for a better one. Plank spent over $700 million buying MapMyFitness, Endomondo, and MyFitnessPal — three bleeding apps with no business underneath them — declared Under Armour a tech company, redirected R&D toward $180 fitness trackers, and waited for the data to reveal something. It never did. There was nothing in a billion data points the company did not already know: the shoes were ugly.

While that played out, the numbers were being helped along. The SEC found that across 2015 and 2016 executives had sales and finance hunt for orders retailers had placed for future quarters and ship them early, discounting to persuade retailers to take spring product in winter. Roughly half a billion dollars was pulled forward and none of it disclosed. That is what turns 22% growth in 2016 into 3% in 2017. The thirteen-year streak was real for about eleven years; the last two were assembled.

## Charts

### The decade that was real

Under Armour revenue, in millions. A compression-shirt company teaching itself to be a sportswear company.

|  | US dollars |
| --- | --- |
| 2003 | $115M |
| 2004 | $205M |
| 2005 | $281M |
| 2006 | $431M |
| 2007 | $607M |
| 2008 | $725M |
| 2009 | $856M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-1 · Sources: https://modern-mba.com/case/under-armour#sources

### The last strategy it executed cleanly

Share of net revenue by channel. Building direct-to-consumer is what gave the brand control of its own pricing.

|  | Wholesale | Direct-to-consumer |
| --- | --- | --- |
| 2004 | 93% | 5% |
| 2005 | 91% | 6% |
| 2006 | 88% | 8% |
| 2007 | 84% | 11% |
| 2008 | 81% | 14% |
| 2009 | 78% | 18% |
| 2010 | 73% | 23% |
| 2011 | 70% | 27% |
| 2012 | 69% | 29% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-2 · Sources: https://modern-mba.com/case/under-armour#sources

### Moving into shoes, the slow way

Share of net revenue by product line. Deliberate, incremental, product-led — everything the next era was not.

|  | Apparel | Footwear |
| --- | --- | --- |
| 2006 | 87% | 6% |
| 2007 | 85% | 7% |
| 2008 | 80% | 12% |
| 2009 | 76% | 16% |
| 2010 | 80% | 12% |
| 2011 | 76% | 12% |
| 2012 | 75% | 13% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-3 · Sources: https://modern-mba.com/case/under-armour#sources

### The Nike-killer had 109 stores

Retail stores worldwide, 2009 and 2012. The rivalry was always about growth rate, never about scale.

|  | 2009 | 2012 |
| --- | --- | --- |
| Adidas | 2,200 | 2,446 |
| Nike | 674 | 826 |
| Under Armour | 39 | 109 |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-4 · Sources: https://modern-mba.com/case/under-armour#sources

### A one-country company

North America as a share of total revenue. Nobody treated this as a risk while the appetite held.

|  | 2009 | 2012 |
| --- | --- | --- |
| Under Armour | 94% | 94% |
| Nike | 41% | 42% |
| Adidas | 22% | 23% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-5 · Sources: https://modern-mba.com/case/under-armour#sources

### Ten straight years of double digits

Under Armour revenue, in millions. The run the company would spend the next decade trying to reproduce by any means available.

|  | US dollars |
| --- | --- |
| 2003 | $115M |
| 2004 | $205M |
| 2005 | $281M |
| 2006 | $431M |
| 2007 | $607M |
| 2008 | $725M |
| 2009 | $856M |
| 2010 | $1,063M |
| 2011 | $1,472M |
| 2012 | $1,834M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-6 · Sources: https://modern-mba.com/case/under-armour#sources

### The Nike-slayer era, two years of which were not real

Under Armour revenue, in millions. The SEC later found 2015 and 2016 were flattered by orders pulled in from future quarters.

|  | US dollars |
| --- | --- |
| 2012 | $1,834M |
| 2013 | $2,332M |
| 2014 | $3,084M |
| 2015 | $3,963M |
| 2016 | $4,825M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-7 · Sources: https://modern-mba.com/case/under-armour#sources

### A billion-dollar shoe business built on one athlete

Under Armour footwear revenue, in millions. Carried by Steph Curry at his peak. A signature athlete is not a design department.

|  | US dollars |
| --- | --- |
| 2012 | $239M |
| 2013 | $299M |
| 2014 | $431M |
| 2015 | $678M |
| 2016 | $1,010M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-8 · Sources: https://modern-mba.com/case/under-armour#sources

### Buying Nike-scale visibility on a fraction of Nike's revenue

Under Armour advertising and marketing expense, in millions. Quadrupled while revenue tripled.

|  | US dollars |
| --- | --- |
| 2009 | $109M |
| 2010 | $128M |
| 2011 | $168M |
| 2012 | $205M |
| 2013 | $246M |
| 2014 | $333M |
| 2015 | $417M |
| 2016 | $477M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-9 · Sources: https://modern-mba.com/case/under-armour#sources

### The year the story stopped being true

North American revenue growth. Five straight years of beating Nike at home, then 2016 — under 10% for the first time.

|  | Under Armour | Nike |
| --- | --- | --- |
| 2011 | 39% | 13% |
| 2012 | 25% | 17% |
| 2013 | 27% | 18% |
| 2014 | 27% | 10% |
| 2015 | 24% | 12% |
| 2016 | 16% | 7% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-10 · Sources: https://modern-mba.com/case/under-armour#sources

### What $475 million bought

MyFitnessPal's standalone financials in its last year before acquisition, in millions. Not a business — a user list.

|  | US dollars |
| --- | --- |
| Revenue | $14M |
| R&D | −$10M |
| G&A | −$5M |
| Net loss | −$7M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-11 · Sources: https://modern-mba.com/case/under-armour#sources

### The users arrived exactly as promised

Connected Fitness registered users across MapMyFitness, Endomondo, and MyFitnessPal, in millions. And produced nothing.

|  | Counts |
| --- | --- |
| 2015 | 140M |
| 2016 | 175M |
| 2017 | 200M |
| 2019 | 220M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-12 · Sources: https://modern-mba.com/case/under-armour#sources

### The company's stated principal strategy

Connected Fitness revenue and operating income, in millions. Under 3% of company revenue in every year it existed.

|  | Revenue | Operating income |
| --- | --- | --- |
| 2013 | $1M | −$1M |
| 2014 | $19M | −$21M |
| 2015 | $53M | −$61M |
| 2016 | $80M | −$36M |
| 2017 | $102M | −$7M |
| 2018 | $120M | $6M |
| 2019 | $136M | $17M |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-13 · Sources: https://modern-mba.com/case/under-armour#sources

### Thirteen years, then nothing

Under Armour annual revenue growth. The streak was the entire investment case, and two of its final years were assembled.

|  | Percentages |
| --- | --- |
| 2004 | 78% |
| 2005 | 37% |
| 2006 | 53% |
| 2007 | 41% |
| 2008 | 20% |
| 2009 | 18% |
| 2010 | 24% |
| 2011 | 38% |
| 2012 | 25% |
| 2013 | 27% |
| 2014 | 32% |
| 2015 | 28% |
| 2016 | 22% |
| 2017 | 3% |
| 2018 | 4% |
| 2019 | 1% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-14 · Sources: https://modern-mba.com/case/under-armour#sources

### The excuse that did not survive the comparison

North American revenue growth, 2016 to 2019. Payless and Sports Authority went bankrupt for everybody, not just Under Armour.

|  | Percentages |
| --- | --- |
| Adidas 2016 | 24% |
| Adidas 2017 | 25% |
| Adidas 2018 | 10% |
| Adidas 2019 | 8% |
| Nike 2016 | 7% |
| Nike 2017 | 3% |
| Nike 2018 | −2% |
| Nike 2019 | 7% |
| UA 2016 | 16% |
| UA 2017 | −5% |
| UA 2018 | −2% |
| UA 2019 | −2% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-15 · Sources: https://modern-mba.com/case/under-armour#sources

### The bill for Connected Fitness

Under Armour gross and operating margin. Gross margin held the whole time. The tech division came out of operating profit.

|  | Gross margin | Operating margin |
| --- | --- | --- |
| 2011 | 48% | 11% |
| 2012 | 48% | 11% |
| 2013 | 49% | 11% |
| 2014 | 49% | 11% |
| 2015 | 48% | 10% |
| 2016 | 46% | 9% |
| 2017 | 45% | 1% |
| 2018 | 45% | 0% |
| 2019 | 47% | 4% |
| 2020 | 48% | −14% |
| 2021 | 50% | 9% |
| 2022 | 45% | 5% |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-16 · Sources: https://modern-mba.com/case/under-armour#sources

### A round trip to the start

Under Armour share price at year-end. Thirteen years, one spectacular peak, and back where it began.

|  | US dollars |
| --- | --- |
| 2011 | $8.78 |
| 2012 | $12.39 |
| 2013 | $16.29 |
| 2014 | $29.92 |
| 2015 | $42.67 |
| 2016 | $38.15 |
| 2017 | $19.09 |
| 2018 | $19.21 |
| 2019 | $21.46 |
| 2020 | $12.83 |
| 2021 | $22.01 |
| 2022 | $11.86 |
| 2023 | $9.01 |

Source: Modern MBA, “Why Under Armour failed”, aired August 2023. Chart: https://modern-mba.com/case/under-armour#chart-17 · Sources: https://modern-mba.com/case/under-armour#sources


## Takeaways

1. The first decade was the real one. **Under Armour** went **$115M**, **$205M**, **$281M**, **$431M**, **$607M**, **$725M**, **$856M** from 2003 to 2009 — a compression-shirt company teaching itself to be a sportswear company, and doing it properly.
2. None of which made it a peer. **Under Armour** had **39** stores in 2009 against **674** for **Nike** and **2,200** for **Adidas**, and **109** against **826** and **2,446** by 2012. The Nike-killer narrative was always about growth rate, never about scale.
3. It was also a one-country company. North America was **94%** of Under Armour's revenue in both 2009 and 2012, against **41–42%** for **Nike** and **22–23%** for **Adidas**. Every quarter depended on one market's appetite, which nobody treated as a risk while the appetite held.
4. Then the era everyone remembers: **$1,834M**, **$2,332M**, **$3,084M**, **$3,963M**, **$4,825M**. Revenue nearly tripled in four years, Plank became a magazine cover, and Under Armour was briefly the most exciting brand in American sport. Two of those five years were later found to be flattered by orders that had not happened yet.
5. The growth was also purchased. Advertising went **$109M**, **$128M**, **$168M**, **$205M**, **$246M**, **$333M**, **$417M**, **$477M** from 2009 to 2016 — quadrupling while revenue tripled. Under Armour was buying Nike-scale visibility on a fraction of Nike's revenue.
6. In its home market it genuinely was beating Nike. North American growth ran **39%**, **25%**, **27%**, **27%**, **24%**, **16%** against **13%**, **17%**, **18%**, **10%**, **12%**, **7%** — five straight years of winning in Nike's backyard, and then 2016, when it dropped under **10%** for the first time and the story quietly stopped being true.
7. **Adidas** had already shown what the market actually wanted. **UltraBoost** and **Yeezy** landed in 2015 on style and comfort, not on performance claims. Performance was now assumed; aesthetics were the differentiator. Under Armour's **SpeedForm** was performance and comfort without style — which is to say, without the part that had started to matter.
8. **Kevin Plank's** answer was not designers. It was **$700 million** for **MapMyFitness**, **Endomondo**, and **MyFitnessPal**, and a public rebrand as a tech company — because tech is the one sector that reliably invents a new buzzword each year to bury last year's undelivered promises, and in 2015 the buzzwords were big data and IoT.
9. The apps were not businesses and were never bought as businesses. **MyFitnessPal** cost **$475M** while running roughly **$10M** of R&D and **$5M** of G&A against **$14M** of revenue, for a **$6.5M** operating loss. **Endomondo** cost **$85M** on **$2M** of revenue and a **$1M** loss. They were bought for users and talent.
10. It contributed nothing. Connected Fitness revenue ran **$1M** to **$136M** across 2013 to 2019 against operating losses of **−$1M**, **−$21M**, **−$61M**, **−$36M**, and **−$7M** — under **3%** of company revenue in every year it existed, carrying nearly **$600M** of goodwill for the privilege.
11. And the product problem sat there untouched. The **$120 Curry** signature sneakers were mocked before they went on sale; the company rushed out revised models with better materials, which only confirmed that it could not make an attractive shoe. No quantity of biometric data was ever going to surface that finding, because everyone already had it.
12. Then the streak ended in public. Growth ran **78%**, **37%**, **53%**, **41%**, **20%**, **18%**, **24%**, **38%**, **25%**, **27%**, **32%**, **28%**, **22%** — and then **3%**, **4%**, **1%**. Thirteen years of double digits and a three-year fall to nothing.
13. The company blamed retail, and the excuse did not survive contact with the comparison. **Payless** and **Sports Authority** did go bankrupt, but North American growth over 2016–2019 was **16%**, **−5%**, **−2%**, **−2%** at **Under Armour** against **7%**, **3%**, **−2%**, **7%** at **Nike** and **24%**, **25%**, **10%**, **8%** at **Adidas**. People were paying $300 for Yeezys the whole time. They were spending — just not here.
14. The **SEC** supplied the real explanation. In 2015 and 2016 executives asked finance and sales to find future-quarter orders and pull them into the current one, shipping spring product in winter and sweetening it with discounts so retailers would accept inventory they could not yet sell. Roughly **half a billion dollars** was moved forward.
15. Which shortens the whole legend. The Nike-slayer era was realistically about **two years** long, not five, and the erosion in apparel and footwear had been running well before the year the company chose to blame. The manipulation did not cause the collapse. It hid the beginning of it.
16. **Patrik Frisk**, the first outside CEO in company history, cleaned it out in under a year: ArmourBox canceled, **Endomondo** shut down, **MyFitnessPal** sold to private equity at a loss. He also inherited a culture where employees expensed strip clubs, executives had relationships with subordinates, and women were invited to company parties based on attractiveness. The HR policy banning adult entertainment on the company card was written in **2020**.

## Common questions

### Why did Under Armour fail?

Because it refused to fix the thing that was actually wrong. By 2015 performance had become table stakes across sportswear — Adidas proved it with UltraBoost and Yeezy — and Under Armour's products were functional and unattractive. Rather than invest in design, Kevin Plank spent over $700 million on three unprofitable fitness apps and rebranded the company as a tech business chasing big data. Six years of R&D attention went to $180 trackers and connected scales instead of shoes people wanted to wear. Meanwhile the SEC found that roughly $500 million of revenue had been pulled forward from future quarters in 2015 and 2016 to keep the growth streak intact, which means the decline started well before the 2017 collapse everyone points at.

### Did Under Armour commit fraud?

The SEC brought a settled action against Under Armour for failing to disclose that it was sustaining reported revenue growth by pulling orders forward from future quarters. Executives directed sales and finance to identify orders retailers had placed for later delivery and ship them early, offering discounts so retailers would accept inventory they could not yet sell. Roughly half a billion dollars was moved across 2015 and 2016. Pulling revenue forward is a permitted accounting practice; concealing that your growth depends on it is a disclosure violation. The company settled. The practical effect is that 2016's reported $4,825 million was flattered by roughly $400–500 million of demand borrowed from later periods.

### Why did Under Armour buy MyFitnessPal?

For the users, not the business. MyFitnessPal cost $475 million while posting a $6.5 million operating loss on $14 million of revenue; Endomondo cost $85 million on $2 million of revenue. Together with MapMyFitness they gave Under Armour the largest fitness user base in the world — 220 million by 2019 — on the theory that biometric and nutrition data would surface product insights Nike could not replicate. Nothing was ever surfaced. Under Armour built the ability to ingest the data and never built the ability to interpret it, and the answer it was looking for — that its products were unattractive — was already sitting in plain view. MyFitnessPal was sold to private equity at a loss in 2020.

### Was Under Armour ever really a threat to Nike?

On growth rate in one country, yes. Under Armour beat Nike on North American revenue growth for five consecutive years, which is what generated the Nike-slayer story. On every structural measure, no: it peaked at 109 stores against Nike's 826 and Adidas's 2,446, and drew 94% of revenue from North America against 41% for Nike. It never had the scale, the geographic base, or the design capability. And two of the five years that built the story were later found to contain pulled-forward revenue.

### What was Connected Fitness?

Under Armour's name for the fitness app and wearables division it assembled from MapMyFitness, Endomondo, and MyFitnessPal, plus in-house hardware — $150 connected running shoes, a $150 heart-rate strap, a $180 fitness tracker, and a $180 smart scale. From 2016 it was the company's stated principal strategy and public identity. It generated between $1 million and $136 million a year against losses for most of its life, never exceeded 3% of revenue, was made obsolete by the Apple Watch within two years, and was dismantled in 2020.

## Discussion

- Plank rejected investing in design as "too boring, too straightforward, and too slow to be a growth story." What does it say about who a public company is really built to satisfy when the correct fix is refused for being unexciting — and where do you see that same trade being made today?
- Under Armour paid over $700 million for three apps that never exceeded 3% of company revenue in any year they existed. What would you have had to believe about data in 2015 for that to be a defensible use of capital, and who inside the company was positioned to say it was not?
- You take over as CEO in early 2016, before the SEC findings surface. Performance is table stakes, the shoes are unattractive, and North American growth is about to fall below 10% for the first time. What do you do in your first year, and what do you stop doing to pay for it?
- The case argues the pulled-forward revenue "did not cause the collapse. It hid the beginning of it." Does concealment rather than causation make the manipulation more serious or less? What should the board have been able to see in 2016 without the SEC's help?
- Under Armour drew 94% of revenue from North America while Nike drew roughly 41%, and nobody treated the concentration as a risk while demand held. What dependency is an organization you know not counting right now, for the same reason?

## Sources

Revenue, segment and channel splits, gross and operating margins, advertising expense, Connected Fitness revenue and operating income, store counts, and regional mix from Under Armour, Nike, and Adidas annual reports and filings for the years shown; MyFitnessPal and Endomondo standalone financials and acquisition prices from Under Armour disclosures; pull-forward figures and dates from the SEC's 2021 settled order against Under Armour; share prices are calendar year-end closes

---

From [Modern MBA](https://modern-mba.com/). Read this case in full at [https://modern-mba.com/case/under-armour](https://modern-mba.com/case/under-armour), or watch the episode at https://www.youtube.com/watch?v=HeWdxezd_CU.