Beaten-down American sportswear player Under Armour Inc. (UAA) has seen its shares catch a much-needed break after losing nearly 50% of their value between May 2016 and last month. A series of disappointing earnings results coincided with increase competitive pressure from revived German rival Adidas AG (ADDYY) and U.S. leader Nike Inc. (NKE) amid a challenging North American retail environment.

The recent spike in UAA’s share price can be attributed to the recent NBA playoffs, particularly Stephen Curry and his Golden State Warriors, as Under Armour prepares to debut its anticipated Curry 4 Shoe. (See also: Could Curry 4 Shoe Get Under Armour Back on the Court?)

Retailers Begin Planning Around UAA

While analysts, including a team at SunTrust Robinson Humphrey, issued bullish notes on Under Armour’s Curry-influence comeback, Susquehanna warns investors not to get too excited. Susquehanna’s Sam Poser suggests that while Curry 4 is a great shoe, the Baltimore-based apparel and footwear maker’s issues are too big to justify a buy rating.

“It's becoming clear incremental sales to Kohl's (KSS), DSW (DSW), & Famous Footwear will not offset lost sales from The Sports Authority, Sports Chalet, MC Sports, & Gander Mountain as Dick's Sporting Goods (DKS), Hibbett Sports (HIBB), & other large sports retailers are planning the UAA business down in response to poor product segmentation and the resulting promotional activity,” wrote Poser.

The analyst indicates that 34% of UAA’s apparel styles carried in the moderate distribution channel -- including Academy Sports and Modell's -- made up 84% of sales in mid-March through May. The resultant mix of sales in the channel has caused retailers to begin planning their UAA business down to avoid a “promotional free-for-all,” according to Poser, who sees the situation as very likely given retailers such as Kohl’s start discounting. The analyst adds that Kohl’s ran 25% off most Under Armour products just three weeks after receiving its initial shipments. (See also: The NBA Playoffs Were Very, Very Good to Under Armour.)

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