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I’ve had a list of “worst CEOs of all time” for a long time.
In fact, I keep it on a piece of paper in my kitchen drawer. I haven’t made any additions in a while, as there is a high bar to get on the list, and 99.99% of the time I’m a happy person – who wants to spend their time labeling people the worst?
There is no set formula for getting on my list. But if there is any bond that unites the 10 people who are in it, it is the consistent inconsistency in the delivery of financial numbers, the brutal underperformance in relation to competitors and just incompetence in the role.
Some don’t seem like nice people to me either. I like cool.
No. 1 on my list — it will never change as long as I’m on this planet — is former Sears CEO Eddie Lampert. A trip to the past for you. One of the worst jobs in history – brought down Sears in his luxurious mansion. Most investors didn’t even know what he looked like!
I won’t count the other nine names.
But I’ll go reluctantly add an 11th name to the list.
Under Armor (UAA) boomerang founder and CEO Kevin Plank.
I say reluctantly because I have a lot of respect for Plank as a founder. Going from selling t-shirts straight out of your trunk to building a global retail brand is commendable.
Hell, even though I interviewed President Joe Biden this week — which basically took me 21 years of work — I didn’t build a company from scratch.
But what’s happening at Under Armor is a total disaster, and Plank has to bear the brunt of it all.
Although he only recently returned as CEO – after firing his hand-picked successor a year after taking the role – he has been on the board since day one. He has been a constant presence at Under Armour, interjecting where he was not necessary. Putting the company in news cycles it shouldn’t be in.
In short, simply not being able to do it as a leader, from execution to innovation and company culture.
And this week it once again blew up in your face in the form of a shocking earnings and outlook release.
Fiscal fourth-quarter sales fell 5% from a year earlier. Sales in North America fell 10%. International sales fell 7%. Wholesale sales (also known as sales to department stores and other partners) fell 7%. E-commerce fell 8%. Apparel sales fell 1%. Footwear sales fell 11%. Accessory sales fell 7%.
A little perspective:
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Walmart (WMT) U.S. e-commerce sales increased 22% in the most recent quarter. Sure, Under Armor doesn’t sell ground beef and bicycles, but e-commerce continues to be an important growth driver for most retailers. As long as your name isn’t Under Armour.
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Lululemon’s (LULU) sales in the most recent quarter increased 16%. Sales in the Americas division increased 9%.
“With multiple CEOs and heads of product marketing in North America over the past half-decade, the continued turnover of critical leadership has been fundamental to our inability to remain nimble and decisive,” Plank told analysts on his first annual conference call. results since returning as CEO.
Reminder: The plank has been a constant for the past half decade during this internal turmoil. The responsibility has always stopped with him, as he is still the controlling shareholder.
The company guided for a double-digit percentage sales decline in its new fiscal year, including a surprising 15% to 17% decline in North America.
Plank says he is restarting the business.
This includes cutting 25% of the company’s stock-keeping units (SKU), cutting more costs (the other constant of recent years), and rededicating itself to innovation. Under Armor promises better days in 18 months.
But Wall Street is rightly skeptical.
“Several of the initial contributions to the turnaround strategy add some comfort (new $500 million buyback, 25% SKU reduction, new cost-cutting initiatives). However, many elements of the plan appear to depend on the UAA achieve a degree of success in product innovation that we haven’t seen in years,” Evercore ISI analyst Michael Binetti wrote in a client note.
And that brings me back to Plank.
Under Armor’s stock price has plummeted 87% since its 2015 high. This is a $6.71 stock right now! The company’s market value is a paltry $2.90 billion, compared to $42.3 billion for Lululemon and $138 billion for Nike (NKE).
Deckers Outdoor (DECK) – once known only for its Uggs boots – has seen its market value rise to $22.7 billion due to feverish demand for Hoka running shoes.
Once consistently growing 20% plus annual revenue, Under Armor’s sales are in complete decline – with the decline poised to accelerate over the next 12 months.
Some odds and ends for this analysis:
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The company is in such a sorry state that you have to wonder how long the brand’s major endorsers like Steph 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 manage a sneaker business that never really gained traction – due to a lack of design and technical factors.
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Adidas is becoming popular again and could have a big fall while Under Armor declines.
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The quality has dropped a lot. Go touch a pair of Lululemon leggings and then a pair of Under Armor leggings.
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The company isn’t even in the conversation in terms of offerings for the upcoming Summer Olympics.
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Malls are filling up with new Under Armor competitors like TYR.
I want to remove Plank from my list. He earned his place, however.
The next 18 months will likely be the most difficult of your career. At some point, you will have to consider your legacy, which could mean stabilizing the business by the end of the year and selling it to private equity.
Looking for an example of a good CEO? Check out the latest Opening bid podcast with former Cisco (CSCO) CEO John Chambers, below.
Brian Sozzi is the executive editor of Yahoo Finance. He is also the host of “Opening bid“podcast. Follow Sozzi on Twitter/X @BrianSozzi and so on LinkedIn. Tips on business, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com. Are you a CEO and want to participate in Yahoo Finance Live? Email Brian Sozzi.
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